Ethereum and clean energy
Ethereum, the second-largest cryptocurrency in the world, should receive a software upgrade that will drastically reduce its carbon footprint. In a blog post this week, developers working on Ethereum’s basic infrastructure said that the cryptocurrency would move to a new recording method and validate transactions that will reduce carbon emissions by almost 99.95%. The planned reorganization comes amid increasing control over the environmental impact of cryptocurrencies.
Last week, Tesla boss Elon Musk said his business abandoned plans to accept bitcoin as payment, citing environmental concerns.
Earlier in the week, the Ethereum Foundation, a non-profit organization working on network maintenance, said it would soon switch Ethereum to a new infrastructure that would change the country’s energy consumption process to a tolerable level. Under the proof-of-work system, computers worldwide complete cryptographic mathematics equations to validate and secure online transactions. Solving these equations consumes huge amounts of electricity in the form of computing power. The enormous power required prevents an individual or group from targeting and overcoming the network, theoretically allowing the entity to write in transactions that send cryptocurrencies to themselves.
Under the deposit proof system, network participants must prove that they hold ethereum to contribute to its operations. Computers invest their Ethereum and, in turn, can confirm and secure online transactions. Most network participants must confirm transactions to pass them, which is an anti-fraud check. Bank of America analysts said that Ethereum is estimated to use a similar amount of energy each year as Cuba.
Beekhuizen said a system of proof of stakes would mean energy use is not correlated with price. Currently, the use of Ethereum energy is rising and falling in line with its price. Elon Musk was forced to abandon plans for Tesla to accept bitcoin as payment after a reaction related to the impact of cryptocurrency on the environment.
Bitcoin also uses proof of operation, and its core network uses more energy per year than Ukraine. Bank of America analysts said earlier this year that investors must pay attention to Bitcoin’s huge environmental costs. And that switching to share proof could reduce Ether’s carbon consumption, but it could also increase both the social and managerial risk of this cryptocurrency.
- Trading Instrument
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. If you are interested in following the latest news on the topic, please follow Finance Brokerage on Google News.