Baystreet Staff
Ethereum’s (ETH) transition to a more energy efficient proof-of-stake protocol has begun as planned.
The weeks-long transition from a proof-of-work to a proof-of-stake protocol, known in cryptocurrency circles as “the merge,” began on September 6 and is expected to be completed by month’s end.
The transformation of Ethereum, which is the world’s second largest cryptocurrency with a market capitalization of $200 billion U.S., promises to deliver huge energy efficiencies and make the digital coin more cost-effective, especially compared to Bitcoin (BTC).
However, the transition is complex, and any errors encountered during the merge process could send shockwaves across the global cryptocurrency market that is already suffering through a steep downturn this year.
The price of Ethereum rose nearly 100% between June and the end of August in anticipation of the switch to a proof-of-stake protocol but has declined about 5% in the last 24 hours as the merge got underway.
A proof-of-stake operating model is expected to consumer 99.9% less energy than the current proof-of-work protocol.
To give an idea of the energy consumed from mining cryptocurrencies, consider that Bitcoin mining consumed over 380 terawatt-hours of electricity in the last year, which was more electricity than the United Kingdom used during the same period of time.
The price of Ethereum is down 60% year-to-date at $1,510 U.S. per coin.
