Ethereum is one of the most famous cryptocurrencies, together with Bitcoin, one of the best-known cryptocurrencies, and has just opened a page in its history that could be decisive. It has undergone a process called the fusion (the merger) called to become the great transformation, a profound change in philosophy. And with significant energy savings.
The reduction in energy consumption in transactions with Ethereum would reach 99.95%
This new model seeks greater efficiency and, above all, huge savings as it entails a substantial reduction in energy costs associated with the mining process (generation of cryptocurrencies), something that will no longer be produced as it was until now.
Until now, operations have been based on a mechanism that has been tested since 2016. Called this ‘classic’ consensus mechanism Proof of Work (PoW, proof of work) gives way to a new model called Proof-of-Stake (PoS, Proof of Stake). The PoW is based on powerful sets of computers owned by individuals and mining entities that: compete with each other to solve complex math problems allowing them to agree on operations that are added to the chain of blocks (Blockchain) that confirm transactions. In return, fractions of the respective cryptocurrency unit are received.
The problem with this method is that: requires large amounts of energy, so it has become expensive and inefficient over time. Abandon the PoW model in favor of PoS would reduce energy consumption by up to 99.95% needed to validate the operations. How? Swap competition for consensus.
Instead of farms of powerful teams using resources that compete with each other, transactions are validated based on the consensus of the users participating in the system, with a system proportional to the number of cryptocurrencies they process. A model that is not without a doubt.
An additional consequence of this model change would be the decrease in demand for graphics accelerator cards, which are most commonly used in mining activities due to their strength, which has caused their prices to rise and even led to a shortage of inventories of this component. The big beneficiaries would be the gamers, who would experience a drop in the price of GPUs for your equipment, both PCs and home video game consoles.
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