The second-most valued cryptocurrency in the world, Ethereum, has finished a significant software upgrade that, according to its proponents, will reduce its carbon impact.
According to the Ethereum Foundation, a nonprofit devoted to promoting cryptocurrency and related technologies, the long-awaited update, dubbed “The Merge,” will lower ethereum’s energy use by approximately 99.95%.
With this switch, ethereum hopes that it “will improve security, reduce energy consumption, increase the number of users on the network, and grow its market cap,” Deutsche Bank research analyst Marion Laboure wrote in a note this week.
“Happy merge all,” Vitalik Buterin, the 28-year-old Russian-Canadian programmer who helped create Ethereum said on Twitter.
This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today, he added
The improvement will lower worldwide electricity use by 0.2%, according to the co-founder.
Despite the amazing growth of cryptocurrencies in recent years, environmentalists claim that they are bad for the environment. A typical US household uses around the same amount of electricity each week as one Ethereum transaction, according to Digiconomist, a company that monitors cryptocurrency energy usage.
The electricity saved as a result of the improvement would likely be similar to the electrical energy consumption of a country like Portugal, according to a report from Digiconomist earlier this month. It could also become the “final nail in the coffin” for bitcoin’s transaction mechanism.
Ethereum fell 0.7% in value following the news, trading at $1,592.78, although analysts believe the update will have a significant long-term influence on the cryptocurrency market. According to CoinDesk, the price of bitcoin, the cryptocurrency with the highest market capitalization, dropped by roughly 1% to $20,174.
