The blockchain behind Ether, the world's second-largest cryptocurrency after Bitcoin, will soon see a much-anticipated upgrade that might result in more institutional investors investing in the network, helping to boost its price. The goal is to make Ethereum, more scalable, safe, and sustainable. It would, among other things, make its cryptocurrency mining obsolete, decreasing the enormous amount of energy necessary to create new currencies. This upgrade has been in the works for a while, and on March 15, Ethereum completed a crucial test successfully.
According to a recent estimate from a researcher at Ethereum Foundation, this upgrade can cut energy use by at least 99.95 percent. The Ethereum website states, “The energy expenditure of Ethereum will be roughly equal to the cost of running a home computer for each node on the network.”
According to estimates from Digiconomist, Bitcoin + Ethereum are estimated to use over 300 terawatt-hours of electricity per year, which is more than Italy, Saudi Arabia, and Mexico use.
Ethereum currently uses proof-of-work, which requires miners to solve complicated problems in order to validate transactions and issue new currency. This technique necessitates a significant amount of computer processing power and is frequently criticised for its negative environmental impact.
With the upgrade, Ethereum will move to proof-of-stake, which will allow users to validate transactions based on how many coins they donate or stake. Users who stake more coins have a better chance of being selected to validate transactions on the network and earning a reward.
Ethereum, currently, has both chains — proof-of-work and proof-of-stake — running in parallel. However, only the proof-of-work chain executes user transactions. When the integration is complete, Ethereum's blockchain will completely switch over to the Beacon Network, a proof-of-stake chain that will eliminate the need for mining.
As a result, Ethereum's energy usage is expected to reduce. More institutional investors are expected to acquire Ether, use its blockchain, invest in its network, and increase adoption as a result of the lower environmental effect.
Ethereum is a programmable blockchain that uses multiple computers around the world to keep a publicly accessible record of transactions. It can also be used to send cryptocurrency to anyone in exchange for a charge for calculation and storage. It can also be used to create and access other financial products.