The consensus mechanism shift by Ethereum and the consequent changes in Solidus’ business model
The shift that everybody has been waiting for is coming next year: Eth2 will be launching and with it the shift from the consensus mechanism proof-of-work (POW) to proof-of-stake (POW).
How is this an exciting transition?
Bitcoin, as well as Ethereum, have been making use of the POW consensus mechanism, which is done by miners, using computational power to solve cryptographically hard equations resulting in a strain on the environment. Furthermore, transaction costs, as well as the throughput time, have been rising due to the number of transactions requested and Ethereum’s ability to process around 15–45 per second.
The shift to POS will result in a more scalable, secure, and sustainable future for the Ecosystem.
- Scalability — To scale, Ethereum needs to be able to process more transactions per second, coupled with more nodes which results in more security. Shard chains will expand Ethereum’s ability to process transactions on a higher scale and throughput time. The multi-phase upgrade will spread the network’s load across 64 new shard chains.
- Security — The transition to POS results in more disincentives against a 51% attack. Firstly, to attack one would need to control 51% of the staked ETH which would likely result in a drop of ETH which is unfavorable for someone having a majority of stake in it. Furthermore, the protocol could immediately destroy their ETH.
- Sustainability — in a POS there is no mining, hence no use of computational power resulting in significantly reduced energy usage
Whilst Solidus’ original model was based on the mining of Ethereum, this will become obsolete with the adoption of the ETH2 consensus mechanism shift to PoS. Regardless, the shift from POW to POS by Ethereum was already anticipated by Solidus when the company was launched in December 2017. Therefore, Solidus had been building up relationships with authorities and corporations who would probably need AI services in the future. Since April 2020 the demand for AI has exceeded predictions. The problem identified by Solidus is the lack of High-Performance Computing (HPC) Data Centers in Europe. As Europe consumes 33% of HPC resources yet only produces 5% of the computing power, it relies on expensive power from the United States, which leaves a gap that Solidus has bridged by building a data center facility in Budapest and commencing to build an HPC infrastructure.
In the near future, a recently approved EU grant will be going towards an AI infrastructure that will enable government authorities, corporations, Small-medium Enterprises, and professionals to buy AI services through Solidus’ Infrastructure-as-a-Service program.
Solidus aims to become the top HPC center in Europe and top ten globally.
Some examples of AI services that Solidus has planned for the future are around
- Medicine: It could be tailored to the specific individual and exact genome. AI algorithms will enable specifically tailored medicine according to your lifestyle, environment, and genes.
- Cybersecurity: AI technology will aid in preventing millions of security breaches each year. This will be achieved by AI-based tools detecting malicious and viruses before any information is stolen or harm is caused.
- Vital Tasks: This can be beneficial especially for the elderly who need assistance with basic tasks like mowing the lawn, cleaning, cooking, and so on. Many other jobs that are repetitive and physical are perfect for AI-based tools, unlike tasks where a lot is at stake like mining or firefighting which is not suitable for AI.
- Transportation: Autonomous cars already exist, yet AI will have an immense impact on self-driving cars in the future. Driverless trains are already dominating in European cities, and did you know Boeing is building an autonomous jetliner?
Currently, in the AI market, there is insufficient capacity, lack of quality data, limited availability of AI capabilities, a lack of AI competence center, and poor awareness of the opportunities that AI can bring to the real economy.
Solidus AI will build the technology that will enable communities to feel more connected and safe and henceforth become the leader of the democratization of AI.
