Ethereum’s founder Vitalik Buterin believes that the shift to a Proof-Of-Stake (PoS) mining model would greatly reduce the cryptocurrency’s carbon footprint.
What Happened: Proof-of-stake is a solution to the [environmental issues] of Bitcoin—which needs far less resources to maintain,” Fortune reported Buterin saying at the StartmeupHK virtual festival in Hong Kong.
“This thing we’re building isn’t just a game anymore. It’s a significant part of a new era,” he said.
See also: How to Buy Ethereum (ETH)
Highlighting that Proof-Of-Stake operates under a “fundamentally different principle” than Proof-Of-Work (PoW), which is the mining mechanism currently used to mine both Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), Buterin believes that Ethereum’s energy consumption could be reduced by a factor of 100 or even 10,000.
Why It Matters: According to a recent blog from the Ethereum foundation, under PoW, the price of ETH and the hashrate are positively correlated.
Therefore, as the price increases, in equilibrium, so does the power consumed by the network.
However, this is expected to change in the near future as Ethereum has already begun transitioning towards becoming a Proof-Of-Stake network.
See also: Ethereum Co-Founder Vitalik Buterin Says Cryptocurrencies Are In A ‘Bubble’
The past few weeks have reportedly seen the first testnets for “The Merge” come to light, which is the name given to the moment Ethereum switches from PoW to PoS.
“Scaling solutions (such as rollups and sharding) will help further decrease the energy consumed per transaction by leveraging economies of scale,” said Ethereum developer Carl Beekhuizen.
“Ethereum’s power-hungry days are numbered, and I hope that’s true for the rest of the industry too.”
Image: John Phillips on Wikimedia Commons