Cryptocurrencies
Ethereum Overhaul Risks Creating a New Class of Kingpins
- A handful of ‘builders’ may hold lots of power after upgrade
- Builders may make money via market making, other services
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The much-anticipated upgrade of Ethereum will create new participants called builders in the blockchain ecosystem, a move that risks altering the power structure of what is arguably the most commercially important cryptocurrency network.
Under the current system, networks of computers known as miners pluck transactions out of a special data pool, and arrange them into blocks that are added to the blockchain. The miners are being eliminated as part of a plan to reduce energy consumption. After the planned September upgrade known as the Merge, the builders will gather transactions into blocks, which they will then send to the validators. The validators will sign off on the order of the blocks that will form the upgraded blockchain.