Ethereum stops wasting more energy than Chile uses

Ethereum stops wasting more energy than Chile uses
The Ethereum network is about to change its trust and validation model, eliminating a colossal crypto-mining network that uses more energy than most countries
The Ethereum network is about to change its trust and validation model, eliminating a colossal crypto-mining network that uses more energy than most countries
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The Ethereum network is about to change its trust and validation model, eliminating a colossal crypto-mining network that uses more energy than most countries
The Ethereum network is about to change its trust and validation model, eliminating a colossal crypto-mining network that uses more energy than most countries

The world's second-largest cryptocurrency is poised on the brink of a transformational overhaul. Within hours, "the merge" will happen, and the Ethereum network will eliminate 99.95% of its monstrous ~78 terawatt-hours per year energy consumption.

Cryptocurrencies like Bitcoin and Ether are not run by any bank or government. There is no central authority to decide whether a given transaction is legitimate or fraudulent – instead, the task of validating transactions and recording a traceable history for every unit of this electronic money is decentralized. In order for decentralization to work, validators need to be trusted that they're doing their job honestly and faithfully. And in order to be trusted, these people need to have some skin in the game, something to lose if they're caught cheating.

"The merge" – just hours away at the time of writing – is widely viewed as one of the biggest moments in crypto history. Ethereum is set to move away from its "proof of work" trust model, in which its blockchain validates transactions and ownership through the "work" of crypto-miners running exorbitant amounts of electricity through stacked banks of graphics cards, earning ETH currency in the process. This "work" – a series of very complex but ultimately useless calculations – proves that the miners have invested capital into their position as network validators. It's their skin in the game, money they put up to prove they're trustworthy.

The new model is known as "proof of stake." Under this model, anyone who stakes a minimum of 32 Ether tokens (valued at a little over US$50,000 at current rates) can become a validator. For each transaction, a group of validators are selected to perform a far less energy-intensive version of the mining process, and a consensus is reached. Any validator found to be acting dishonestly or doing the job incorrectly can have their staked Ether confiscated as a punishment – so there's still a considerable financial incentive to play by the book.

Switching over to the new model is an extremely complex and potentially risky move. The Ethereum network is decentralized, so it's not as simple as updating the software on a single data center. But the switch to proof-of-stake has been planned since the inception of the network, and since late 2020, a "beacon chain" proof-of-stake network has been running alongside the main Ethereum blockchain, intensively testing the new model. When "the merge" happens, the network will hot-swap over to the beacon chain for validation, and in theory, nothing will have to stop or be disrupted.

There are implications for security, for decentralization and for the future functionality of the Ethereum blockchain, which is set to expand in a series of subsequent upgrades referred to as "the surge," "the purge," "the verge" and "the splurge." And there are certainly risks – a move of this magnitude from a cryptocurrency of this scale (the entire network is worth nearly US$200 billion at this point) is unprecedented. Nobody really knows what this will do to the value of ETH, or what this will do to the crypto space as a whole.

But one thing does appear certain: the tap is about to be turned off on an unholy waste of energy that's objectively terrible for the planet. Whatever else you might think about cryptocurrencies, putting 78 terawatt-hours a year through piping hot banks of GPUs for no practically useful purpose is an absolute travesty as humanity musters its resources for an existential battle against climate change. "The merge" is about to flick the off-switch on an energy drain larger than the countries of Israel, Chile, Austria or Venezuela, and that's an incredible achievement – even if the network has poured hundreds of terawatt-hours down the global toilet to date.

This move does nothing, however, to address the biggest climate criminal in the crypto space. The Bitcoin network remains on the proof-of-work model, and its total energy consumption rate is estimated to have billowed out to an incredible 200-plus TWh/year through the first half of 2022. A single bitcoin transaction is estimated to produce a grotesque 776.13 kg of CO2 emissions, and uses enough electricity to power the average US home for a little over 47 days. A single transaction, with much of the power sourced in the world's cheapest markets.

And again, to what end? To power hundreds of thousands of computers in crypto-mining arrays as they perform essentially useless calculations, simply to prove the miners have spent enough money on power and GPUs to be trustworthy validators for the blockchain. Nothing is created, and there's no other economic value to this activity. It's hard to view this as anything but obscene, and the Bitcoin network has no plans to move to proof-of-stake, or any other model, at this stage.

Still, this is a critical moment for crypto, and anyone environmentally minded should hope it works out well for Ethereum. Learn more in the video below, and you can check Google to see a countdown to the moment when this historic switchover occurs.

ETHEREUM MERGE - The Most Anticipated Event In Crypto Explained


Thank you for caring about the environment. I'm an environmentalist as well and I want to tell you why a proof-of-work based monetary system is our *only* chance to stave off catastrophic climate change due to carbon emissions. It's because, with today's fiat system, when governments print off a cool $1T in six months, that money represents a *future claim* on energy. Every single thing you spend money on -- a boat? house? vacation? food? -- all of it requires energy input. When governments print money at breakneck speed faster than our planet has the resources to cover -- inflation (unaffordability for the poor) is the only thing that can slow down that future claim on energy, because the planet's production capability pedal is already to the metal. Ironically, governments solution to this is yet more printing (which creates more demand for goods and services, despite maximal production, so prices just go up and the problem repeats and gets worse).

A proof-of-work based monetary system slows that printing down by requiring *everyone*, even governments, to expend continuous work in order to generate those future claims on energy.

So why not a proof-of-stake protocol with a limited inflationary policy? Because it manifests social decay, because legacy whales can simply sit on their duffs and not produce anything, leading to a society that is optimized for the born-privileged instead of producers of work.
That was very well said.
@Chris's comment might make some sense if the production of valuable goods and services were inescapably proportional to energy consumption. A look at the data shows that that relationship stopped being true about 1974. "Proof of work" just throws away energy that could be used for other purposes, or not expended at all. (Perhaps interesting: official currencies used to be based on "proof of stake" -- with piles of commodity metal sitting in vaults to back their value -- but that turned out to be unwieldy and subject to manipulation. Perhaps digital proof of stake will be nimbler and less vulnerable to coordinated attack. Although someone with enough money might in theory be able to capture the blockchain and propagate their own version of financial history...)
Norm Ness
How many people who supported the mass of hardware will now be out of jobs, NOTWITHSTANDING the real estate, and the manufacturing of this technology....AND what will happen to all that leading edge hardware?
"energy consumption" is a false narrative and hugely redirects the conversation away from the main purpose (and effectiveness) of POW vs. POS:


50% of eth2 nodes are on AWS and fully 2/3rds is on three main cloud providers (AWS, Hetzner, OVH). My guess is a big chunk of that remaining 31% "other" is running on GPC and Azure.

Anyone so willing to dismiss this radical decentralization of etherium should clarify their agenda, because certainly a truly decentralized blockchain is not on it. If your blockchain is predominately hosted on a very select few cloud service providers... then "This site can't be reached" should be somewhere in your vernacular.

If America, the EU or <your-fave-country> decides it doesn't want the competition (or more likely, just wants to control your behavior) they can easily issue some form of cease-and-desist and poof: your blockchain just got cancelled. Obviously social-cancellation is just as big (or even bigger) of an issue. Just look at the false narrative against POW.

Ultimately, decentralized cryptocurrency, dapps, smart contracts and web3 in general are harmed by POS, if you consider a foundational element of blockchain to be freedom from government, social, or corporate control of your life (at least the economic api of your life).
There must be other practical solutions to the global money issue. The present system allows influencing the money supply locally for local benefit. Perhaps some global currency based on demand/supply of some common commodities (wheat, rice, cotton, vegetable oil), which can't be easily manipulated by individual countries. Are there already suitable solutions, that are suppressed by the rich&powerful? Do all those economics students only go on to careers based on local manipulations?
Sorry but a scam getting really popular w/ investors or lasting for many years, does not mean it is no longer a scam!
For example, massive Ponzi Scheme done by Bernie Madoff also had lasted so many years & got extremely popular w/ big investors!
Isn't printing your own money out-of-thin-air needs to be absolutely illegal (for extremely good reasons)???
Is any official money (like USD) which is backed-up/guaranteed by whole government & economy & military etc, really same thing as a "money" backed-up/guaranteed by nobody???
@Paul, saying, "proof of work just throws away energy that could be used for other purposes," ascribes your personal values to how energy should be used. This is a volatile precedent to suggest for something that has so far been decided 100% by the free market. Entities of a free society decide for themselves what they want to do, and then procure the energy to do it. For some, it might be hopping on a plane for a weekend getaway to Las Vegas. For someone whose local currency is not the world's reserve (USD), or whose local job market is not good, mining Bitcoin might be *their* priority. But the decision is each, our own. If something isn't a "good" use of energy, we don't do it. It's misleading when articles say Bitcoin "uses", or when they relate to the number of transactions -- technically all of Bitcoin could run on one desktop. Participation is voluntary.

Unrestricted monetary policy combined with easy extraction of fossil fuel is what got the planet's CO2 to where it is today, if we care we should restrict that, not peoples' freedom to utilize energy.