The most important event in the crypto world in recent months, namely the key change in the Ethereum blockchain network, is a fact. With it, the network drastically reduces energy consumption – by over 99%. For its supporters, the upgrade represents a major advantage as the network currency ether is already looking to steal the crown from its rival Bitcoin.
The major “overhaul” has changed the way transactions are carried out on the Ethereum blockchain and how the world’s second largest coin is created.
Most blockchains consume large amounts of energy and have come under criticism from environmentalists and some investors. Before the software upgrade, known as Merge, a single Ethereum transaction used as much energy as an average US household used in a week, according to researcher Digiconomist.
Ethereum has moved from a “proof-of-work” system, where energy-intensive computers validate transactions by solving complex mathematical problems, to a “proof-of-stake” system, where individuals and companies act as validators, using their ether as collateral to earn newly created tokens .
According to industry experts, this is a total game changer for the entire crypto sector, they explain to CNBC.
Happy merging everyone,” inventor Vitalik Buterin said in a tweet. “This is a big moment for the Ethereum ecosystem.”
Nine teams and more than 100 developers worked on the merger for years. In the coming hours, this decentralized network of programmers spread across the planet will monitor the deployment and, if necessary, debug as quickly as possible.
Bank of America said in a Sept. 9 note that the significant reduction in energy consumption after the merger “may enable some institutional investors who were previously barred from buying tokens because of energy to do so now.
The upgrade will also result in a significantly reduced supply of Ether, which could pave the way for it to become a deflationary currency in the coming weeks and months. Some investors say it could also help boost the token’s price, which soared immediately after the merger.
In the last hour, it is trading with a 3% growth to around $1,640.