On Tuesday, Ethereum began “The Merge,” a highly anticipated event in which the Ethereum blockchain will move from proof-of-work (PoW), which consumes massive amounts of energy, to proof-of-stake (PoS), which is more energy-efficient.
According to Ethereum, the transition will cut the network’s energy consumption by approximately 99.95%.
Last week it was estimated that Ethereum's annual carbon footprint is comparable to that of Hong Kong, and its annual use of electrical energy is the same as the country of Chile.
A single transaction on the Ethereum blockchain is equivalent to the power of consumption of an average U.S. household over 6.94 days.
The Merge is expected to happen next week, from September 13-15. On Tuesday, the Bellatrix “hard fork” took place, which, according to Ethereum co-founder Vitalik Buterin, will prepare the chain for The Merge.
The accompanying carbon-dioxide pollution from this exorbitant energy consumption is adding to the impact of climate change.
The major difference between a PoW model and a PoS model depends on how each transaction is validated on the blockchain.
PoW transaction verifications are done through crypto mining, which involves a competition between miners to solve cryptographic puzzles in order to earn “block rewards,” or compensation for their work.
For PoS, validators are chosen based on how much stake they have in the blockchain. In other words, they must purchase enough of the native token of a cryptocurrency to qualify to be a validator and earn rewards.
PoS uses less energy because it does not rely on physical specialized computing equipment, such as high-end graphics cards. The PoS protocol can be run from a laptop.
Also, under PoW, as the price of ETH rises so too does the power consumed by the network. With PoS, as the price of ETH increases, the security of the network does too (as validators want to protect their stake in the network) and the energy requirements remain unchanged.
Amidst the rollout the price of
ether (ETH) was recently $1,665, up 6.24% over the past 24 hours.