With the growing popularity of Bitcoin in 2013 Vitalik Buterin proposed a different type of blockchain, which could be used for more than transferring cryptocurrency (Solomon, 2019).
Released in 2015, Ethereum is a blockchain which embeds a virtual machine inside of it. This computer is programable and can be used to create smart contracts and deploy decentralised applications (ethereum.org, 2023a).
Reduced environmental impact: Ethereum’s proof-of-stake adaptation
According to ethereum.org (2023b), due to the environmental impacts of Proof of Work based blockchains, Ethereum changed from Proof of Work to Proof of Stake on September 15, 2022 in an event known as “The Merge”. By switching to a Proof of Stake based blockchain, Ethereum reduced their energy consumption by approximately 99.95%.
The Merge combined the existing Proof of Work based Ethereum blockchain with the ‘Beacon Chain’ a Proof of Work blockchain.
This switch to Proof of Stake based consensus meant a complete shift in how the blockchain operates, with validators now ‘staking’ their cryptocurrency to authorise blocks being added to the chain. Any validators found trying to make invalid changes would be penalised, losing some or all their stake and eventually being banned from validating further blocks (Frankenfield, 2019).
By removing the need for mining, Ethereum solved the environmental impact issues that it previously faced. Previously the network used as much power as the nation of Switzerland, while so called Ethereum 2.0 uses less power than the Eiffel Tower’s annual running costs (Allison, 2023).
This blog post was originally written as part of a project for the BSc (Hons) Cybersecurity with The Open Univeristy by Jonathan Brogan and is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
References
Allison, I. (2023) Ethereum’s Lifetime Energy Use Before the Merge Equaled Switzerland’s for a Year, coindesk.com. Available at: https://www.coindesk.com/tech/2023/04/26/ethereums-lifetime-energy-use-before-the-merge-equaled-switzerlands-for-a-year/ (Accessed: 29 May 2023).
ethereum.org (2023a) What is Ethereum?, ethereum.org. Available at: https://ethereum.org/en/what-is-ethereum/ (Accessed: 29 May 2023).
ethereum.org (2023b) The Merge, ethereum.org. Available at: https://ethereum.org/en/roadmap/merge/ (Accessed: 29 May 2023).
Frankenfield, J. (2019) Proof of Stake (PoS), Investopedia. Available at: https://www.investopedia.com/terms/p/proof-stake-pos.asp (Accessed: 29 May 2023).
Solomon, M.G. (2019) Ethereum for Dummies. Wiley & Sons Canada, Limited, John. Available at: https://learning-oreilly-com.libezproxy.open.ac.uk/library/view/ethereum-for-dummies/9781119474128/ (Accessed: 29 May 2023).
