Ethereum to dramatically change the technology underpinning its cryptocurrency
Ethereum is set to make a major change to the technology underpinning its cryptocurrency, which will drastically slash the amount of energy and emissions it uses.
Until now, ethereum has been built on “proof-of-work”, the same technology found in other cryptocurrencies like bitcoin. That foundation is the primary reason that many cryptocurrencies are so damaging to the environment: miners must undertake complicated calculations to sustain the network, and those calculations require a vast number of computers to be running and using energy.
But an alternative to that technology is “proof-of-stake”. That requires the use of much less energy.
Ethereum says its blockchain – which powers the second most valuable cryptocurrency in the world, ETH, as well as much of the recent rise in non-fungible tokens or NFTs – will be moving to proof-of-stake “in the upcoming months”, according to a blog post from the foundation that runs it.
At the moment, Ethereum currently consumers as much energy as a mid-sized country. That is required to keep the network safe, since the miners ensure that the cryptocurrency cannot be attacked by malicious users, and in return are rewarded with coins.
Because miners are rewarded with more coins – and therefore more value – by doing that work, the amount of energy being used by cryptocurrencies is increasing all the time. And much of it is powered by fossil fuels, contributing to the vast amount of damage to the climate being done by cryptocurrencies.
Under the new technology, however, that will be vastly reduced. The foundation says that it will use around 99.95 per cent less energy when the move is completed.
The change will take the amount of energy used from that of a country to that of a small town, or roughly 2,100 American homes.
The group behind the technology refers to the switch to proof-of-stake as “The Merge”, and says that it has “several teams of engineers” “working overtime” to ensure that it happens “as soon as possible, and without compromising on safety”, though it not give a more exact date.
“Ethereum’s power-hungry days are numbered, and I hope that’s true for the rest of the industry too,” wrote Carl Beekhuizen, the Ethereum Foundation researcher who authored the announcement.