Although Ethereum, the second most popular cryptocurrency, exists purely in digital form, mining it consumes an estimated 8 terawatt-hours per year, which equals the power consumption of Chile. Because this process relies on large and powerful technology, it annually produces over 43 megatons of CO2, which compares to the carbon footprint of Hong Kong.
All of this is according to Alex de Vries in Digiconomist, a platform that monitors the economics of digital trends.
A project called The Merge aims to save the environment by reducing the carbon output of Ethereum by 99 percent. It upgrades the technology required for validating transactions to a new system that eliminates “miners” from the Ethereum process, which in turn cuts back on energy use.
- Mining for the cryptocurrency normally demands proof of work, which allows the decentralized Ethereum network to process transactions and agree on account balances by generating random numbers.
- The new method switches to proof of stake, which secures networks through users who stake capital in the form of cryptocurrency. If the stakeholder acts dishonestly or inefficiently, that capital can disappear.
According to De Vries, the new mechanism dramatically reduces the need for electricity. “They could cut off a huge chunk of their power demand. I will be working on quantifying that more accurately but at least 99% (probably even 99.9%) reduction should be achievable. This translates to something like the electricity consumption of a country like Portugal (a quarter of all data centers in the world combined) vanishing overnight.”
The Merge is currently undergoing extensive testing, complete with bug bounties. It is running the experimental Beacon Chain as a proof-of-stake on a few public telnets. The goal is to ensure the security of the billions of dollars that flow through the Ethereum economy. This blockchain will eventually combine with the Ethereum Mainnet to permanently replace proof-of-work with proof-of-stake.
The Ethereum foundation explains what’s happening with this analogy. “Imagine Ethereum is a spaceship that isn’t quite ready for an interstellar voyage. 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.”
While users can look forward to a more robust energy-saving system, they must be on the lookout for possible problems. The foundation expects scamming to increase as hackers take advantage of the changeover to glean passwords and funds from confused users. The organization cautions against sending your ETH to anyone to complete the upgrade to ETH2. “There is no ETH2 token, and there is nothing more you need to do for your funds to remain safe.”
Source: Information for this article comes from The Guardian and Ethereum.org.
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