Ethereum Blockchain Will Be Majorly Upgraded to Reduce Energy Consumption 

A long-awaited software upgrade to the Ethereum blockchain aimed at reducing its massive energy consumption is expected this week, with supporters claiming that the move will broaden the technology’s use. 

The “Merge” upgrade will significantly alter how transactions on the Ethereum blockchain and ether tokens are created. According to the Ethereum Foundation, the network’s spokesperson, the new system will consume 99.95% less energy. 

The exact timing of the Merge is unknown, but Google and other blockchain-tracking websites predicted it would happen in the early hours of Thursday on Monday. The Ethereum Foundation has announced that it will take place from September 10 to September 20.   

If Ethereum is successful, it will transition from a “proof of work” system, in which energy-hungry computers validate transactions by solving complex mathematical problems, to a “proof of stake” protocol, in which individuals and businesses act as validators, using their ether as collateral, in order to win new tokens. According to Coin Metrics data, there are approximately 1 million to 1.5 million transactions per day on the Ethereum blockchain, compared to 200,000 to 300,000 on the Bitcoin blockchain. 

Cryptocurrency prices fell earlier this year as a broader financial market downturn prompted investors to sell risky assets. Ether has risen roughly 65% since the end of June in anticipation of the Merge, while bitcoin has seen little movement. 

“This is a very significant development in Ethereum’s overall evolution plan,” said James Malcolm, head of FX strategy at UBS. Still, he claims that the Merge has already been factored into the price of ether. 

According to data site Coin Gecko, Ether is the second-largest cryptocurrency after bitcoin, with a market capitalization of around $200 billion. According to Coin Metrics data, there are approximately 1 million to 1.5 million transactions per day on the Ethereum blockchain, compared to 200,000 to 300,000 on the Bitcoin blockchain. 

Cryptocurrency prices fell earlier this year as a broader financial market downturn prompted investors to sell risky assets. Ether has risen roughly 65% since the end of June in anticipation of the Merge, while bitcoin has seen little movement. 

“This is a very significant development in Ethereum’s overall evolution plan,” said James Malcolm, head of FX strategy at UBS. Still, he claims that the Merge has already been factored into the price of ether. 

Nonetheless, ether has seen limited mainstream adoption as a means of payment, with trading being by far the most popular application.