That has led to shortages, both at the consumer and industrial levels. Bitcoin, still the largest cryptocurrency and one with no advanced plans to switch to proof of stake, uses the same amount of power every year as the Netherlands, and has a carbon footprint the size of Portugal’s, according to estimates from Digiconomist.Īs well as consuming large amounts of electricity, proof-of-work also creates huge demand for fast computer hardware. While proof-of-work has lasted more than a decade, it has come under increasing criticism for the extreme resource demands that it imposes on cryptocurrencies. Under proof-of-stake, when the price of ETH increases, the security of the network does too (the value of the ETH at-stake is worth more), but the energy requirements remain unchanged.” “Under PoW … as the price increases, in equilibrium so too does the power consumed by the network.

“This is not on the scale of countries, provinces, or even cities, but that of a small town (around 2,100 American homes).”Īnd, Beekhuizen adds, the benefits increase as the value of the cryptocurrency does. Where the existing Ethereum network uses about 5.13 gigawatts of power – around the consumption of Peru – Beekhuizen estimates the network will drop to just 2.62 megawatts after the switch. But now, according to Carl Beekhuizen, a research and development staffer at the Ethereum Foundation, which leads development on the cryptocurrency, the change will be complete “in the upcoming months”. The switch to proof of stake has been planned for several years, with a host of problems, both technical and organisational, delaying implementation. Under that approach, rather than handing out internal responsibilities based on how much electricity is burned, the system instead allocates power based on how much Ethereum existing users already hold – requiring them to “stake” a portion of their currency every time they make a decision. When the switch is complete, Ethereum will instead use a model called “proof-of-stake”. The security of the system as a whole is guaranteed by a requirement that members burn electricity doing complex but pointless mathematics, in order to ensure that no single user can dominate the system. Currently, Ethereum uses a “proof-of-work” system, like the model used by Bitcoin and most other cryptocurrencies.

At its heart, the plan involves shifting the way Ethereum’s underlying blockchain works.

Ethereum cryptocurrency jettison mining