Vitalik Buterin, the creator of Ethereum, has confirmed that the cryptocurrency will undergo a complete overhaul this year, reducing energy consumption by nearly 99 percent and making Ethereum 2.0 more environmentally friendly than Bitcoin.
“I’m definitely very happy that one of the biggest problems of blockchain will go away when proof of stake is complete,” Buterin said.
There are significant concerns about the amount of energy consumed by cryptocurrencies. Elon Musk and Bill Gates have previously warned about it, and on Wednesday, Iran banned the mining of cryptocurrencies such as Bitcoin for nearly 4 months after the country experienced frequent blackouts. If the concerns persist, changes will be formed around these popular digital coins, with Ethereum being the first to act.
Buterin intends to accomplish this by transitioning Ethereum from the current Proof Of Work (PoW) system to a Proof Of Stake (PoS) system. He stated that the step has become critical due to the growth of cryptocurrency and Ethereum in recent years. Most cryptocurrencies had been on an upward trend for the previous 12 months before experiencing a significant drop in mid-May.
The system change is expected to lower the cost of purchasing and operating powerful computing systems. The Ethereum 2.0 upgrade is divided into three stages. The Beacon Chain, The Merge, and the third stage, which will introduce sharding. The first stage is already operational and entails ETH staking to enable validator software. The migration of the current system to the new system will be the second stage. It is expected to be completed by the end of the year.
The third stage will introduce the sharding process, which will divide the database horizontally and distribute it across the network to reduce network load. It is scheduled to begin next year. “With shard chains, validators only need to store/run data for the shard they are validating, rather than the entire network.”