The blockchain behind Ether, the world’s second-largest cryptocurrency after Bitcoin, will soon see a much-anticipated increase that may lead to more institutional investors investing in the network, helping raise its price. The goal is to make Ethereum, more scalable, secure and sustainable. It will, among other things, make its cryptocurrency mining obsolete, reducing the enormous amount of energy required to create a new currency. This upgrade has been in the works for a while, and on March 15, Ethereum successfully completed an important test.
According to the latest estimates from researchers at the Ethereum Foundation, this increase could reduce energy consumption by at least 99.95 percent. The Ethereum website states, “Ethereum’s energy costs will be approximately equal to the cost of running a home computer for each node on the network.”
According to estimates from Digiconomist, Bitcoin + Ethereum is estimated to use over 300 terawatt-hours of electricity a year, which is more than the consumption of Italy, Saudi Arabia and Mexico.
Ethereum currently uses proof of work, which requires miners to solve complicated problems to validate transactions and issue new currencies. This technique requires a large amount of computer processing power and is often criticized for its negative environmental impact.
With the upgrade, Ethereum will switch to proof of holding, which will allow users to verify transactions based on the number of coins they donate or bet. Users who risk more coins have a better chance of being selected to confirm transactions on the network and earn rewards.
Ethereum, at the moment, has both chains – proof of work and proof of importance – running in parallel. However, only work proof chains execute user transactions. When the integration is complete, the Ethereum blockchain will shift entirely to the Beacon Network, a chain of evidence of interest that will eliminate the need for mining.
As a result, Ethereum’s energy consumption is expected to decrease. More institutional investors are expected to acquire Ether, use its blockchain, invest in its network and increase usage due to lower environmental impact.
Ethereum is a programmable blockchain that uses multiple computers around the world to store publicly accessible transaction records. It can also be used to send cryptocurrencies to anyone in exchange for charges for calculation and storage. It can also be used to create and access other financial products.