The long-anticipated upgrade is expected to make the cryptocurrency more than 99pc more efficient by removing the need for energy-intensive mining.
After years of discussions and delays, Ethereum has completed a massive upgrade to move towards a more energy-efficient system.
Today (15 September), the blockchain managed to transition from its previous proof-of-work system to a new proof-of-stake mechanism. This long-anticipated upgrade is known as the Ethereum merge.
The non-profit Ethereum Foundation has said the upgrade will lead to more scalability, security and sustainability. It is hoped that the move will reduce the blockchain’s energy consumption by around 99.95pc.
And we finalized!
Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today.
— vitalik.eth (@VitalikButerin) September 15, 2022
Prior to the upgrade, Ethereum worked off a proof-of-work system, which is a decentralised consensus mechanism.
This is maintained through the act of ‘mining’ and is the method behind other cryptocurrencies such as bitcoin. In simple terms, proof of work involves solving complex equations to create new coins and validate transactions on a blockchain network.
However, the process of crypto mining has been long criticised for the amount of energy it uses. A New York Times analysis last year claimed bitcoin mining consumes around 91 terawatt-hours of electricity annually, which is more than all of Finland.
In proof of stake, the need for energy-intensive mining is removed. Using this method, the blockchain network relies on trusted validators to verify transactions. These validators stake capital in the form of some cryptocurrency, which acts as collateral that can be destroyed if the validator “behaves dishonestly or lazily”.
The merge has been in the works for years, with the proof-of-stake model being referenced by Ethereum co-founder Vitalik Buterin as early as 2014. The upgrade has faced various delays, with Buterin discussing some of the “forks in the road” earlier this year.
Now that it has arrived, the upgrade is expected to boost the blockchain by massively improving its efficiency and removing hardware barriers to entry.
However, crypto experts have shared concerns that other issues need to be tackled to help the mainstream adoption of the blockchain.
The price of the Ethereum cryptocurrency rose following the successful merge, receiving a 3pc boost shortly after the upgrade, CNBC reports.
Earlier this month, the White House proposed restrictions to proof-of-work crypto mining as a way to reduce greenhouse gas emissions. The report described the proof-of-stake mechanism as “the most popular alternative” to the proof-of-work mining system.
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