After years of anticipation, the cryptocurrency ethereum finally implemented a serious network upgrade that completely changes how the blockchain verifies transactions, mints latest coins and secures its network. Called proof-of-stake, this method has reduced ethereum’s energy consumption by greater than 99%.
Energy usage has been considered one of the cryptocurrency industry’s biggest targets for critique. Nevertheless it’s not going that bitcoin will follow suit.
As an alternative, the bitcoin network is sticking with a system called proof-of-work, by which highly specialized computers attempt to guess a winning number that serves to validate transactions and create latest coins. That is what’s referred to as mining.
In the intervening time, guessing a winning number takes over 100 sextillion tries. All of this work helps to secure the network by making it nearly not possible for bad actors to accrue enough computing power to take control. But recent research also shows that in 2020, mining Bitcoin consumed 75.4 terawatt hours of electricity, greater than all of Austria or Portugal.
That is the system formerly utilized by ethereum. But now the network has swapped out miners for validators. As an alternative of playing an enormous computational guessing game, validators are assigned to confirm latest transactions, and earn ether as a reward for doing so.
To make sure that these validators act truthfully, they essentially must make a security deposit by staking a specific amount of ether coins into the network. If a validator tries to attack the network, they’ll lose their stake. Ethereum proponents say this penalty will make the network safer, while bitcoin enthusiasts see proof-of-work because the safer, tried and true approach.
Nevertheless, the optics of bitcoin’s energy use within the midst of the worldwide climate crisis has grow to be an issue for the network. In response, some major bitcoin miners are beginning to hunt down renewable energy to power their data centers and trying to vary the narrative by touting bitcoin’s energy use as an asset, because it helps drive investment into the nation’s aging electrical grid.
Watch the video to learn more about how cryptocurrencies try to go green
