The world’s second most popular cryptocurrency, ether, is about to shift to a new, greener operating model.
Currently, for “mining” it consumes the same amount of energy as a medium-sized country. For example, the Ethereum Foundation said that the platform consumed as much electricity as the Netherlands in June.
Now, what’s known as a “crash” would see carbon emissions cut by 99.9%.
Although cryptocurrencies have been a revolution in the world of economics, their contribution to climate change is unfortunate due to the amount of electricity used by the computers that run their circulation.
Plan to switch to the new paradigm, says Vitalik Buterin, co-founder of Ethereum (the digital platform whose currency is ether)has been on the horizon since the launch of the cryptocurrency in 2014, but has been put on hold due to the technical complexity involved.
It’s a kind of rebuilding the foundations of a skyscraper while they’re still standing.
The change is expected to be completed during the early hours of Thursday.
If something goes wrong, it could put the most important cryptocurrency ecosystem at risk, that will affect large and small investors around the world. If all goes well, consumers should not notice any changes.
Why are cryptocurrencies so polluted?
Unlike traditional currencies, cryptocurrency is a digital currency system where people make direct online payments to each other and where there is no such thing as a central bank. Instead, they are managed by what is known asblock chain”.
This “blockchain” is a global, decentralized network of high-powered computers that allows the creation or “mining” of digital currencies.
So far, the model known as “Proof of Work” or “Proof of Work” system.
The model works as follows: for A to perform a conversion to B in cryptocurrency, it sends a message to the network that includes other messages from other transactions. Together they make a “block” that is converted into a cipher code. In turn, each “miner” competes with the others to try to solve this token and they are rewarded for this work with new coins.
Once the process is resolved, it is verified by other miners and the transaction is confirmed.
Behind this complexity, the process It requires a lot of calculations and a lot of computer time. Therefore, there is a lot of electricity usage.
How Ethereum is changing to be more green
What will change from now on is that the blockchain will be integrated into the PoW system (what they called merge or “fusion”), with a carbon copy called Lighthouse (Beacon series). Behind this name appears a new tokenization scheme for the Ethereum cryptocurrency: Proof of Stake or Point of Sale system.
PoS . system It significantly reduces the number of computers needed to maintain the blockchain. Crypto metals are replaced by fewer “verifiers” in a transaction.
In addition to reducing Ethereum’s power load, the PoS system will reduce the amount of coins awarded as rewards (which is how digital coins are created) and regulators say it will reduce the total amount of existing coins.
Another change is that laptops and desktops can be used with this system, instead of the powerful data processing units (GPUs) that have been used so far.
Skip to Proof of Stake It will reduce energy consumption by about 112 TWh per year to 0.01 TWh per year.
Clean face and increased value
Those who defend cryptocurrencies always find a major stumbling block: the massive energy consumption that they involve.
In the case of Ethereum, with a “merging” and a change in the mining system, The hope they have is that this will be sustainable in the future and more energy efficient.
The change is expected to save a large amount of energy annually, about the energy consumption in Chile.
“It’s really exciting and a great achievement. Yes, there are nerves in the sense that things probably won’t go 100% well, but that’s to be expected,” says Justin Drake, a researcher at the Ethereum Foundation. “We now have an infrastructure that allows us to continue working even if parts of the network go down for any reason.”
as a result of the merger, Some analysts expect ether to outperform bitcointhe leading cryptocurrency by market capitalization, as the leader in terms of the total value of all coins.
‘miners’ in the air
The other side of the coin is from Crypto miners who must find a new way to make money with your team or sell it.
Some reports indicate that the sale of the GPU has already begun.
In a Dubai based crypto mining company, they invest tens of thousands of dollars in Replacing your PC’s GPU To mine ether for others that are more expensive and consume more energy but are able to mine bitcoin.
“It is difficult, as there is no other profitable Proof-of-Work like Ethereum,” said company spokesperson Ammar Lashkri. “We will keep some of our Ethereum computers and start mining altcoins, but it will not be the same, so we will slowly diversify into bitcoin mining.”
In Staffordshire, UK, Ash Andrews hopes to continue making profits by mining other coins with his current team.
“I have mixed feelings about ‘merging. It was an easy time for us miners who only work to mine ether. Now we will have to change to another currency. “There are a lot of changes,” Andrews says.
Some are more optimistic about the future of GPU mining.
Josh Reddit, CEO of Manchester-based Easy Crypto Hunter, thinks so Mining the lesser known coins will eventually become profitable.
“While Ethereum prices were on the rise, each of our mining rigs was making $150 a day, which is pretty crazy. Yes, we’re going through a period of low numbers, but who is going to determine the value of other coins in some three to five year period.