Ethereum – the world’s second largest digital currency by market cap and the number one competitor to bitcoin – allegedly experienced its turn from proof of work (PoW) to proof of stake (PoS) just over a week ago.
Ethereum Has Completed the “Merge”
Many are wondering how much energy is slated to be saved now that Ethereum has made the move it’s been talking about for the past God knows how many years, and according to one analyst, Ethereum is slated to bring its energy use down by more than 99 percent.
In an interview, Alex de Vries – a Dutch economist that works with the Digiconomist website – explained:
They could cut off a huge chunk of their power demand. I will be working on quantifying that more accurately, but at least 99 percent (probably even 99.9 percent) reduction should be achievable. This translates to something like the electricity consumption of a country like Portugal (a quarter of all data centers in the world combined) vanishing overnight.
Known as “The Merge,” the move from PoW to PoS is slated to make Ethereum far more efficient not just in how much energy is saved, but Ethereum will also become considerably faster and gas fees will be lowered for its users. Throwing its two cents into the mix was the Ethereum Foundation, which explained not too long ago:
Imagine Ethereum is a spaceship that isn’t quite ready for an interstellar voyage. With the beacon chain, the community has built a new engine and a hardened hull. After significant testing, it’s almost time to hot swap the new engine for the old mid-flight. This will merge the new, more efficient engine into the existing ship, ready to put in some serious light years and take on the universe.
Still, there could be minor issues ahead as the organization points out. It continued its statement with:
You should be on high alert for scams trying to take advantage of users during this transition. Do not send your ETH anywhere to ‘upgrade to ETH2.’ There is no ETH2 token, and there is nothing more you need to do for your funds to remain safe.
Too Much Energy Use
There has been much debate over the years regarding energy use in the digital currency space. Many are worried that mining or extracting units of crypto from their respective blockchains requires too much electricity.
This argument has clearly gotten to the heads of people like Elon Musk, the South African billionaire behind companies like Tesla and SpaceX. Last year, Musk announced he was going to allow bitcoin holders to buy Tesla vehicles with their coins. However, this was immediately rescinded given that Musk was too worried about how much energy was required to mine BTC, and he said he would not allow this unless miners were more transparent about their energy sources.