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Ethereum (ETH) is set to slash its energy consumption by 99.95% within months as it makes the transition to a new infrastructure model.
The world's second biggest cryptocurrency currently has a carbon footprint comparable to that of Sri Lanka, but according to a blog post from the project, the shift to Ethereum 2.0 will dramatically reduce its energy needs. And while there's as yet no set date for when the change will take place, the post states that it will happen "in the upcoming months."
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Tesla’s announcement last week that it would stop accepting Bitcoin (BTC) as payment for its eco-friendly electric cars, due to the environmental impact of crypto mining operations, put the spotlight on the immense energy demands required of some of the top cryptocurrency performers.
Bitcoin’s proof-of-work consensus model requires high-powered computers — including specialized mining rigs — to constantly solve energy-intensive math equations for a chance to earn BTC rewards. According to Digiconomist, the entire Bitcoin mining network’s energy consumption has soared of late, and has a carbon footprint comparable to that of Portugal.
Ethereum (ETH) also uses a proof-of-work consensus approach for mining, and though not as power-hungry as Bitcoin, its total estimated consumption has multiplied by three times since the start of 2021.
Fortunately, there’s hope on the horizon. Ethereum 2.0 will feature a new proof-of-stake blockchain model that relies on validators holding tokens within the network. That will eliminate the need for power-hungry PCs mining ETH, and new estimates suggest that Ethereum 2.0 will be truly transformative, indeed.
According to The Ethereum Foundation, the non-profit organization that supports research and development behind the blockchain, the Ethereum 2.0 upgrade will no longer require “a country’s worth of power,” dramatically scaling down the energy demands of the network.
The foundation’s post on the matter suggests that the Ethereum 2.0 proof-of-stake network may only consume around 2.62 megawatts, or about as much as a small American town with about 2,100 homes, it claims. Not bad for a smart contract platform that powers a cryptocurrency that as of last week had a total market cap above $500 billion (it’s lower now), and is the backbone of loads of decentralized finance (DeFi) apps, crypto games, and other services.
To put it another way, a chart shared by the foundation suggests that if a single Bitcoin transaction was as tall as Dubai’s Burj Khalifa skyscraper and a current Ethereum transaction was the Leaning Tower of Pisa, then an ETH 2.0 transaction would be comparatively as tall as a single 0.025m screw.
Precisely when Ethereum 2.0 will roll out remains to be seen, however. The post states that teams of engineers are working overtime to ensure that The Merge, as the upgrade is being called, "arrives as soon as possible" — but then again, Ethereum 2.0 has been on the cards for years now.
Still, for those who have concerns about Ethereum’s energy consumption, these estimates are a seemingly positive sign of eco-friendly change on the horizon for the rising cryptocurrency.
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