The project, called “the merge,” will result in ethereum changing the underlying technology it uses to validate crypto transactions to a new process that requires less energy to manage. Once completed, the merger will end the role of “miners” in the ethereum ecosystem, helping to dramatically reduce electricity usage. These users use massive amounts of powerful, specially designed technology all day, every day, to generate random numbers that affect the security of the entire network. The energy consumption of ethereum mining is currently estimated at around 72 terawatt hours per year, according to Alex de Vries, a Dutch economist who runs the website Digiconomist. This is comparable to the energy consumption of Colombia, with a carbon footprint equivalent to that of Switzerland. The change will see the platform move away from a “proof-of-work” process, which requires cryptocurrency miners to generate random numbers to verify records stored on the blockchain – the technology that underpins digital currencies such as ethereum and the more popular bitcoin. Ethereum will instead use a “proof-of-stake” process, in which the network will be protected by users who “stake” amounts of the cryptocurrency, pledging to act honestly at the risk of losing it. De Vries said the switch would eliminate most of the electricity use. “They could cut a huge chunk of energy demand. I will work to quantify this more precisely, but at least a 99% (probably even 99.9%) reduction should be achievable. This translates into something like the electricity consumption of a country like Portugal (a quarter of all the data centers in the world combined) disappearing overnight.” The proof-of-stake model is currently being used in an experimental “beacon” blockchain, where it has been tested to ensure that the theoretical security it provides is sufficient for the multi-billion dollar economy atop the ethereum network. Now the experimental blockchain will take over the work of the main network. “Imagine ethereum as a spaceship not quite ready for an interstellar journey,” the ethereum foundation said, explaining the merger. “With the beacon chain, the community has built a new engine and hardened hull. After significant testing, it’s almost time to replace the new engine with the old aircraft. This will merge the new, more efficient engine with the existing ship, ready to blast through some serious light years and conquer the universe.” There are still potential problems ahead. The foundation said users should be on the lookout for an increase in fraud activity because hackers could take advantage of the confusion surrounding the transition to try to trick users into giving up their passwords, money, or both. “You should be alert for scams trying to take advantage of users during this transition,” the agency said. “Don’t send your ETH anywhere in an attempt to ‘upgrade to ETH2’. There is no ETH2 token and you don’t need to do anything more to keep your money safe.” Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. The final stages of the merger are expected to begin on September 6, the foundation said, with the old blockchain being deactivated sometime between September 10 and 20. Ethereum will not be the first network to use proof of stake, and others such as cardano and solana have demonstrated the technology on a smaller scale. But his move will leave bitcoin, the largest cryptocurrency, facing fresh criticism over its continued reliance on proof-of-work. The bitcoin network uses 130 TWh of electricity a year, De Vries estimates, a figure that will be increasingly difficult to defend if the ethereum blockchain proves that the same capabilities can be achieved in an environmentally friendly way.
