Bitcoin and other cryptocurrencies should follow Ethereum’s lead to be more sustainable: Expert

by James · December 12, 2022

It’s no secret that cryptocurrency have an expensive and persistent problem. As attractive as the benefits may be, the extravagant way enthusiasts assemble their arsenal of perpetual mining computers ends up costing exorbitant electricity. Shockingly, some estimates even show that cryptomining emits carbon dioxide equivalent to a small country.

This is obviously undesirable. As cryptocurrency continues to thrive in popularity and evolve, we need to measure each step carefully before placing it. In climate action, ignorance is misery. And if Ethereum could reduce its electrical energy needs by as much as 99.84%, experts believe it could Bitcoin and its other competitors.

Just a few months ago, Ethereum made a shocking move called ‘The merger‘, which fundamentally changed how block rewards were distributed. This change from a “Proof-of-work” system to a “Proof-of-stake” system eliminated the incentives to stockpile computers to make yourself crypto-richer by simply making the process non-competitive.

“They’ve maintained a lottery component, but now with proof of stake, you actually have to acquire wealth and you have to put up at least thirty-two Ether as collateral to become a block-producing validator,” explains De Vries, a computer scientist. “Then the software randomly selects one of those stakeholders to create the next block for blockchain. It does not motivate the participants to compete on hardware.”

The new problem, however, was that Bitcoin miners began using the now redundant servers for mining and other energy-intensive tasks. Therefore, the energy saved from such a serendipitous move was just wasted.

“If these machines do not turn off permanently, the energy savings from a global perspective will not be in line with the energy savings on the same network itself,” notes De Vries.

As with most other climate mitigation strategies, regulation and responsible consumption will serve as the saving grace here.

“Regulation will be helpful in making the community reconsider its current stance. The Bitcoin community has been very against change, but the Ethereum community has shown that despite concerns and resistance, it is possible to make the necessary changes on a live blockchain , which means that the Bitcoin community may need a little push from the outside actually to make things happen,” explains De Vries.