Ethereum is a programmable blockchain that maintains a publicly accessible record of transactions
The blockchain behind Ether, the world’s second-largest cryptocurrency after Bitcoin, will soon undergo a much-anticipated upgrade that could lead to more institutional investors investing in the network, driving its price up. The goal is to make Ethereum more scalable, secure and sustainable. Among other things, it would make its cryptocurrency mining obsolete, reducing the massive amount of energy required to create new currencies. This upgrade has been in the works for a while, and on March 15, Ethereum successfully completed a critical test.
According to a recent estimate by an Ethereum Foundation researcher, this upgrade can reduce energy consumption by at least 99.95 percent. The Ethereum website states, “Ethereum’s power consumption will be roughly equivalent to the cost of a home computer for each node on the network.”
According to Digiconomist estimates, Bitcoin + Ethereum uses an estimated 300 terawatt hours of electricity per year, which is more than Italy, Saudi Arabia and Mexico.
Ethereum currently uses proof-of-work, where miners must solve complicated problems to validate transactions and issue new currencies. This technique requires a significant amount of computer processing power and is often criticized for its negative impact on the environment.
With the upgrade, Ethereum moves to proof-of-stake, which allows users to validate transactions based on the number of coins they donate or wager. Users who wager more coins have a higher chance of being selected to validate transactions on the network and earn a reward.
Ethereum currently has both chains – proof-of-work and proof-of-stake – running in parallel. Only the proof-of-work chain carries out user transactions. When the integration is complete, the Ethereum blockchain will switch completely to the Beacon Network, a proof-of-stake chain that eliminates the need for mining.
As a result, Ethereum’s energy consumption is expected to decrease. More institutional investors are expected to acquire Ether, use the blockchain, invest in its network and increase adoption due to the lower environmental impact.
Ethereum is a programmable blockchain that uses multiple computers around the world to maintain a publicly accessible record of transactions. It can also be used to send cryptocurrency to anyone in exchange for a calculation and storage fee. It can also be used to create and access other financial products.
