Ethereum, the world’s second most valuable cryptocurrency, has completed a massive software revamp that claims to increase the coin’s security while also claiming to reduce its carbon footprint nearly entirely.
The relaunch, dubbed ‘The Merge,’ would do away with the necessity for crypto miners and massive mining farms, which have previously powered the blockchain through a technique known as ‘proof-of-work’ (PoW). Instead, it now uses a ‘proof-of-stake’ (PoS) method that selects ‘validators’ at random to approve transactions in exchange for a modest payment.
According to the Ethereum Foundation, a non-profit organisation committed to promoting the cryptocurrency and its related technologies, the switch to PoS would lower ethereum’s energy consumption by roughly 99.95%.
Ethereum is a decentralised cryptocurrency, which means that it does not have institutions like banks approving transactions on its network; before, approvals were done through the PoW consensus method, which was mostly done by miners. Miners would compete to solve tough mathematical riddles utilising a huge infrastructure of cutting-edge computer technology, with the first solver chosen as the validator. This strategy relied almost completely on crypto farms, which are large warehouses stacked with rows of computers that solve problems.
There was, however, one major issue: these mining farms were energy guzzlers, leading to one of the crypto industry’s most serious critiques that they often consumed more electricity than whole nations, and were therefore a major worry in terms of environmental sustainability.
Then there’s ‘The Merge,’ and the transition to the PoS consensus method. Ethereum is still a decentralised network, but the new approach eliminates the need for miners and mining farms to authenticate transactions. Instead, a validator will be chosen at random by an algorithm from a pool of users who’stake’ their coins on the network, which effectively implies committing at least 32 Ethereum tokens. This would completely eliminate the need for Ethereum network miners.
The announcement comes amid increased governmental scrutiny of cryptocurrencies, the value of which has plummeted since the beginning of the year. One of the most significant advantages of ‘The Merge’ is that it will make Ethereum network transactions incredibly safe.
Aside from that, it is viewed as an ecologically friendly step because Ethereum is predicted to require 99 percent or less energy.
Given that some of the most popular cryptocurrency applications, such as non-fungible tokens (NFTs) and decentralised finance (DeFi), rely on the Ethereum network, the changes might have far-reaching implications in the future.
At the Ethereum Community Conference in July, Ethereum co-founder Vitalik Buterin stated that the network will undergo more improvements after ‘The Merge,’ which he referred to as the “surge,” “verge,” “purge,” and “splurge.”
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