EthereumPoW

What is EthereumPoW (ETHW)?

EthereumPoW was the blockchain network called Ethereum until the middle of September 2022.

That’s when it completed its long-awaited merge to a proof-of-stake consensus system, departing from its proof-of-work roots. This sort of major protocol-level upgrade is usually completed with an operation called a hard fork.

Hard forks are nothing new to the blockchain industry. As it happens, Ethereum underwent a hard fork to roll back the effects of "The DAO" hack back in 2016. The result of that hard fork was a divergence between Ethereum and what is now called Ethereum Classic.

Given the existence of Ethereum Classic, which is Ethereum in its original form, EthereumPoW’s claim of being “the original Proof of Work Ethereum” is contentious.

When Was EthereumPoW Launched?

EthereumPoW technically came into being when Ethereum forked in 2016 following the DAO hack. However, the chain was named EthereumPoW in 2022 since the majority of the Ethereum network and ecosystem migrated to the PoS chain, which remains the “official” Ethereum.

The founding of Ethereum was a groundbreaking development and spurred a flurry of innovation. One of those innovations was The DAO—the first-ever decentralized autonomous organization deployed on the blockchain using a set of smart contracts.

The DAO was exploited in June 2016, with a hacker taking advantage of a flaw in The DAO’s code. This allowed the entity behind the attack to drain 11.5 million ETH from The DAO.

Smart contract vulnerabilities are part of the risks when deploying code, decentralized applications, or DAOs on the blockchain. However, the severity of the attack saw Ethereum’s own reputation damaged.

The Ethereum community voted to implement a hard fork on the blockchain, essentially rolling the chain back to refund affected token holders. Based on the principle “Code is Law,” Ethereum Classic became the fork of choice for the segment of the community that did not agree with the rollback.

In a similar vein, EthereumPoW represents the part of the community that does not support the shift to proof-of-stake.

Who are the Founders of EthereumPoW?

Ethereum itself was conceived in 2013 by Vitalik Buterin. As one of the most prominent and respected personalities in the industry, Buterin crowdfunded the project and was able to bring it to fruition in July 2015.

Other members of the core team during Ethereum’s development were Dr. Gavin Wood and Charles Hoskinson. Wood also founded the Polkadot network and coined the term Web3, while Hoskinson masterminded the Cardano network.

Among these was The DAO, the hack that caused Ethereum to fork away from Ethereum Classic. It could be suggested that this hard fork came as a result of a philosophical divide.

EthereumPoW’s support from a certain part of the community may also be largely philosophical. However, moving from proof-of-work consensus to proof-of-stake consensus does disenfranchise one notable group of blockchain stakeholders—the miners.

Miners tend to have power over PoW since they’re in charge of transaction consensus and confirmation. PoS, however, takes much of that power and puts it in the hands of token holders.

Ethereum mining was also a very lucrative industry, sized by various publications to be in the region of $18-19 million. Not only did the shift from PoW to PoS devastate these earnings overnight, but it also left miners with mountains of GPUs that they could only use to mine other ASIC-resistant cryptocurrencies.

EthereumPoW is backed by an unknown group of miners who remain committed to the chain rather than exploring alternatives. One of the known miners is Chandler Guo, who tweeted about ETHW in late July 2022.

EthereumPoW already has some notable public backers. Justin Sun is perhaps foremost among these, as he is the founder of TRON and a major backer of the Poloniex cryptocurrency exchange.

What is a Hard Fork?

A hard fork happens when a blockchain diverges into two separate chains. This is usually done in order to upgrade the network, and the non-upgraded chain tends to fall away since it doesn’t see usage or support from network participants.

However, many blockchains—including Bitcoin and Ethereum—are such that the community may divide when it comes to their views about certain hard forks. These “camps” can emerge over various means of upgrading the network, as has happened with Bitcoin many times, or the resolution of a problem such as The DAO hack.

These hard forks that split the community can create sizeable networks. Bitcoin Cash, Bitcoin SV, Ethereum Classic, and others are major networks in their own right.

However, this network effect is precisely what’s required to keep a hard fork valid. When protocols, users, developers, and businesses support the hard fork, it stands a decent chance of succeeding. If they don’t, the network may remain operational but fade off into obscurity.

Marc Zeller, the Aave Integration Lead, tweeted: “You can’t have a fiat-backed stablecoin doubling the supply overnight and keeping 1$ value. USDCPoW & USDTPoW supply worth 0.”

He added that “circle & tether can later support EthPoW, but the only way is to issue new ERC-20 and forget the old ones.”

This is one of the biggest challenges EthereumPoW will face. Since the entire Ethereum network state was duplicated at the hard fork, all of the ERC-20 tokens on the network were doubled as well. Whether they have actual value or not depends on whether the relevant companies and protocols decide to accept and use EthereumPoW as well.

How Does EthereumPoW Work?

EthereumPoW works almost exactly like Ethereum did prior to the PoS merge. It remains a blockchain powered by proof-of-work consensus, featuring immutable transactions and smart contracts via the Ethereum Virtual Machine.

Blockchains like EthereumPoW are essentially networks made up of nodes that build and find consensus on transactions. These transactions, initiated by network users, are batched together into blocks along with a hashed identifier of the chain’s previous block.

What Makes EthereumPoW Unique?

EthereumPoW is unique because it provides proponents of PoW with a functional blockchain with years of proven use. PoS has many critics in the industry, and EthereumPoW is a valid, viable alternative.

How is the EthereumPoW Network Secured?

As its name implies, EthereumPoW is secured by PoW, or proof-of-work.

PoW blockchains rely on miners (network nodes that perform complex computations to solve for new blocks). These miners are incentivized to provide their computing power to the network by a block reward.

The miner that solves the computation can create the next block on the blockchain, and it will receive an ETHW reward. This can make mining a profitable business at scale.

The more miners there are on the network, and the more decentralized they are, the safer the network is. This is because most miners are required to validate blocks, so the blockchain can be compromised if a party can gain control of over half of the mining power.

What is the Use of ETHW?

ETHW is the native currency of the EthereumPoW blockchain network. Its primary use is for the payment of fees for the transactions conducted on the network.

While this sounds like a simple use case, it becomes more important as the usage of the network grows. If more dApps and other protocols start to support and use the EthereumPoW network, they will all have to use ETHW for fee payment.

Who Controls EthereumPoW?

It is as yet unclear who is behind EthereumPoW beyond public faces like Chandler Guo and Justin Sun. However, PoW blockchains are usually controlled by their miners, which may well be the case with EthereumPoW as well.

How Much Is ETHW In Circulation?

ETHW’s tokenomics matched the tokenomics of Ethereum at the time of the merge. This means that ETHW doesn’t have a defined supply cap, and just over 106 million ETHW are currently in circulation.

More ETHW enters circulation with the creation of each block on the network. This is paid to the successful miner via a block reward, and miners can choose to hold this ETHW or sell it for cash flow.

How Do You Buy ETHW?

Several exchanges promptly listed ETHW following the Ethereum merge, including Poloniex, which is backed by Justin Sun.

A lot of cryptocurrency exchanges have gotten in on the act since, including high-tier exchanges like Gate.io, Kraken, OKX, Huobi, and FTX.

If decentralized exchange platforms and DeFi protocols adopt and start to use the EthereumPoW blockchain, you could use them as well.

Is It Possible to Buy EthereumPoW Instantly?

Buying cryptocurrency on an exchange is usually fast—or even instant. However, withdrawing ETHW into your wallet might take a little while.

EthereumPoW should be able to finalize transactions quite fast, but it often takes exchanges a little while to complete withdrawal requests. This could be due to various reasons, such as batch processing and KYC (Know Your Customer) or AML (Anti-Money Laundering) protocols.

How Do You Store ETHW?

You can store ETHW in a compatible wallet. A lot of wallets are compatible with EthereumPoW since Ethereum is one of the most popular blockchains in the world.

Keep in mind that you may have to change the network settings on your wallet from Ethereum to EthereumPoW before making transactions.

EthereumPoW Energy Consumption

The entire point of Ethereum’s change of direction was to take up a proof-of-stake consensus mechanism. PoS is far less demanding when it comes to computation. Therefore, PoS chains don’t need as much energy as PoW chains do.

This does mean that EthereumPoW has the potential to be a big consumer of energy. Pre-merge, Ethereum was responsible for over 100 TWh of electricity consumption, according to Digiconomist.

EthereumPoW is currently nowhere near that sort of power draw because the network doesn’t have the sort of adoption that Ethereum does. However, if it were to grow to similar proportions, its energy consumption could certainly become a point of concern.

Is ETHW a Good Investment?

The success of EthereumPoW as a blockchain and a network over time will define how good of an investment ETHW is.

Several schools of thought have already emerged, and many crypto users have suggested ETHW is a retail trap. Most ETH holders would have received ETHW tokens when Ethereum forked, giving them assets that they could sell for an easy profit for free.

Many have warned that ETHW miners would attempt to pump the price of ETHW up before dumping their stocks on unsuspecting investors caught up in the hype. While this is possible, it is equally possible for different dApps and businesses to decide to actually use the network. If this happens, ETHW could be a very good investment indeed.