The foundation that controls Ethereum, the second largest cryptocurrency, has confirmed that it will complete a plan to reduce its carbon emissions by more than 99% in the next month.
The “merge” project will see Ethereum switch the underlying technology it uses to validate crypto transactions to a new process that requires less energy to manage.
Once completed, the merger will eliminate the role of “miners” in the Ethereum ecosystem, allowing for significant reductions in electricity consumption. These users run massive amounts of powerful, purpose-built technology all day, every day, to generate random numbers that affect the overall network’s security.
Miners are upset that one of the largest cryptocurrencies, Ethereum, is shutting down its mining rigs.
According to Alex de Vries, a Dutch economist who runs the Digiconomist website, the energy consumption of ethereum mining is currently estimated to be around 72 terawatt-hours per year. That is comparable to Colombia’s power consumption, with a carbon footprint comparable to Switzerland’s.
The platform will shift away from a “proof of work” process that requires cryptocurrency miners to generate random numbers to verify records stored on the blockchain – the technology that underpins digital currencies such as ethereum and the more popular bictoin.
Instead, Ehtereum will use a “proof of stake” process, in which the network will be secured by users who “stake” sums of the cryptocurrency, committing to acting honestly at the risk of losing it.
According to De Vries, the switchover will eliminate the vast majority of electricity usage. “They could cut off a significant portion of their power demand.” I’ll work on quantifying it more precisely, but at least 99 per cent reduction should be achievable. This translates to a country’s electricity consumption (a quarter of all data centers in the world combined) disappearing overnight.”
The proof-of-stake model is currently being tested on an experimental “beacon” blockchain to ensure that the theoretical security it provides is adequate for the multibillion-dollar economy that sits on top of the ethereum network. The experimental blockchain will now take over the main network’s work.
“Imagine ethereum is a spaceship that isn’t quite ready for an interstellar voyage,” the ethereum foundation said, explaining the merge. “With the beacon chain, the community has built a new engine and a hardened hull. After significant testing, it’s almost time to hot-swap the new engine for the old mid-flight. This will merge the new, more efficient engine into the existing ship, ready to put in some serious lightyears and take on the universe.”
There are still other possible issues to be addressed. According to the foundation, users should be on the lookout for an increase in scam activity because hackers may try to take advantage of the confusion surrounding the switchover to trick users into giving up their passwords, funds, or both.
“You should be on high alert for scams trying to take advantage of users during this transition,” the organisation said. “Do not send your ETH anywhere in an attempt to ‘upgrade to ETH2’. There is no ETH2 token, and there is nothing more you need to do for your funds to remain safe.”
Ethereum will not be the first network to use proof of stake, with Cardano and Solana demonstrating the technology on a smaller scale. However, because of its continued reliance on proof of work, bitcoin, the largest cryptocurrency, will face renewed criticism.
According to De Vries, the bitcoin network consumes 130TWh of electricity per year, a figure that will become increasingly difficult to defend if the ethereum blockchain demonstrates that the same capabilities can be achieved in an environmentally friendly manner.
(Adapted from IndiaToday.in)