Ethereum’s long anticipated “Merge” finally took place in the last few hours and would seem to prove that a greener alternative of trading cryptocurrencies is possible.
The new system promises to be 99.5% more energy efficient than its old Proof of Work method and may lead to calls for other cryptocurrencies, both small and large, to follow suit. It will take some time for Ethereum developers to confirm that the transition took place without any hitches but so far the signs are promising.
“The Merge is a significant step forward bringing Ethereum into the mainstream, and it marks an evolution of blockchain technology,” said Gilbert Verdian, CEO of Quant.
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Was Ethereum’s transition, known as “The Merge”, successful?
The short answer is ‘yes’. Ethereum founder Vitalik Buterin tweeted as much on Thursday morning, although the cryptocurrency will need to continue to run checks on its network in the coming weeks.
The supposed ease of transition so far may put pressure on other cryptocurrencies, most notably Bitcoin, to move to a similar model if Ethereum’s transition proves to be as environmentally friendly as they’ve suggested.
How does Ethereum’s new Proof of Stake model work?
Ethereum’s new Proof of Stake (PoS) model has serious advantages over its old ‘Proof of Work’ (PoW) system in that it uses much less energy to verify transactions. The cryptocurrency estimates that it will use 99% less electricity in the process, which is the equivalent of a country the size of Portugal suddenly dropping its energy usage to zero.
This idea is obviously attractive given the scarcity of energy being experienced in Europe and much of the world right now, and that the biggest attack line against cryptocurrencies over the last few years is how unfriendly they are to the environment. Bitcoin, still the largest cryptocurrency, will still be using a Proof of Work model so will still require huge amounts of computing power to verify transactions, but the Ethereum Merge proves that another system is possible.
Critics of the new PoS model say that it gives preferential treatment to those with large amounts of Ethereum already (i.e. rich) as they will be more likely to be chosen to validate new transactions on the blockchain under the new weighted algorithm.
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