Ethereum has updated the software. Energy consumption will decrease

Blockchain ethereum has completed a major software update, its creator and co-founder Vitalik Buterin announced on Twitter. The goal of the update, denoted by the English word merge, is to significantly reduce energy consumption. It will drop by 99.95 percent, Buterin said.

“And we’re done!” wrote Buterin. “This is a big moment for the ethereum ecosystem,” added this young Canadian of Russian origin. Blockchain is a decentralized database that secures transactions with the respective cryptocurrency.

The update will change the way transactions are carried out on the ethereum blockchain and how so-called tokens, i.e. individual digital coins, are created. These in this case are called ether and among cryptocurrencies, they are the second most widespread in terms of volume after Bitcoin.

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“We expected that even after the update, ethereum would continue to be correlated with bitcoin. This is what happened. Some properties have changed now, and what this will do to the value of ethereum will only be seen in time,” said the head of Jakub Hlavenka.

The price of ethereum did not change much after the update was completed. At first it showed a slight rise, but shortly after 13:00 CET it hovered around $1,585 and has shown a decrease of one percent in the last 24 hours. At the same time, it remains well below the maximum from last November, when it rose above 4865 dollars. Other cryptocurrencies, including Bitcoin, are also significantly below their highs.

Not all consequences are positive

Ethereum is thus now moving from a “proof of work” system, in which energy-intensive computers verify transactions by solving complex mathematical problems, to a “proof of stake” system. In it, individuals and businesses act as validators and use their ethers as collateral in an effort to obtain new tokens.

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“Probably the most frequently mentioned benefit of this step is the reduction of energy consumption by an incredible 99.95%, but there will be significantly more consequences – and not all of them are necessarily positive,” stated Martin Kysela from the portal. “In the professional community, the most frequently discussed aspect of this solution is the potential reduction in the level of security of the entire network, with regard to the different transaction verification mechanism. For now, this is more of a hypothetical problem, but some more paranoid users perceive it very strongly,” he says.

In general, according to Kysela, it is concluded that the “merge” should have a positive effect on ethereum and thus its price should rise. However, whether this will actually happen is a question. “In the past few days, we have been able to observe the growth with the subsequent correction, and it can be assumed that the upcoming merger is largely already reflected in the price development. Much more interesting will be the role of central banks and regulators, who increasingly intervene in the events of cryptocurrency markets,” he added.

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The article is in Czech

Tags: Ethereum updated software Energy consumption decrease

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