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 Is Up 24% in a Month. Is It a Good Investment?

It’s impossible to navigate the investing world these days without coming across cryptocurrency in some way. It’s everywhere – on your trading platform, on your social media feeds, and even your favorite cable financial news channel. Arguably the second-most-discussed digital asset is Ethereum (CRYPTO:ETH), which has grabbed headlines recently for its performance compared to Bitcoin, its gorilla-sized big brother.

It’s up roughly 24% in the past month alone, whereas Bitcoin is down about 29% over the same period. Ethereum is well off its highs, though, so let’s see if now is the time to make an investment.

More than just currency

While most cryptocurrencies are known to function exactly as described – as currencies – Ethereum is a little different. It’s a large platform ecosystem hosting an almost alternative economy, filled with different digital functions redesigning the way we do business. Its community of programmers are constantly developing new uses for the underlying technology, with a growing number of businesses using it as a foundation.

Take non-fungible tokens (NFTs), for example. This is another term making the rounds right now, made famous by a recent digital artwork sale of $69 million. It was paid for in Ether – the legacy cryptocurrency powering the Ethereum platform – of course. A buyer in Singapore made the transaction through auction giant Christie’s, which helped this new world get endless mainstream media attention.

The Ethereum platform has made technologies like NFTs possible, as its blockchain (the ledger tracking all transactions) has improved materially over Bitcoin’s, introducing new functions. The “smart contract” capability on Ethereum allows the owners of valuable intellectual property – like music or art, for example – to directly sell their work and earn royalties on each further sale from there on. This digital concept has the power to stifle some of the big headwinds that have hurt the creative industries for decades, including piracy and theft.

Extreme volatility

The regular, major swings in value for cryptocurrencies are a hurdle to wider adoption. Some investors consider crypto as a store of value, like gold, but others genuinely view them as a replacement for real money. The problem with both uses is that consumers are unlikely to hold an asset that so rapidly changes in value – both up and down.

In the last 30 days alone, Ethereum has swung from $2,200 to $4,300, and back down to $2,900 – which makes it really hard to rely on as an anchor for an individual’s financial stability.

It’s also making it hard for professional investors to see the investment thesis. In a recent Bank of America survey, 74% of the 200 respondents said Bitcoin was a bubble, and voted it the second-most crowded trade behind technology stocks. It’s a possible hint that all of the people who want to own these assets already do, and therefore prices might start to fall. The survey seems small, but those 200 respondents manage over $500 billion in assets. If you consider Ethereum to be in the same league as Bitcoin, perhaps this doesn’t bode well.

What the future holds

It’s possible that volatility cools off as crypto becomes more accepted, and it’s clear Ethereum is here to stay. There are now multiple online art marketplaces that allow users to exchange NFTs for different creative works, in addition to lending and investment services all driven by Ethereum.

Ethereum has a total market value of about $330 billion at Wednesday’s prices, compared to $775 billion for Bitcoin. However, it’s clear the former has more potential beyond just a vehicle for transactions and price appreciation. Even to date, while still in its infancy, the platform has delivered potentially game-changing advancements to solve problems across different industries, and it appears all that’s left is adoption.

While Ethereum is up 24% over the last month, it’s down about 34% from its highs, which could represent opportunity for those investors who believe in its future.

Cryptocurrency prices today: Bitcoin recovers slightly after crash, Ethereum down over 13%

The cryptocurrency market has been hit by a storm with all popular virtual currencies trading way below their prices on Wednesday morning. The value of most cryptocurrencies in existence nosedived sharply on Wednesday after China’s crackdown on virtual coins.

The value of Bitcoin, Ethereum, Ripple, Cardano, Litecoin and even Dogecoin plummeted yesterday, according to data on cryptocurrency exchanges. The rout has made most crypto investors nervous, while others were planning to “buy the dip”, expressing their interest in increasing their holding when prices are low.

Crypto Highlights: Check Wednesday’s prices

The fall in cryptocurrencies was so severe that it affected the US stock market trade for a short while. Many analysts said that this could be the start of another period of uncertainty for cryptocurrencies.

MARGINAL RECOVERY

Despite the gloom, there is good news for investors. Cryptocurrencies prices have recovered marginally after plunging sharply on Wednesday.

But volatility remains high and cryptocurrencies continue to be under extreme pressure as spooked investors continue to offload their holdings.

Here are the latest prices and trends of popular cryptocurrencies:

Cryptocurrency Price (US Dollar) 24-hour change Market cap (Billion) Volume (24 Hours) Bitcoin 39,715.05 -0.98% $743.22 $150.50 billion Ethereum 2,578.29 -13.59% $299.42 $127.96 billion Dogecoin 0.353571 -13.88% $45.80 $16.44 billion Litecoin 202.97 -23.09% $13.74 $15.19 billion XRP (Ripple) 1.15 -18.75% $114.94 $18.92 billion Cardano 1.58 -5.56% $50.75 $15.89 billion

Bitcoin, which plunged sharply over 14 per cent, has gone up above $39,400 on Thursday at around 9:40 am. Bitcoin was down nearly 3 per cent compared to its value in the last 24 hours.

Ethereum (Ether) seems to have suffered massively due to the crash. It is now trading at just above $2,500. It is down by over 13 per cent in contrast to its value in the last 24 hours. However, Ethereum also seems to be paring losses it had suffered during Wednesday’s rout.

CRYPTO VOLATILITY REMAINS HIGH

On Wednesday, the declines in Bitcoin and Ethereum were their biggest daily percentage moves in more than a year.

It may be noted that Bitcoin had been under pressure for more than a week, triggered by a series of tweets by Tesla CEO Elon Musk who has been a major supporter of the virtual coin.

Chris Weston, head of research at brokerage firm Pepperstone in Melbourne, told Reuters that $9.13 billion of cryptocurrency positions has been liquidated across exchanges in the last 24 hours. He also pointed out that $532 billion in total volume has been transacted.

Regarding the slight rebound seen today, Weston seemed uncertain. “It’s too early to say if the rebound we’ve seen off the lows in crypto has legs, but as we roll into Asian trade, I question if we will get a chance to catch our breath or is there more volatility in store?” he said.

Bitcoin is likely to fall further and stabilise around $30,000, according to many analysts. This, however, would be a big loss to investors who have brought the cryptocurrency at higher prices.

The fall in Bitcoin prices is likely to have a broad-based impact on other smaller cryptocurrencies that could also face value erosion.

(DISCLAIMER: The cryptocurrency prices have been updated as of 10:00 am and will change as the day progresses. The list is intended to give a rough idea about popular cryptocurrency trends and will be updated on a daily basis.)