This week, the second largest cryptocurrency, ethereum, is set to transition to a new mining process that will no longer rely on warehouses of energy-hogging GPUs. This process will consume 99.95% less energy than before, according to etherium.org (opens in new tab), a website funded by the Ethereum Foundation.
The Merge (opens in new tab) has been a long time coming (opens in new tab)for the ethereum blockchain, and Google now has a countdown (opens in new tab) leading up to the event when you search for 'ethereum merge.' The count is set for less than three days; if everything goes according to plan, this could have a seismic effect on the world of cryptocurrency mining and its environmental impact.
The countdown displays the current difficulty, hash rate, and Merge difficulty. The switch will occur when the current difficulty reaches the Merge difficulty of 58750000 P, which will happen on Thursday at the current rate.
When complete, the process will move the ETH blockchain from proof-of-work (PoW) to proof-of-stake (PoS). Instead of using power-hungry GPUs to verify transactions on the blockchain, it'll use consensus from those with a substantial amount of ETH, aka those with a "stake" in the network.
According to Digieconomist, ethereum consumes an estimated 83.80 TWh per year—about as much power as Finland uses—under its current system. That number has climbed in recent months after a massive drop off in June. It should see a massive drop following the transition to PoS.
The largest cryptocurrency, bitcoin, currently has an estimated energy consumption of 128.31 TWh per year according to Digieconomist (opens in new tab). That represents an all-time low for 2022, but still about as much power as Norway uses. Bitcoin is still a PoW cryptocurrency, and there are no plans for it to switch to PoS like ethereum.
What does this mean for large ethereum mining operations? We could see a flood of second-hand GPUs hitting the market soon, although we still advise against buying (opens in new tab) them. Some miners will move over to a different coin to mine, like bitcoin, but that would require a whole new investment in custom-made ASICs mining rigs.
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