With a market capitalization of more than 200 billion dollars today, Ethereum (ETH) is second in the ranking of the most valuable cryptocurrencies. On the other hand, this step is also for the energy cost of the crypto. In fact, this is one of the crypto-currencies whose demand for energy is the most greedy.
According to some estimates, Ethereum mining in 2018 required the use of approximately as much electricity worn by everyone in Iceland. It is common knowledge today that a typical transaction made through Ethereum uses up more energy than the average American household uses in one day.
Therefore, in the face of increased criticism from activists in the ecological movement, the co-founder of Ethereum and the creator of the cryptocurrency, Vitalik Buterin, started an update aimed at solve this excessively high energy cost. The Merger is therefore what has been awaited for a few years. Once the update is done, it may be possible to perform transactions using only 1% of the energy used today.
Impact of The Merge on Ethereum’s energy cost
To the extent that second largest cryptocurrency around the world, Ethereum has long been the subject of criticism for the huge expenditure of energy required to extract it.
Fortunately, the cryptocurrency is in the process of responding to its detractors, since according to the foundation that controls the platform, Ethereum it will soon reduce its carbon emissions by more than 99% over the next month (usually between 10 and 20 September).
Reminder: while the merge is coming around September 10-20, the beacon chain hard fork is on September 6. Make sure to update your clients beforehand! https://t.co/x8GQCbtNNk
— vitalik.eth (@VitalikButerin) August 30, 2022
This significant reduction in the cryptocurrency’s energy footprint will occur through the implementation of The Merge or even “the merger”. Through it, the technology on which Ethereum is based to validate cryptocurrency transactions will change in favor of a new process that is managed requires less energy.
Also, project officials believe that once the merger is complete, the role of miners will no longer be needed in the Ethereum ecosystem. This will of course help to significantly reduce the electricity consumption related to cryptocurrency. In fact, the miners are primarily responsible for the huge amount of energy that ETH requires every day using the protocol Proof of Work (PoW).
These users must run massive amounts of powerful, adaptive technology all day, every day. to generate random numbers which affects the security of the entire web.
What is the Merger?
The Merge update is an operation through which Ethereum developers are trying to change the way cryptocurrency blockchain operation.
Thanks to the update, the platform will abandon the Proof of Work technology it was based on since its inception. There were some problems with this technology, as it requires cryptocurrency miners to generate random numbers verify the records stored on the blockchain.
The new technology will be adopted by Ethereum after the merger Proof of Stake (PoS). Technology that creates a network that is completely digital and secure for the user. Unlike PoW, with PoS there will be no more competition between miners, but simply the choice of the individual on the blockchain to do the verification.
According to some digital finance experts, this change in Ethereum could effectively enable cryptocurrency eliminate most of their electricity consumption.
Proof of Stake Protocol: The future of cryptocurrencies?
ETH is far from the first network to use Proof of Stake technology. Some like cryptocurrencies Cardano and Solana demonstrated the use and usefulness of this technology on a smaller scale.
On the other hand, ETH is indeed the first to deploy PoS so widely. Many tests have been done to assess the compatibility of the cryptocurrency network and the technology.
Therefore, an exact model of the Proof of Stake system is currently in use on an experimental blockchain like Ethereum. According to the test results, the technology provides sufficient theoretical security to the multi-billion dollar economy which is based on the Ethereum network.
However, the whole system faces some potential problems. In particular, Ethereum officials said that they expect a large increase in scams and users be warned. In fact, ill-intentioned people could take advantage of the confusion associated with the move to try to trick users into giving up their passwords, their funds in different ways.
According to the latest news, the foundation behind the Ethereum network is preparing for the launch of the update. The final stages of The Merge will begin September 6 and the old blockchain will be inactive between September 10 and September 20. So it will be a question of updating his client before September 6 due to The Beacon fork.
If the Ethereum blockchain shows that it is possible to achieve the same capabilities that cryptocurrencies are valued for today in a more environmentally friendly way, many other cryptocurrencies will surely follow suit. On the other hand, it cannot be denied that Bitcoin, which is currently the largest cryptocurrency, will face further criticism for its continued reliance on the Proof of Work system.
The arrival of The Merge also benefits Ethereum killers or even Ethereum Classic (ETC) which saw their respective prices climb in recent months despite the bearish market.