Ethereum’s Upgrade Will Reduce Energy Consumption By Over 98%

Ethereum’s Upgrade Will Reduce Energy Consumption By Over 98%

Ethereum News
March 29, 2022 by Diana Ambolis
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The blockchain that underpins Ether, the world’s second-largest cryptocurrency after Bitcoin, is about to get a much-anticipated upgrade, leading to more institutional investors participating in the network, boosting its price. The goal is to improve Ethereum’s scalability, security, and long-term viability. It would, for example, render cryptocurrency mining obsolete, reducing the vast amount of energy
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The blockchain that underpins Ether, the world’s second-largest cryptocurrency after Bitcoin, is about to get a much-anticipated upgrade, leading to more institutional investors participating in the network, boosting its price. The goal is to improve Ethereum’s scalability, security, and long-term viability. It would, for example, render cryptocurrency mining obsolete, reducing the vast amount of energy required to create new currencies. The upgrade has been in the works for some time, and on March 15, Ethereum completed a critical test.

According to a recent estimate from an Ethereum Foundation researcher, this update can reduce energy use by at least 99.95%. “The energy expense of Ethereum will be about equal to the cost of running a household computer for each node on the network,” according to the Ethereum website. Bitcoin and Ethereum are anticipated to utilize more than 300 terawatt-hours of electricity each year, according to Digiconomist, which is more than Italy, Saudi Arabia, and Mexico.

To validate transactions and issue new currency, Ethereum currently uses proof-of-work, which requires miners to solve complex puzzles. This technology involves a lot of computer processing power and is regularly chastised for its destructive environmental impact.

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Ethereum will switch to proof-of-stake, allowing users to validate transactions depending on the number of tokens they donate or stake. Users who bet more coins have a higher chance of being chosen to validate network transactions and earning a reward.

Both the proof-of-work and proof-of-stake chains are now active on Ethereum. On the other hand, user transactions are only executed via the proof-of-work chain. When the integration is finalized, Ethereum’s blockchain will migrate entirely to the Beacon Network, a proof-of-stake chain that eliminates mining requirements.

As a result, Ethereum’s energy consumption should decrease. As a result of the lower environmental impact, more institutional investors are likely to acquire Ether. They will use its blockchain, invest in its network, and expand adoption.

Ethereum is a programmable blockchain that keeps an accessible record of transactions by using numerous computers worldwide. In exchange for a fee for calculation and storage, it is also used to send cryptocurrency to anyone. Other financial products can also be created and accessed using it.