The cryptocurrency Ethereum’s power consumption may have decreased by amounts comparable to a country due to a change in the way it functions.
According to research published in the data-science journal Patterns, the quantity of electricity saved is comparable to that utilized in Ireland or even Austria.
The biggest cryptocurrency, Bitcoin, is said to consume more electricity than Finland.
According to the paper, there has even been speculation that Bitcoin emissions may surpass the global savings currently achieved by using electric vehicles.
Like all cryptocurrencies, Ethereum runs on a blockchain, which is a sizable database that is constantly updated and records every transaction.
Previously, many cryptocurrencies, including Bitcoin, employed a technique called Proof of Work to maintain and verify this.
New bitcoin coins were given to businesses and volunteers whose computers supported the network’s operation.
The likelihood of producing new coins increased with the amount of work they accomplished.
According to the report, this spurred firms to set up enormous warehouses of computers operating continuously, frequently on energy produced from fossil fuels.
However, Ethereum shifted to a mechanism called Proof of Stake on September 15 in an event known as The Merge, where the likelihood of issuing a new token no longer depends on the amount of computational labor.
The switch’s technical difficulty was likened to repairing a skyscraper’s foundations while it was still standing.
On the other hand, the peer-reviewed “perspective” article claims that it reduced Ethereum’s electrical energy consumption by at least 99.84%.
The Ethereum network also enables non-fungible tokens and other cryptocurrencies with a value of hundreds of millions of dollars (NFTs).
However, Alex De Vries, a researcher in data science and economics at the Viji Universities Amsterdam in the Netherlands and the author of the article, cautions that the computers may have just shifted to producing other cryptocurrencies.
The White House Office of Science and Technology Policy recommended that regulatory restrictions on highly energy-intensive cryptocurrency mining be taken into account in September 2022.
The Ethereum community has demonstrated that, despite worries and opposition, it is possible to implement the necessary adjustments on a live blockchain, according to Mr. De Vries. This suggests that the Bitcoin community may need a little push from the outside to actually make things happen.
Associate University of Liverpool lecturer Gavin Brown told BBC News: “In the crypto world, sustainability is a crucial issue to overcome. The possibility of new regulations is a key tool for achieving this.”
However, it was in the best interest of Bitcoin and Ethereum supporters to improve their own image in order to draw capital from institutional investors like banks or pension funds.
Many of those funds might wish to invest in cryptocurrencies right now, but they are unable to do so until or unless those currencies become more stable.