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Cryptocurrency Ethereum’s carbon emissions set to plummet, but at what cost?

An imminent ‘upgrade’ to one of the world’s leading cryptocurrencies is imminent, offering a potential CO2 reduction of 99%. 

Ethereum, the world’s second largest cryptocurrency, is preparing to go through a major change its representatives have labelled ‘the merge’. Essentially switching the technology used to validate transactions, the end result is a huge reduction in electricity and energy use, and therefore environmental impact.

Overall, changing to the ‘proof-of-stake’ process, rather than ‘proof-of-work’ as is currently used, will mean Ethereum’s carbon emissions could drop by 99% overnight. Effectively cutting out the vast majority of power demands, it’s the latest major crypto name to make the change, and will mean Bitcoin – the largest cryptocurrency – will be the only remaining digital currency still using processes linked to huge energy use and environmental impact. 

However, Ethereum’s switch will come at a cost to some. Miners – crypto users that run bespoke technology round-the-clock to generate randomised sets of numbers needed to safeguard network security – will no longer have a role to play. At the time of writing, the combined daily energy use of Ethereum miners is roughly comparable to that of Colombia, and the resulting carbon footprint on a par with Switzerland. 

Clearly moving away from this damaging system is good news for environmentalists, but those that have been making money through mining face a familiar choice in the climate crisis era – switch network, adapt business model, or cease trade. A predicament that again reiterates that moving towards a net zero global economy doesn’t just require behavioural changes, but restructuring entire industries – a lengthy task society has increasingly limited time to complete. 

Looking for more on web2.0, blockchain and crypto? Revisit our long -read on how blockchain can help governments achieve their COP26 climate targets. 

Image: Kanchanara

 

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