Ethereum blockchain to cut energy use by 99% with new upgrade ‘Merge’

Ethereum blockchain to cut energy use by 99% with new upgrade ‘Merge’

The Ethereum blockchain is reportedly planning to introduce a software upgrade known as ‘Merge’, aimed at decreasing its massive energy consumption, a step that is generating speculations of significantly broadening the application of the technology and boosting the value of the token.

Sources claim that a single Ethereum transaction currently absorbs as much electricity as the average U.S. household utilizes in a week.

Essentially, the upgrade will alter how ether tokens are created and transactions on the Ethereum blockchain transpire. Moreover, the new system is expected to use 99.95% less energy, according to the Ethereum Foundation, a group that serves as the network's spokesperson.

Albeit the exact time of the Merge is uncertain, Google and other websites monitoring the blockchain are estimating this move to occur in the early hours of Thursday i.e., 15th September. The Ethereum Foundation has cited that the event could materialze any time between the 10th and 20th of September.

If the event succeeds, Ethereum will transition from its existing ‘proof of work’ mechanism, which relies on energy-intensive computers to validate transactions by solving challenging mathematical puzzles, to a ‘proof of stake’ protocol, in which individuals and organizations act as validators and use ether as collateral to obtain new tokens.

Earlier in 2022, cryptocurrency prices plummeted as investors abandoned riskier investments due to a broad slump in financial markets. Before the Merge, Ether had witnessed a 65% growth since June-end, whereas Bitcoin had barely moved.

It is worth noting that in an era of decentralized finance, Ethereum has surfaced as a popular blockchain for various tasks, such as smart contracts and initiatives which use tokens representing conventional assets like bonds and stocks.

Surveys reveal that Ether is the second-largest cryptocurrency following Bitcoin, with a market valuation of almost USD 200 billion. However, this energy-saving upgrade represents a huge step forward for Ether and is likely to empower it in its race to become the world's leading blockchain.

Source Credit:

https://www.reuters.com/technology/ethereum-blockchain-undergo-major-upgrade-cut-energy-use-2022-09-12/