Ethereum’s shift to a different cryptocurrency mining mechanism shows how the industry is changing its ways.
Ethereum has become the dominant currency in the digital currency world after Bitcoin.
Now, the Ethereum network has made it clear that taking sustainability measures will be a key component of future growth.
The blockchain network that Ethereum runs on makes it a viable source of currency.
However, traditional blockchain requires a lot of energy and hardware to verify each transaction. The proof-of-work mining process used for verification is tried and true, but it strains resources, leading to potential environmental issues and higher energy bills for households.
In an effort to become a greener company, Ethereum no longer uses Proof-of-Work; it now uses Proof-of-Stake, the Iowa City Press-Citizen reported. This transition occurs in 2022.
PoS verification systems inherently rely on engaging in deceptive practices that greatly drain and punish those who attempt to slash cryptocurrency tokens.
Therefore, PoS is still able to support large blockchain networks like PoW without requiring as much computing power to run efficiently.
According to Press-Citizen, “PoS initiatives help democratize Ethereum because verification no longer requires computing power. This shift allows more users to participate in the network verification process, making Ethereum more accessible and attracting new user groups.”
As the publication observes, an update to Ethereum’s proof-of-stake mechanism, known as “merging,” has reduced energy consumption by approximately 99.95%, according to a report by the non-profit Ethereum Foundation.
PoS makes the cryptocurrency market more approachable and attracts investors who may be more ecologically aware of the impact digital currencies can have.
Many critics of the cryptocurrency industry point out that traditional digital currencies have a sizable carbon footprint, especially given their relatively short existence.
PoS greatly reduces these concerns, while PoW enhances them.
However, it’s worth noting that while Ethereum’s move to a PoS verification system is a step in the right direction for the environment, the cryptocurrency still has a long way to go before it becomes truly sustainable overall.
