Ethereum conversion: The second most important cryptocurrency needs much less electricity than before

The second most important cryptocurrency after Bitcoin, Ether, was switched to comparatively energy-saving operation with a comprehensive software update on Thursday. According to the Ethereum Foundation, the adjustment of the consensus or safeguarding procedure for transactions on the Ethereum blockchain, which has been planned for years, will increase the power requirement by 95 ,95 Percent lowered.

The Ethereum blockchain is a publicly accessible database that stores and verifies information and transactions in a cryptographically secure manner. Ether is the name of the cryptocurrency that is exchanged via the Ethereum blockchain. It is second only to Bitcoin in the crypto world in terms of total value.

To validate transactions on the blockchain in a tamper-proof manner, was in Ethereum – as in Bitcoin – the “Proof of Work” procedure has been used. Complicated cryptographic puzzles have to be solved and a lot of electricity is consumed. With the so-called “merge” – Ethereum has now switched to the “Proof of Stake” (PoS) process, which only consumes a fraction of the electricity.

With this alternative consensus procedure, the correctness of the blockchain entries is no longer checked completely decentrally (and thus energy-consuming), but by so-called randomly selected validators.

Using a portion of their crypto savings, they vouch for the integrity of the network and receive a reward for doing so: each time a transaction needs to be validated, a participant (»Staker «) selected from a raffle to verify the exchange and receive new digital coins in return. (Read more about this here .)

The crypto industry recognizes several advantages in the “merge”. On »«

Not all “miners” have gone along with the changeover

The Frankfurt economist Philipp Sandner, one of the leading blockchain experts in Germany, told the dpa news agency that with every hour that passes, the risk of the “merge” failing becomes smaller. “Whether technical problems – up to uncontrolled spin-offs or the standstill of the network – have not arisen, will only be seen in a few hours or even days.”

Not all actors are involved in the changeover involved, who have previously operated the Ethereum blockchain as “miners”. A spokesman for the Ethereum Foundation explained that the proportion of conversion refusers was much lower than feared.

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