The creators of the Ethereum blockchain have indicated from the beginning that they intended to be a less energy-intensive ecosystem. The move from Proof of Work protocols to Proof of Stake is expected to be a game changer in terms of energy demand.
Update to Ethereum 2.0 scheduled for June 22, 2022
Just 6 months ago, the updated name of the Ethereum blockchain, The Merge, was announced with the goal of reducing mining energy requirements by more than 99.95% compared to the old one. process. The deadline for this protocol change is June 22, 2022.
Ethereum will be an all-green blockchain, ASICS and GPU miners will be excluded from the block verification process, and energy will be matched with a financial pledge. In order to have the quality of a network node, it will therefore be necessary to lock a certain number of tokens (minimum and maximum).
This mechanism tends to guarantee the honesty and benevolence of validators in the financial field. An entity that has invested heavily in becoming a node is more interested in making the system work and securing it than breaking it.
Ethereum’s annual inflation rate will drop from the current rate of around 4% to around 1%, making Ethereum even more scarce, and possibly even deflationary, as each transaction on the Ethereum network absorbs some of it by burning fresh supply. This mechanism burned almost 2 million ETH in 7 months, or 60% of the issue.
A few years ago, you could still compare the energy consumption of the Ethereum blockchain to that of a small country. The network’s blog explains that the goal is to reduce this consumption to the size of a small American town of 2,100 homes. To this end, in 2020 the blockchain deployed the new network “backbone”, which has the effect of significantly reducing ETH mining fees by reducing megawatt consumption by more than 50 times.
The transition from a proof-of-work verification protocol to a proof-of-stake will be accompanied by a final phase of update, called Docker, which will allow Ethereum 1.0 to link to Ethereum 2.0. Blockchain users are holding their breath, clinging to the lips of Vitalik Buterin, the computer scientist who created Ethereum and who is known for delaying some announcements indefinitely.
Meanwhile, ETH is on a bullish trajectory, rising from €2,366 on March 13 to €3,126 in early April.
Cryptos want to succeed in their energy transition
Currently, Ethereum is focused on Klin, a phase designed to test the future network and resolve any issues before a public release. A true mega-production that was a success, suggesting that the merger could take place sooner than expected.
If Ethereum officially takes the lead in a full transformation, the public expects Bitcoin to take over. If a simple change of code is enough to improve the situation, the king of cryptos seems reluctant, and this suggestion does not please everyone.
Away from controversy, Tezos is also cleaning up its processes, but has yet to comment on its green status. However, it ranks alongside Ripple and Solana as the lowest energy cryptocurrency.
In addition to being effective, Proof of Stake, Proof of History and other processes seem to be all the rage right now. Although younger, recent coins can give lessons to older coins. Bitcoin may be the most valuable and well-known, but it struggles to hide its detrimental impact on the ecology, sounding the death knell for all current blockchain transformations.
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The merge: the Ethereum update that will change everything
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