The organization that oversees Ethereum, the second-largest cryptocurrency, has announced that it will finish a plan to reduce its carbon emissions by more than 99% in the upcoming month.
The effort, dubbed “the merge,” would cause Ethereum to convert to a new, less energy-intensive method of authenticating cryptographic transactions as its underlying technology.
Once finished, the merging will eliminate “miners'” function in the Ethereum ecosystem, significantly lowering the need for electricity. These users continuously run massive amounts of potent, purpose-built machinery in order to produce random numbers that have an impact on the network’s overall security.
According to Alex de Vries, a Dutch economist who runs the Digiconomist website, the annual energy consumption of mining ethereum is currently estimated to be at 72 terawatt-hours. That has a carbon footprint that is comparable to Switzerland and Colombia’s power use.
The switch will result in the platform abandoning a “proof of work” procedure that calls for cryptocurrency miners to produce random numbers to validate data stored on the blockchain, the technology underlying digital currencies like ethereum and the more well-known bitcoin.
Instead, Ethereum will employ a “proof of stake” method, in which users “stake” amounts of cryptocurrency to promise to behave honestly even at the risk of losing it.
The majority of electricity demand would be eliminated, according to De Vries. “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 centres in the world combined) vanishing overnight.”
On an experimental “beacon” blockchain, the proof-of-stake approach is now being used. Here, it has been examined to see if the theoretical security it offers is adequate for the multibillion-dollar economy that runs on top of the ethereum network. The main network’s operations will now be transferred to the experimental blockchain.
“Imagine ethereum is a spaceship that isn’t quite ready for an interstellar voyage,” the ethereum foundation explained in a statement explaining the merger. “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 midflight. 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 potential issues to be addressed. The foundation warned users to be on the lookout for a spike in scam activity since hackers could utilize the confusion surrounding the switchover to deceive users into handing up their passwords, cash, or both.
“You should be on high alert for scams trying to take advantage of users during this transition,” the organization warned. “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.”
The foundation stated that the final phases of the integration are anticipated to start on September 6 and that the old blockchain would be turned off sometime between September 10 and September 20.
Since other networks, such as Cardano and Solana, have tested the technology on a smaller scale, Ethereum won’t be the first to adopt proof of stake. However, as a result of its switchover, bitcoin, the most popular cryptocurrency, will now face fresh criticism for its prolonged reliance on proof of work.
De Vries calculates that the bitcoin network consumes 130TWh of electricity annually, a figure that will become harder to defend if the ethereum blockchain proves that the same capabilities can be attained in an environmentally benign way.