In the coming months, Ethereum will complete its transition to Proof-of-Stake, or stacking, instead of the Proof-of-work or mining method previously used, which required video cards and miners.
The Ethereum Foundation stated in its official blog that after switching from mining to stacking, the energy consumption of all operations performed on the blockchain will drop by 99%.
What is the difference between mining and stacking?
Mining is the process of securing a blockchain on a Proof of Work (PoW) algorithm. Such blockchains are Bitcoin, Ethereum, Dogecoin, and many other systems. In mining, the network is maintained using the processing power of video cards, and holders of such systems are rewarded for each transaction made.
The highest bounty will go to the miner with the highest processing power, leading to an arms race, high power consumption, and a shortage of new video cards on the market.
The stacking or Proof-of-Stake model depends on the number of cryptocurrency coins in the user’s special account and, unlike mining, does not require large computing power. Users are remunerated in proportion to the share of the cryptocurrency coins belonging to that participant from the total number of coins.
Digiconomist estimates that Ethereum miners now consume about 44.49 TWh of energy per year, or about 5.13 gigawatts per hour constantly. The Ethereum Foundation said in its official blog that after the transition from mining to stacking, the energy consumption of all blockchain operations will drop 99%.
Ethereum used to consume approximately 84,000 Wh per transaction when using mining, but now with PoS, it could drop to about 35 Wh.
The transition will likely not affect the shortage of graphics cards !
What’s interesting – just a day before the Ethereum Foundation announced the move to Proof-of-Stake, NVIDIA announced that it was limiting the ability to mine Ethereum cryptocurrency on its new GeForce RTX 3080, RTX 3070, and RTX 3060 Ti graphics cards.
But most likely, neither NVIDIA’s restriction nor Ethereum’s move to the new model will affect the shortage of video cards. After all, most cryptocurrencies still use the Proof-of-work method and miners only need to switch to mining another cryptocurrency.
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