Ethereum Blockchain Reduces Energy Use With 'Merge' Software Upgrade
Ethereum Blockchain
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Ethereum BlockchainReduces Energy Use With 'Merge' Software Upgrade
The Ethereumblockchain has undergone a major software upgrade, significantly reducingits energy use, its inventor and co-founder tweeted on Thursday. According tothe Ethereum Foundation, the new system will use 99.95% less energy.
The upgrade,which changes how transactions take place and how Ether tokens arecreated, could give Ethereum a major advantage as it seeks to surpass rival blockchainBitcoin. Richard Usher, Head of Over-the-Counter Trading at London-basedcrypto firm BCB Group, said, “We believe this is an important moment forETH to outperform the broader crypto market for some time. will inspire."
Most blockchainsconsume large amounts of energy and have come under fire from environmentalistsand some investors. Before the software upgrade, known as a merge, a singletransaction on Ethereum used as much power as an average Americanhousehold uses in a week, according to researcher Digiconomist.
With thesoftware upgrade, Ethereum has moved from a "proof of work"system, in which energy-hungry computers validate transactions by solvingcomplex math problems, to a "proof of part" system, whereindividuals and Companies act as validators, using their ether as collateral towin newly created tokens. "Happy merge all," inventor VitalikButerin said in a tweet.
(“Thisis a big moment for the Ethereum ecosystem.”)
The cryptocurrencyether fell as much as 4% to $1,571, a move analysts usually put in acautious mood for the riskier asset. Ahead of the merger, investors bet thatthe upgrade will drive up the price of the Ether token. Ether is up nearly 85%from its June lows, outperforming larger rival Bitcoin's 15% gain. Overall,however, the cryptocurrency has suffered this year, with both bitcoin and etherdown around 55%.
Ether took market share from bitcoinahead of the Merge, and now accounts for about a fifth of the $1 trillioncrypto market. Bitcoin's share has dropped to 39.1% from this year's peak of47.5% in mid-June. The bolstering of Ethereum's environmental, social andcorporate governance (ESG) credentials "would be good forregulatory-driven institutions that want to start to explore the Ethereumecosystem," said Marc Arjoon, ethereum research analyst at digitalasset manager CoinShares.
Ethereum’s network is now more efficient and uses fewer resources. It released a new software update called “Merge” which has reduced the energy consumption to 20 percent less than the previous version.