A merger that sees Ethereum move into a new era, abandoning one consensus mechanism for another, couldn’t come at a better time. Energy prices are soaring, the news about global warming is alarming, and calls for energy reduction and green solutions are growing every day. The stakes for the planet and its inhabitants are huge.
Ethereum has been an energy-efficient network since day one, due to an old security system called proof-of-work, where so-called “miners” get the right to update the next block of transactions. This privilege is granted by providing evidence by solving challenging computational puzzles, and miners earn new tokens in return. But to prevent too many new symbols from flooding the market, puzzle solving became increasingly difficult and required more energy.
Digiconomist estimates that Ethereum miners consume 44.49 TW hours per year, which is up to 5.13 gigawatts per year. This means PoS (Proof-of-Stake), the mechanism Ethereum will operate after the merger, is ~2000x more energy efficient than the above estimates – and this number may still be on the conservative side.
After the integration, it is expected to reduce at least 99.95% in total energy use. Proof-of-stake only requires designated validators to agree that the transaction is valid, and once enough nodes have verified the transaction, it simply passes. No more solving challenging and energy-consuming computational puzzles.
Junnu Salovaara, head of platform development at refinance (ReFi) company Likvidi, comments.
“Proof-of-stake integration significantly reduces Ethereum’s energy consumption by 99.95%. In terms of energy consumption, it now ranks alongside other protocols such as Tezos, Solana, and Algorithm. As it is still the second largest blockchain in the world by a large margin, it provides an opportunity for sustainable blockchain projects looking for a home.”
In the past, one transaction took enough energy to power the average American household for a week. After the fusion, the pot will be close to boiling.
Therefore, after Ethereum transitions to a new process for approving transactions, which should be done around the end of September, the local footprint should be significantly reduced. It is no longer possible to solve a puzzle, and thus eliminates the need for powerful hardware and large amounts of electricity to keep the blockchain running. That is, if all is well. So what could go wrong?
Developers say there’s nothing to worry about—they’re confident the integration won’t affect asset security or app functionality.
But there is always. Currently developed digital assets Ethereum Time can be multiplied by integrating into a fork proof-of-work network. Although the real versions of NFTs and stablecoins will exist on the post-merger, verification network, so copies may exist. Owners of these assets can then sell these surplus tokens to earn money.
But overall, the merger should be a positive transition. The new Ethereum network will appeal to institutions concerned about the current environmental impact of proof of work. Smaller computers that need less power can use the new network. Ethereum security will also improve. The attack on the network will be more expensive. But the planet will be the biggest winner by reducing energy use by 99.95%.