Ethereum, the world’s second most capitalised cryptocurrency by capital, has successfully transitioned from Proof of Work (PoW) to Proof of Stake (PoS).
The transition popularly known as “Ethereum Merge” is a historic accomplishment that will significantly reduce energy usage and also reduce gas fees attributed to the process of validation under Proof of Work.
Exactly at 7:59 this morning, Vitalik Buterin, the Co-Founder of Ethereum announced the success of the transition via his official Twitter handle.
He said “And we finalized! Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today”
Up until now, ETH, the token of Ethereum, was generated by Proof of Work which alternatively means “mining,”. It is an energy-intensive process by which individuals directed huge amounts of computer power at difficult-to-solve puzzles.
Additionally, generating Ethereum through Proof of Work is not just difficult but also consumes a lot of energy to power computers that race to solve complicated math equations to validate transactions.
With this transition, Ethereum will therefore be generated by individuals and entities pledging large amounts of pre-existing Ethereum.
This means that Ethereum users will need to make a pretty hefty investment upfront to authenticate transactions. However, Proof of Stake is expected to be much less energy intensive.
Before now, Ethereum claimed its carbon emission is believed to be at par with Singapore and its total energy consumption is comparable to the Netherland. This has therefore earned Ethereum some criticism, especially from environmental activists.
The merge is however expected to lower Ethereum’s carbon footprint by over 99%, which could make the platform more attractive to environmentally conscious investors.
Ethereum was conceived in 2013 and launched in 2015 by a programmer named Vitalik Buterin and a host of others which include Charles Hoskinson (Founder of Cardano Network), Anthony Di Lorio and Joseph Lubin. It has thereafter grown to become the second biggest cryptocurrency after Bitcoin.