Ethereum isn't immune to crypto's emissions issues... but it's about to change big time.
👉Background: Ethereum is the second largest cryptocurrency by market cap at around $180 bn. It's behind only Bitcoin, of course. Ether (that’s the name of the actual cryptocurrency) went live back in 2015 and it spread like wildfire.
👉 What happened: But Ethereum isn't immune to crypto's emissions issues. It's total energy consumption is comparable to the Netherlands.
👉 What else: That's a scary comparison, but it's about to change big time... because Ethereum's going through 'the merge' from using 'proof of work' technology, to 'proof of stake' technology.
💡The crypto world doesn’t have a large intermediary like Visa or Paypal to make sure transactions are actually legit - so it uses two different mechanisms to overcome this.
💡You’ve got the ‘proof of work’ mechanism, which is used by bitcoin and previously used by ethereum too. To verify a transaction, virtual miners race to be the first to solve a really complex math puzzle. And the winner is rewarded with a tasty amount of crypto. But this takes a HUUUUGE amount of computing power.
💡Whereas in a proof of stake model, people who want to validate the transaction need to put up a minimum of 32 ETH ($70,000) to validate the transaction. And if they approve a bad transaction, they can lose the money!Here’s the biggest thing: the merge is expected to reduce Ethereum’s energy consumption by more than 99%.
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