Worldwide electricity consumption has dropped by 0.2 per cent after the world’s second largest cryptocurrency switched to a “green blockchain”, according to developers.
Ethereum completed a long-awaited transition to a proof-of-stake (PoS) system in an event known as The Merge on Thursday. By doing so, its energy needs dropped by more than 99 per cent in an instant.
Before The Merge, Ethereum consumed roughly 112 TWh/yr using a proof-of-work (PoW) blockchain similar to bitcoin that required vast amounts of computing power to secure transactions and generate new units of the cryptocurrency.
This is roughly equivalent to the annual electricity consumption of a country the size of the Netherlands. Following Ethereum’s Merge, the total energy expenditure for securing the cryptocurrency is now close to 0.01 TWh/yr.
“The Merge will reduce worldwide electricity consumption by 0.2 per cent,” Justin Drake, a researcher at the Ethereum Foundation, claimed during a livestream of the event.
Ethermine, the world’s largest ether mining firm announced on Wednesday that it would be shutting down its crypto mining operations following the technical upgrade, unveiling a new staking pool to reward customers taking part in maintaining the network’s integrity.
The switch to PoS from PoW, which bitcoin pioneered and still uses, is considered by many within the crypto space as one of the most momentous events in the history of the industry.
“A move to Proof of Stake for Ethereum paves the way toward a more efficient and scalable industry in the long run,” Vijay Ayyar, vice president of corporate development at the crypto exchange Luno, told The Independent.
“With a more environmentally sustainable network, the Merge could help improve how cryptocurrencies are viewed and attract institutional and retail investors.
“Ethereum successfully moving to proof-of-stake is also a huge point of validation that the technology works and will pave the way for many more POS networks to flourish.”