Ethereum cryptocurrency to slash carbon emissions

Ethereum cryptocurrency to slash carbon emissions

Ethereum, the second largest cryptocurrency after bitcoin, is just “months” away from shifting its underlying infrastructure to a new model that would slash its carbon emissions a hundredfold, the project has announced.

Since Ethereum also provides the infrastructure for a host of other cryptocurrency-related projects, including many non-fungible token platforms, the change could radically improve the energy efficiency of the sector.

At its heart, the plan involves shifting the way Ethereum’s underlying blockchain works. Currently, Ethereum uses a “proof-of-work” system, like the model used by Bitcoin and most other cryptocurrencies. The security of the system as a whole is guaranteed by a requirement that members burn electricity doing complex but pointless mathematics, in order to ensure that no single user can dominate the system.

When the switch is complete, Ethereum will instead use a model called “proof-of-stake”. Under that approach, rather than handing out internal responsibilities based on how much electricity is burned, the system instead allocates power based on how much Ethereum existing users already hold – requiring them to “stake” a portion of their currency every time they make a decision.

The switch to proof of stake has been planned for several years, with a host of problems, both technical and organisational, delaying implementation. But now, according to Carl Beekhuizen, a research and development staffer at the Ethereum Foundation, which leads development on the cryptocurrency, the change will be complete “in the upcoming months”.

Where the existing Ethereum network uses about 5.13 gigawatts of power – around the consumption of Peru – Beekhuizen estimates the network will drop to just 2.62 megawatts after the switch. “This is not on the scale of countries, provinces, or even cities, but that of a small town (around 2,100 American homes).”

And, Beekhuizen adds, the benefits increase as the value of the cryptocurrency does. “Under PoW [proof-of-work] … as the price increases, in equilibrium so too does the power consumed by the network. Under proof-of-stake, when the price of ETH [Ethereum] increases, the security of the network does too (the value of the ETH at-stake is worth more), but the energy requirements remain unchanged.”

While proof-of-work has lasted more than a decade, it has come under increasing criticism for the extreme resource demands that it imposes on cryptocurrencies. Bitcoin, still the largest cryptocurrency and one with no advanced plans to switch to proof of stake, uses the same amount of power every year as the Netherlands, and has a carbon footprint the size of Portugal’s, according to estimates from Digiconomist.

As well as consuming large amounts of electricity, proof-of-work also creates huge demand for fast computer hardware. That has led to shortages, both at the consumer and industrial levels. Nvidia, which makes graphics cards for PC gamers that can be repurposed into efficient cryptocurrency hardware, has even started to sell special versions of its products that are artificially weakened when it comes to running Ethereum’s software on them,to try to retain some stock for its core market.

Even if Bitcoin doesn’t follow Ethereum and switch away from proof-of-work soon, there may be another solution to the system’s energy usage: bitcoin’s price has tumbled in recent days, and is now 40% off all-time highs, after powerful players including China and Elon Musk signalled their dissatisfaction with the currency.

Ethereum moves to kill graphics card mining ‘in the upcoming months’

It’s not often we dive into updates on specific cryptocurrency algorithms here at PC Gamer, but this one could have a material impact on our humble hobby. While the relationship between Ethereum—the most popular crypto for GPU mining—and PC gaming has been, uh, rocky at the best of times, that could be all about to change.

Ethereum is looking to shift to a proof-of-stake model within months, the Ethereum Foundation has said, and that brings with it some major changes to how the cryptocurrency operates fundamentally.

Today, Ethereum uses proof-of-work to shift transactions and generate new Ether, which is the currency used on the Ethereum network. Proof-of-work requires lots and lots of computational power to operate, much the same way as Bitcoin does, but while Bitcoin is largely powered by application specific integrated circuits (ASICs), Ethereum is powered almost exclusively by graphics cards.

Proof-of-stake will cut the requirement for GPUs. Instead, the very network itself will verify transactions, or blocks, according to their stake in Ethereum. The system remains secure because the wealth of Ether in the world has already been distributed across millions of people.

As a result, Proof-of-stake would cut the requirement for GPU mining, which means less demand for cards and less power sapped from the limited resource that is planet Earth.

“Ethereum will be completing the transition to Proof-of-Stake in the upcoming months,” Carl Beekhuizen, Ethereum Foundation, says in a blog post, “which brings a myriad of improvements that have been theorized for years. But now that the Beacon chain has been running for a few months, we can actually dig into the numbers. One area that we’re excited to explore involves new energy-use estimates, as we end the process of expending a country’s worth of energy on consensus.”

Beacon Chain is the system by which the Ethereum network will manage a proof-of-stake network. It differs from the mainnet blockchain in use today for proof-of-work. Both effectively aim to produce a secure network for verifying Ether transactions, however.

Ethereum has been eyeing up a Proof-of-Stake concept for years now. I remember talking about it during the last great GPU shortage of 2017/2018, but so far nothing truly game changing has come out of it to alter how Ether is mined. Thus, Ethereum has remained a power-sap of gargantuan proportions. Its power demand has been compared to countries, and is only increasing as the price goes ever higher—it makes you realise all your individual efforts recycling and riding a bike to work are nothing in the face of millions of people trying to make a quick buck.

Really depressing stuff.

Proof-of-stack, if successful, would cut Ethereum’s power use by up to 99.95%, the foundation claims.

(Image credit: NiseriN, Getty Images)

But what happens to all the miners when proof-of-stake inevitably happens?

Either miners can pack up shop, sell their GPUs for a quick buck second-hand, and move on with their lives. Or they move to one of the many, many alternative cryptocurrencies out there that are still happily mining away.

There will likely always be cryptocurrencies that use the tried-and-tested proof-of-work approach to get off the ground, which means we’ll never quite be free of the cryptocurrency’s power and hardware requirements entirely.

But these altcoins still have to prove themselves profitable to see the graphics card river run dry, and in that there’s some hope for affordable GPUs sometime in the next few years, even if proof-of-stake may not quite the magic fix-all we’re praying for.

Hope for Prospective GPU Buyers? Ethereum Prepares to Phase Out Mining

(Credit: Pixabay)

If you’re struggling to buy a graphics card, relief may be on the horizon as cryptocurrency Ethereum is preparing to phase out GPU-intensive mining in the coming months.

The news was contained in a blog post from the Ethereum Foundation. For years now, the nonprofit has been working to move Ethereum away from traditional mining to what’s called a “Proof-of-Stake” protocol, which promises to streamline the cryptocurrency.

On Tuesday, the foundation provided an update. “Ethereum will be completing the transition to Proof-of-Stake in the upcoming months, which brings a myriad of improvements that have been theorized for years,” the group wrote.

Ethereum mining has been among the factors blamed for the ongoing GPU shortage. To generate the cryptocurrency, miners have been buying up desktop graphics cards, taking away supplies from consumers. In the meantime, the value of Ethereum has shot up from $700 in December to almost $3,000 now, adding more incentive for people to get into mining.

Credit: Pixabay

The situation is so bad that Nvidia is even installing Ethereum mining-restriction software on its graphics card to discourage miners from hoarding them. However, the cryptocurrency’s coming migration to Proof-of-Stake is expected to kill off the need for powerful GPUs to maintain the Ethereum blockchain. Instead, hardware requirements should dramatically fall, enabling a regular PC to help validate the blockchain.

The blog post from the Ethereum Foundation goes on to say Proof-of-Stake could end up cutting down the cryptocurrency’s electricity usage by 99.95%. The foundation didn’t offer a specific date for when the transition will be completed, but it did say this:

“While Ethereum continues to use PoW (Proof-of-Work) for now, that won’t be the case for much longer. In the past few weeks, we have seen the emergence of the first testnets for The Merge, the name given to the moment Ethereum switches to from PoW to PoS. Several teams of engineers are working overtime to ensure that The Merge arrives as soon as possible, and without compromising on safety.”

In the meantime, Ethereum miners can continue to generate the cryptocurrency using their GPUs. But once Proof-of-Stake kicks in, many PC users are hoping miners will quit the market and begin reselling their graphics cards on third-party marketplaces. Others say don’t get your hopes up—the mining community might simply migrate to another cryptocurrency.