A historic upgrade for the second-biggest blockchain has been completed with massive implications for the environment.
Ethereum went through a massive development and overhaul spanning years where the digital machinery at the core of the cryptocurrency has been moved to a far more energy-efficient system.
The idea is to swap out one way of running the blockchain for another where proof-of-work changed to proof of stake (POS). “The metaphor that I use is this idea of switching out an engine from a running car,” said Justin Drake, a researcher at the non-profit Ethereum Foundation who spoke to CoinDesk before the Merge happened. “I like to think of it as kind of like the switch from gasoline to electric.”
The reason this development is of such a grand scale is in part due to the impact on the environment and the amount of electricity used in the process. According to prognosis Ethereum now should consume 99,9% or so less energy. In other words a gigantic change and potentially very good news for the world.
For example, one estimate points out that the change in electricity use is like if Finland shut off its power grid. In addition to this, the upgrade will make the network more secure and stable too. Ethereum houses an ecosystem of cryptocurrency exchanges, lending companies, NFT marketplaces, and other apps to a value of over $60 billion.
Cryptocurrency mining was the driving force behind the network but the energy-intensive process has now been fundamentally changed with the update. Crypto investors, skeptics, and enthusiasts around the world watched closely to see the merge finalized.
The update itself was one the of largest open-source software projects ever with many teams and individual researchers, developers and volunteers involved. The final result might be the stepping stone for skeptics of the environmental impacts to explore and experiment with Ethereum.
Impact on miners
Bitcoin which was introduced in 2008 came with the idea of a decentralized ledger where a secure single record of transactions that computers worldwide could view, change and rely on without any sort of middle hand.
Fast-forward to 2015 when Ethereum was introduced with the expansion of the core concepts of Bitcoin but with smart contracts. The contracts are computer programs that use the blockchain as a global supercomputer recording the data onto its network. This was the innovation that paved the way for NFTs which has been seen to be very popular in the recent crypto boom.
Up until today, the mining has been happening in farms where the common picture is a warehouse full with servers and computers on top of each other pumping out heat and guzzling enormous amounts of electricity. This is the core problem for the industry where many see the crypto-mining as a menace to the environment.
But that is now changing with Ethereum´s new system, in fact, it does minimize the mining to almost zero. Proof of stake means that miners are replaced by “Validators” who stake at least 32 ETH, sending them to a specific address in the Ethereum network where they cannot be sold or bought.
The more ETH a validator stakes the more likely it is that one of them will be chosen, almost like a lottery with its tickets. The chances grow with more “tickets” and the “winning ticket” is granted the ability to write a block of transactions in the digital ledger.
All of this is done with a bare minimum of energy to the point that one could compare the process to running an app on the laptop. Quite a quantum leap from the massive farms with electricity cables thick as a man’s arm. The reduction of energy use could be as much as 99,9% or even less, time will tell exactly.
Like with every new endeavor and development there will always be hurdles on the way. Ethereum´s merge was riddled with problems but now did overcome these. The prospect of being able to reduce the impact on the climate as well as create a more secure blockchain seems at hand. Ethereum is being able to view the megatons of carbon emissions in the rear-view mirror which should appeal to a lot of people around the world.