The co-founder and inventor of the Ethereum blockchain tweeted on Thursday that the Software for the Ethereum blockchain has been overhauled, drastically reducing its energy usage.
The Ethereum Foundation estimates that the new system will use 99.95% less energy than the old one. The improvement is seen by supporters of Ethereum as a significant benefit as it competes with competitor blockchain Bitcoin.
The majority of blockchains use a lot of energy and have drawn criticism from investors and environmentalists. According to researcher Digiconomist, before the software update known as the Merge, a single Ethereum transaction consumed as much energy as the typical American household consumes in a week.
The redesign has altered how Ether tokens, the second-largest cryptocurrency behind Bitcoin, are created as well as how transactions on the Ethereum network take place.
Ethereum has switched from a "proof of work" system, in which power-hungry computers validate transactions by solving difficult mathematical puzzles, to a "proof of stake" system, in which people and organisations act as validators and use their ether as collateral in exchange for winning newly created tokens.
Vitalik Buterin, an inventor, wished everyone a "happy merge" in a tweet. "The Ethereum ecosystem is at a pivotal point at this time."
In spite of the development, the cryptocurrency Etherum was little changed at USD 1,633 during morning session.
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Ethereum blockchain to undergo significant upgrade to reduce energy utility