One of the obstacles to the adoption of the two main cryptocurrencies (in terms of capitalization), Bitcoin and Ethereum, as a means of payment is the enormous amount of energy used to mine them. This is due to the fact that currently the blockchains of these two cryptos use the proof-of-work or proof-of-work consensus mechanism.
As we explained in a FAQ on the blockchain, on this consensus mechanism, users lend the computing power of their machines to solve cryptographic puzzles. And “the first user who finds the solution wins the right to add the next block to the blockchain. In exchange, he receives a small amount of the cryptocurrency he has just mined. »
In addition to the fact that this activity, called mining, is very energy-intensive, proof of work is also a brake on the scalability of the cryptos concerned. And this, as explained by the boss of FTX, means that Bitcoin cannot be considered a real payment network.
When it comes to Ethereum, it’s a different story. As of this writing, it still uses the power-intensive proof-of-work mechanism. But for years, the community has been preparing a major update, called The Merge, which will move Ethereum from proof-of-work to another mechanism called proof-of-stake.
On this consensus mechanism, there is no longer any question of solving mathematical puzzles with energy-consuming machines. On the other hand, users will lock the cryptos they own.
“The computer protocol randomly grants the right to validate a block to one of them. In this system, the probability of being chosen to validate the block is equal to the amount of cryptocurrencies locked. The greater the amount of cryptocurrency locked, the more likely the user is to be chosen to validate the transaction”reads our blockchain FAQ.
And this update which will reduce the energy consumption associated with the Ethereum blockchain, while providing it with more scalability, is imminent. This Merge is done in two stages and yesterday, Vitalik Buterin, the co-founder of Ethereum, announced that the first, called “Bellatrix hard fork”, has been crossed.
More transactions, but less energy used
“The Merge is still scheduled to happen around September 13-15”, can we also read in Buterin’s tweet. According to the Ethereum site, the reduction in energy consumption resulting from this Merge is estimated at 99.95%. With a reduced carbon footprint and better scalability, Ethereum could take off.
The merge is still expected to happen around Sep 13-15. What’s happening today is the Bellatrix hard fork, which *prepares* the chain for the merge. Still important though – make sure to update your customers!
— vitalik.eth (@VitalikButerin) September 6, 2022
Incidentally, the Ethereum site also explains that the update called The Merge sets the stage for the next evolution of the network, which will be scaling. Called Surge by Vitalik Buterin, but Sharding by the Ethereum Foundation, this other step is: “a phased upgrade to improve Ethereum’s scalability and capacity. »
“Today, Ethereum can process around 15-20 transactions per second. This Ethereum, including rollups, including sharding […] it will be able to process 100,000 transactions per second,” Buterin said in July.