- Carbon-footprint breakthroughs could make ETH more environment friendly than BTC.
- ETH and BTC both work using a proof-of-work system.
- Proof-of-work uses the costs of purchasing and maintaining computer hardware.
- The progress on proof-of-stake is shown by a test net.
Developers and users of the most-used blockchain have been wrangling with its carbon footprint issue. However, many recent breakthroughs will finally allow them to slowly cut energy use in a year. Notably, this breakthrough could make Ethereum (ETH) more environment-friendly than Bitcoin (BTC).
ETH and BTC both work using a proof-of-work system that needs a global network of computers running around the clock. Moreover, software developers work for years to transition the ETH blockchain to a proof-of-stake system. This system uses a different approach to secure the network that eliminates the carbon emissions problem.
However, the change was delayed by more technical setbacks that could not come soon enough for the crypto world. This weathered its biggest bouts of volatility ever this month. More so, the news came after Elon Musk revealed that Tesla Inc. would stop accepting BTC as payment for cars. This is because of the rising energy use.
ETH Switches to Proof-of-Stake
According to the Cambridge Bitcoin Electricity Consumption Index, BTC networks currently use more power in a year than Pakistan or the UAE. Notably, the compilers of the index don’t estimate Ethereum energy use.
Vitalik Buterin said,
Switching to proof of stake has become more urgent for us because of how crypto and Ethereum have grown over the last year.
In addition, the change could help increase the price of Ether. For instance, investors who are environmentally conscious take note of its huge carbon footprint. Moreover, most of the criticism of proof-of-work comes from millennials and investors who value positive environmental, social and governance, or ESG, standards.
Even more, proof-of-work utilizes the capital costs of purchasing and maintaining hardware of computers. Also, the electricity to run them is the economic investment that needs to be paid by the people who secure the network or miners.
In proof-of-stake, Ether replaces hardware and electricity as the capital cost. Furthermore, a minimum of 32 ETH is needed for a user to stake on the new network. However, the more ETH a user stakes, there is a better chance they have of being selected to secure the next batch of transactions.
ETH 2.0 move has always envisioned the network being broken into 64 geographic regions in sharding. Recently, the progress on proof-of-stake is shown by a test net where transactions on the existing ETH blockchain were merged successfully onto the proof-of-stake system.