On September 19, 2018, Ethereum will transition to the PoS algorithm. This event has the potential to have a significant impact on the entire crypto market. This article aims to provide a comprehensive overview of the various risks that can affect the cryptocurrency industry.

What is POS (Proof of stake) and POW (Proof of work)?

In order to find the last written block, a miner must perform a series of calculations to demonstrate their computing power. These calculations are performed in order to solve a massive math puzzle. The winner of this game is the one who can use the most computing power and successfully solve the puzzle. After the miner has found the last block's hash, it is then announced to the network by other nodes.

A proof of work algorithm is used to validate a transaction. When a user requests a transaction, the miner validates the data and adds it to the next available block. However, this process is hidden from everyone else. The last block's cryptographic hash value is required to be referenced in order to create a new block.

Ethereum transition from POW to POS. What will the miners do?

The process of validating a transaction falls under the responsibility of the "stakers." These individuals are those who decide to stake their cryptocurrencies to ensure that the transaction is legally binding. The larger the stake amount, the more likely the staker is to take responsibility for the transaction.

All of the cryptocurrencies in the network have already been created, and there is no need for anyone to perform mining. This eliminates the need for complex calculations and eliminates the need for constant updates.

What to expect from the transition of ETH to POS algorithm?

In September 2018, Ethereum will stop using the Proof-of-Work algorithm. This will cause the end of the production of ETH. One of the most important factors that will affect the mining industry is the number of tokens that the user owns. This will affect the profitability of the mining industry, which is one of the biggest businesses in the cryptocurrency industry.

Ethereum transition from POW to POS. What will the miners do?

The transition to the POS algorithm could cause various losses. This could also lead to manipulation in the market as video card manufacturers would need to maintain their interest in mining in order to maintain their stock prices. Following the transition to the PoS algorithm, two networks will be created: the Ethereum 2.0 and the PoW.

Following the fork, all of your assets will be duplicated in the new Ethereum 2.0 network. However, all of them will lose their value. This means that all of your assets will be in the same network, but with different cryptocurrencies. During the transition to the PoS algorithm, only a small portion of the original value will be retained. This means that investors can potentially lose a lot of money.

How not to lose your assets when duplicating the network?

Before you start duplicating the network, it is important to understand what assets will be transferred to the new Ethereum 2.0 network. This will include NFT, ERC-20, and liquidity on DEX. Another important aspect to keep in mind is that the majority of your assets will be transferred to the main network from L2 Networks. This means that there is a high likelihood that something will go wrong.

Ethereum transition from POW to POS. What will the miners do?

It is also important to dump all of your liquidity from the pools. Doing so will allow you to have an ETH/USDC position instead of a UNI-v2 USDC one. Finally, be sure to cancel all of your OpenSea bets. These will be accepted on the PoW network.

Whether stablecoins die?

According to official statements, the USDC and USDT will be losing their Ethereum (PoW) assets. Also, the Chainlink oracle doesn't plan on providing real-time data on the assets held in the PoW. This means that 50% of the DAI token will lose their collateral. According to the domino principle of cryptocurrencies, all stablecoins can fall.