Ethereum’s shift to a different cryptocurrency mining mechanism has demonstrated how the industry can change its ways.
Second only to bitcoin, ethereum has established itself as a staple in the world of digital currency.
Now, the ethereum network has made it clear that taking steps towards sustainability will be a key component in future growth.
The blockchain networks that ethereum runs on are what make it a viable currency source.
However, traditional blockchains require massive amounts of energy and hardware to verify each transaction. The proof of work mining process for validation is tried and true, but it strains resources, leading to potential environmental issues and higher energy bills for households.
Ethereum, in an effort to become a greener company, no longer uses proof of work; instead, it now uses proof of stake, according to Iowa City Press-Citizen. This shift happened in 2022.
The PoS verification system essentially relies on making attempts to cheat extremely financially draining and punishing those who try by slashing their cryptocurrency tokens.
Thus, PoS is still capable of supporting large blockchain networks like PoW, without needing nearly as much computational capacity to run efficiently.
Per the Press-Citizen, “The PoS move has helped to democratize ethereum, as the computing power is no longer necessary for validation. This shift has allowed more users to engage in the process of network validation, making ethereum more accessible and appealing to a new group of users.”
As the publication observed, an update to ethereum’s proof of stake mechanism, known as “The Merge,” has reduced energy consumption by about 99.95% — as reported by the nonprofit Ethereum Foundation.
PoS makes the crypto market more approachable and appeals to investors who may be more eco-conscious of the impacts their digital currency can have.
Many of those critical of the cryptocurrency industry point to the considerable carbon footprint traditional digital currency has had, especially given its relatively short existence.
PoS reduces these concerns by a significant margin, whereas PoW bolsters them.
It is crucial to note, however, that while the move ethereum made to a PoS verification system is a step in the right direction for the environment, crypto still has a long way to go to be truly sustainable as a whole.
As the digital currency landscape expands, the push for clean energy usage remains. Instead of relying on energy grids that burn coal, gas, and oil, crypto operations can shift to renewable energy sources such as wind, hydropower, and solar.
A new option for cryptocurrency, crypto cards, has even emerged as a greener alternative thanks to PoS.
The Press-Citizen emphasized that “as many industries turn towards sustainability, ethereum is poised to lead the way.”
The publication added, “Ethereum’s shift towards a more energy-conscious model demonstrates how blockchain networks can follow suit in reducing their consumption.”
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