Is Power Consumption a Reason for Ethereum Merge?

                          Power Consumption Vs Ethereum Merge

 

        According to a recent assessment by the White House Office of Science and Technology Policy, yearly power usage for cryptocurrencies would exceed that of individual nations such as Argentina or Australia by August 2022. Researchers who have researched cryptocurrencies are concerned about their massive energy consumption. The majority of the energy is needed for mining, which is a computationally difficult process for confirming blockchain transactions while also distributing new currencies as a reward to competing miners. 

        Crypto mining favors well-funded groups that can assemble a large number of specialized computers and provide them with energy as inexpensively as feasible. This can have unintended effects. Prior to the drop in cryptocurrency values earlier this year, demand for computer graphics cards skyrocketed, driving up costs and emptying shop shelves, much to the anger of gamers. These GPUs proved to be great for crypto mining setups. Cities and governments in the United States have also resisted crypto companies' intentions to develop mining operations in their territories, citing power consumption and noise.

        The software upgrade mostly eliminates the need for miners. Whereas Ethereum previously competed with miners against each other in order to solve complex cryptographic puzzles and win new coins as rewards, it now requires parties who want to help validate transactions to put some effort into the game by "staking" a certain amount of  Ethereum. Parties from this pool are picked randomly to validate a block of transactions; their work is subsequently reviewed by a larger group of ether holders. Successful validators are rewarded in ether accordance with the quantity of their stake and the length of time they have held it.

        According to Alex de Vries, an Economist and the founder of the Digiconomist consultancy that focuses on the environmental effect of cryptocurrencies, The ethereum merger may not seem like much, but it has the potential to have tremendous impacts, and its a fairly minor tweak to the code that will have a huge impact on environmental sustainability. Prior to the merger, ethereum could do up to 900 billion computations per second, which are no longer required. Referring to Lena Klaassen, co-founder of the Crypto Carbon Ratings Institute, a German institute that specializes in evaluating crypto environmental consequences, Ethereum's merger was long anticipated and included years of planning by its developer teams. 

        On the other hand, bitcoin's energy consumption and greenhouse gas emissions are substantially higher than those of ethereum — yet there doesn't appear to be much excitement for calling off bitcoin mining. "Such objectives never existed for Bitcoin," she added.