Bitcoin may be regarded as the big brother to Ethereum as far as cryptos are concerned, but that doesn’t make Ethereum a small deal at all. Ethereum is anything but small when it comes to market capitalization which stands at around $1 billion not to mention the many applications Ethereum has enabled.
One of the biggest qualms about cryptos that governments have been concerned about, is electricity consumption, with Ethereum consuming about a quarter of what Bitcoin consumes during mining. Ethereum’s quarter is about as much power as the whole of Iceland produces, so you can only imagine what Bitcoin mining consumes.
According to popular crypto enthusiast and inventor of Ethereum Vitalik Buterin, the huge energy consumption by Ethereum and other energy sources is a huge cause for concern.
He stated this about Ethereum’s huge energy consumption
“That’s just a huge waste of resources, even if you don’t believe that pollution and carbon dioxide are an issue. There are real consumers—real people—whose need for electricity is being displaced by this stuff,”
Buterin, therefore, plans to solve this problem in 2019. This year, he and the Ethereum foundation that he co-founded, and the broader open source movement are planning to test out a long-promised overhaul of Ethereum’s code. If the developers get it right, Ethereum’s new code will have the ability to complete transactions using just 1 percent of the energy consumed today.
Ethereum’s attempted rebirth will be one of the year’s “most fascinating technologies to watch” says Zaki Manian, who is advising the crypto startup known as Cosmos. According to Manian, Ethereum’s development process means that many coders, as well as organizations, must collaborate, agree on specifications, invent the technology to implement the specifications and make them work seamlessly. In Manian’s words, “It is by far the most technically ambitious open community project that has ever been attempted,”
Ethereum’s relies on a Blockchain which is a digital ledger of transactions maintained by a community of users. Buterin designed Ethereum to do more than securely maintain a ledger without a central authority. His vision was for Ethereum to become a global computer that’s decentralized, accessible to all, and essentially immune to downtime, censorship, and fraud.
For Vitalik Buterin, slashing energy consumption has been on the Agenda since the very beginning. A lot of Ethereum’s proponents think the same way. According to Ethereum contributor Paul Hauner who is the co-founder of Australian Cybersecurity and Blockchain development firm Sigma, “It’s widely accepted in the Ethereum community that PoW uses far too much energy. For me, it is the No. 1 priority,”
Ethereum will address the energy problem by replacing PoW with proof of stake (PoS). Instead of millions of processors simultaneously processing the same transactions, PoS randomly picks one to do the job.
The move to PoS will slash energy consumed per Ethereum transaction by more than a hundredfold according to Buterin.
“The PoW part is the one that’s consuming these huge amounts of electricity. The blockchain transactions themselves are not super computationally intensive. It’s just verifying digital signatures. It’s not some kind of heavy 3D-matrix map or machine learning on gigabytes of data,” he says.
Cutting Ethereum’s energy consumption will not just be an ecological move it will also have a financial benefit since it will reduce the rate at which fresh ether is issued to encourage validators- extra money that dilutes a currency’s value. A senior Rocket pool blockchain developer, in Brisbane Australia, explained this by stating “Because PoS validators aren’t expending all of this energy, we don’t have to reward them as much,”
Moving to POS also has a security advantage since each validators account location is known and can be destroyed should they break the rules. By 2015, the advantages of PoS had already convinced the Ethereum community to make the switch. 2019 will see the coming of Ethereum 2.0 which will make a world of difference.
I am a crypto enthusiast based in Nairobi Kenya, who loves investing, research writing, reading, fitness, African food, and soccer.
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