While most people are concerned with Bitcoin’s energy consumption, or rather the process of its mining, many fail to acknowledge that Ethereum, among the top three cryptocurrencies in the world by market cap, does not fall far behind either. Mining Ethereum consumes a quarter to half the energy that Bitcoin mining does. But for most of 2018 that still meant using roughly as much electricity as Iceland. Put another way, the typical Ethereum transaction swallows more power than an average US household in a day.
“That’s just a huge waste of resources, even if you don’t believe that pollution and carbon dioxide are an issue. There are real consumers—real people—whose need for electricity is being displaced by this stuff,” says Vitalik Buterin, the 24-year-old founder of Ethereum.
While some major apps run on Ethereum, even Buterin says he suspects that Ethereum is consuming more than it gives in societal benefits. The problem – mining. Hence, Ethereum is looking this year to go on “an energy diet” to allow it to compete with more efficient projects in the blockchain. According to Ethereum’s leaders, the move is one of the planned upgrades within the network in 2019.
Ethereum Overhaul the Thing to Watch
Buterin believes it essential to cut energy consumption and costs related to mining Ethereum. The plan is to create a new Ethereum code. If successful, this will enable energy-efficient mining of the altcoin and reduce the energy needed to 1% of what it is currently today.
Ethereum’s overhaul would make it one of the year’s “most fascinating technologies to watch,” says cryptocurrency upstart Cosmos advisor Zaki Manian.
Making Ethereum Ecological and Financially Beneficial
Ethereum’s plan is to replace the PoW (Proof of Work) consensus with PoS (Proof of Stake) – an alternative mechanism to facilitate distributed consensus. As the plan goes, this will restrict millions of processors from processing the same transactions simultaneously – the concept used in PoW. Although shifting to PoS will cut down energy usage by 99%, and ultimately slashing computing power, the move is more than just ecological. There are financial gains. The benefit here is that this initiative will reduce how fresh Ether tokens are issued to uplift validators.
Apart from making Ethereum more energy-efficient, its revamp will essentially mark one of the most ambitious and important open community projects in the cryptocurrency world, where millions of miners and the Ethereum community will come together to “build and agree on” a new, better Ethereum.