Revolution in sight for Ethereum and the world of cryptocurrencies: the second most important “blockchain”, after Bitcoin, will disrupt its way of operating this week, to become less energy-intensive in a context of rapid growth.
A risky operation that must take place by Thursday and that some compare to replacing a diesel engine with an electric motor… on a moving vehicle.
Concretely, it is one of the pillars of this (“blockchain”) “chain of blocks” – the technology that serves in particular to support cryptocurrencies – which will be modified. Since it operates without a central authority, it is therefore up to some of its users to validate the transactions that take place there, such as NFT exchanges.
So far, to belong to this circle of “validators”, it is necessary to solve a very complex calculation that requires a great deal of computing power. The exercise, called “Proof of Work” in English, consumes a large amount of electricity and the idea is therefore to find a greener alternative.
From now on it will therefore be necessary to place a bet of 32 Ether (the cryptocurrency associated with Ethereum, or about 50,000 euros) to be able to validate on the “blockchain”, this sum can be seized in case of misconduct, a method called “Proof of Stake “(” Proof of Stake “in French).
To carry out this step, an update of the main network of the “blockchain”, nicknamed “The Merge”, must take place between Tuesday and Thursday, with various precautions taken. Major trading platforms like Binance or Coinbase, for example, have plans to briefly freeze Ether trading.
If the deal succeeds, we could reduce Ethereum’s electricity consumption by “99%”, estimates AFP Lennart Ante, a researcher at the “Blockchain” research lab. There will be “no more infrastructure, just software”, he points out.
– First stage –
Today, this “chain of blocks” consumes around 45 TWh of electricity per year, or around 10% of France’s annual electricity consumption.
This carbon footprint is currently pushing some artists and industrialists to boycott it, but the success of the transition “could, over time, increase the acceptability of Ethereum and all applications built on the + blockchain +, by policymakers and regulators,” he anticipates. Dutch bank-insurer ING in a recent note.
“This could therefore stimulate the willingness of financial institutions to develop Ethereum-based services,” he continues.
Other experts qualify this opinion and instead point out the “fundamental problems” that remain in the world of cryptocurrencies.
Lack of traceability of asset holders, virtual wallet management and governance opacity are all major obstacles to seeing these systems find their place in the real economy, explains Stéphane Reverre, co-founder of the cryptocurrency research firm. by Sun Zu Lab.
In any case, the transition from one system to another, unprecedented on this scale, is an ambitious, if not risky operation, you recognize the developers who have been preparing for it since the end of 2020.
“We are literally changing a complete protocol while continuing to run an economy with it. It may sound scary,” admitted Sajida Zouarhi, “blockchain architect,” at a conference in Paris.
And this operation is only the first step of a “long and complicated transition to make Ethereum a much more powerful and robust system”, capable of processing more transactions, proposes the founder of this blockchain, the Russian-Canadian computer scientist Vitalik Buterin.
Investors, in any case, have so far welcomed the project: the price of Ether is resisting better than that of Bitcoin to the shock that has been shaking the cryptocurrency market for some time.
jub-js / mch / eb