With the cryptocurrency industry entering the mainstream last year, its underlying issues have also come into the spotlight alongside it.
Sustainability or security?
These issues were especially exasperated this year when the rise of the DeFi and NFT sectors led to skyrocketing use of Ethereum. In fact, it brought traffic that the network may not have been prepared to handle.
In a recent blog post, the platform pointed out,
“Ethereum’s current energy expenditure is too high and unsustainable. Resolving concerns about energy expenditure without sacrificing security and decentralization is a significant technical challenge. “
Amid a severe backlash, Ethereum is now moving towards a greener ecosystem, with its switch to the Proof of Stake consensus mechanism using significantly less power compared to PoW.
Since it eradicates the need for miners and instead replaces them with validators that stake their own ETH as a form of trust, the need for high computational power becomes meaningless.
Ethereum’s PoS-based beacon chain has already been running since the end of 2020 and the network is supposed to fully adopt it by Q2 2022. Meanwhile, the chain has provided Ethereum with information on how scalable and energetically The network will be efficient after the merger.
PoW to PoS is the way to go
Also, according to the aforementioned blog post, the merger with PoS could result in a 99.95% reduction in total power usage, and that the mechanism will be 2000 times more efficient compared to PoW.
“Ethereum’s energy expenditure will be roughly equal to the cost of running a home computer for each node on the network.”
By comparison, an ETH transaction in PoW equates to the energy consumption of an average American household for 7.44 days, according to a informs of Digiconomist.
The post also suggested a “realistic estimate” for post-merger chunky Ethereum transactions with stacks, which turned out to be 25,000 to 100,000 transactions per second (tps). This means that the network would take around 4 seconds to complete 100,000 transactions, which would consume around 0.667 kWh of energy.
“This is ~ 0.4% of the energy used by Visa for the same number of transactions, or a reduction in energy expenditure by a factor of ~ 225 compared to Ethereum’s current proof-of-work network.”
Interestingly, a single ETH transaction currently uses as much energy as 100,000 VISA transactions.
While it is impossible to estimate what the future holds for the network after the Merger in terms of its ESG goals, Beacon Chain has caused problems in a different lane.
A recent Twitter user outstanding that the chain contract is the largest Ethereum contract containing 8,641,954 Ether, worth more than $ 34 billion at press time. Reportedly, this cannot be “shipped or spent”.
BREAKAGE: 8,641,954 ETH ($ 32 billion) trapped in Ethereum’s largest contract and cannot be shipped or spent. It will require a hard fork that has not yet been written or specified. The timing and terms of the hard fork are still unknown.https://t.co/xcXPwbS93v
– Tomer Strolight | Waving for the art of Bitcoin (@TomerStrolight) December 14, 2021
Even though the network might require an unspecified hard fork to redeem the funds, the large amount of ETH that has already been staked indicates high demand and confidence for the ETH 2.0 merger.
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Here’s the ‘realistic estimate’ for post-merger chunky Ethereum transactions with stacks