Ethereum Cutting Back On Energy Use By 99%

Cryptocurrency-related news shows up everywhere these days, and whether you like it or hate it, you’ve probably heard a lot about it. From the latest crypto scandals to the rise and fall of different coins, the excitement around cryptocurrency is undeniable.

It’s frighteningly easy to look past the real-world consequences of the digital currency, as many are unaware of the huge impact that cryptocurrency has on the environment.

The biggest cryptocurrency, Bitcoin, uses approximately?110 Terawatts of energy annually. This adds up to about 0.55% of the entire world’s electricity consumption and matches the annual electrical use of small countries like Malaysia and Sweden.

With a single industry going through huge amounts of energy, it brings up questions about how much energy crypto should be allowed to use, and if crypto is worth the amount of energy it consumes.

Depending on who you are, you’ll answer these questions differently. Some believe cryptocurrency is “fake money”, and energy is wasted on it. Others see cryptocurrency as the future and think the energy consumption is more than worth it.

What Part Does Ethereum Play?

Ethereum, one of the big players in the cryptocurrency world, has recently announced its plans to cut back on energy consumption by 99%. The coin currently uses a whopping 78 Terawatts of electricity annually, roughly equal to the energy use of Chile.

The Ethereum Merge will change the coin from a proof-of-work to a proof-of-stake system, and in the process will cut back on its energy use substantially.

This move may set the precedent for other cryptocurrencies, though the cryptocurrency using the most energy, Bitcoin, doesn’t seem to have plans to follow suit anytime soon.

As regulations start coming down on cryptocurrency globally, miners may be forced to relocate to countries with lenient environmental regulations.

Proof-Of-Work And Proof-Of-Stake

Proof-of-work is the mechanism responsible for many cryptocurrencies’ huge energy consumption. Because it requires the use of many specialized computers, mining burns through energy quickly.

These machines are able to solve tough, mathematical equations in order to verify transactions and add new blocks to the blockchain, and in the process create more crypto coins.

A single Ethereum transaction can use the same amount of energy as the weekly energy use of the average American home.

Whereas proof-of-work requires vast amounts of energy and special hardware, proof-of-stake uses very little energy. Proof-of-stake instead relies on stakeholders turned validators to oversee and verify transactions, with those holding more coins getting priority.

With the energy-intensive methods eliminated, proof-of-stake sounds like the perfect solution to the problem. It’s not that simple, however, as crypto enthusiasts are divided over whether proof-of-work or proof-of-stake is the more secure mechanism.

What Does The Future Of Mining Look Like?

While it’s impossible to know how many regulations will be placed on cryptocurrency mining in the future, chances are pretty high that more and more states will start to find their mining activities limited, if not completely banned.

In states with strict environmental regulations, miners will have to decide between stopping or moving to a more lax state or country. While the proof-of-stake mechanism provides one solution to the problem, many worry whether or not it will be secure enough.

Article Link - Ethereum Cutting Back On Energy Use By 99%

Author - Staff Writer

BloggersHUBB