Ethereum creator Vitalik Buterin has stated that the cryptocurrency will be completely redesigned this year, reducing energy consumption by over 99 percent and making Ethereum 2.0 more environmentally friendly than Bitcoin.
The amount of energy utilised by cryptocurrency is a big source of concern. Elon Musk and Bill Gates have previously warned against it, and Iran banned cryptocurrency mining, including Bitcoin, for nearly four months on Wednesday, after the country experienced regular outages. If the worries persist, modifications will be made to these popular digital coins, with Ethereum being the first to act.
Buterin intends to accomplish this by converting Ethereum from a Proof Of Work (PoW) to a Proof Of Stake (PoS) mechanism. He stated that the step has become critical due to the rapid growth of Bitcoin and Ethereum in recent years. Before a big slump in mid-May, most cryptocurrencies had been on an upward trend for the previous 12 months.
The system modification is projected to lower the cost of purchasing and operating powerful computing devices. There are three steps to the Ethereum 2.0 upgrade. The Merge, The Beacon Chain, and the third stage to introduce sharding. The first level is already operational, and it entails ETH staking to enable validator software. The migration of the present system to the new system will be the second stage. By the end of the year, it is likely to be over.
The third stage will introduce the sharding procedure, which divides the database horizontally and distributes it across multiple servers to lessen network stress. It is anticipated to begin next year. “With shard chains, validators only have to store/run data for the shard they're validating, rather than the entire network (as is the case today),” Ethereum explains.
The increasing popularity of cryptocurrencies has drawn attention to the environmental concerns that surround them. Because of the daily large-scale power outages in the capital Tehran and other locations, Iran decided to prohibit mining.
Elon Musk and Tesla declared earlier this month that they will no longer accept Bitcoin payments due to the cryptocurrency's environmental concerns. Bill Gates, the founder of Microsoft, had previously criticised Bitcoin mining for consuming more energy each transaction than any other technology known to man.