Ethereum is huge. With a market capitalization of over $ 378 billion, it is second only to Bitcoin with a market capitalization of $ 84.7 billion. It is also the leading blockchain for NFTs and decentralized finance (DeFi) spaces.
Proponents market crypto as a viable alternative to traditional financial systems because it is highly transparent, secure, easily accessible, and guarantees anonymity.
However, both of these blockchain flag bearers, Bitcoin and Ethereum, use Proof of Work, raising questions about the sustainability and scalability of future cryptocurrencies.
Here are some amazing numbers:
Currently Ethereum Estimated It uses about 112 terawatt hours of electricity annually. This is comparable to the electricity in the Netherlands and more than the electricity used by the Philippines and Pakistan.
A single transaction on Ethereum is equivalent to the average US home power consumption for nine days.
Also a single Ethereum transaction equal Energy consumption of over 1,50,000 Visa card transactions.
Ethereum’s annual carbon dioxide emissions are comparable to those of Switzerland, equivalent to 327,642 Visa transactions or 24,638 hours of YouTube viewing carbon dioxide emissions daily.
Bitcoin is worse. It consumes about 137 terawatt hours of electricity annually.
When China banned cryptocurrencies last year, it said it was particularly concerned about its use for fraud and money laundering, as well as the impact of crypto mining on the environment.
However, the move to Ethereum’s Proof of Stakes is expected to put an end to crypto mining on the blockchain and reduce energy consumption by as much as 99.95 percent.
The 99% reduction in energy consumption by the second largest cryptocurrency and the largest players in NFTs and DeFi will certainly give a more optimistic reassessment of the environmental costs of cryptocurrencies and their feasibility as a global financial system. I guarantee.
Once profitable ETH mining is complete, those who are currently mining ETH will need to either move to another PoW coin or sell their graphics card and use that money for betting.
This could lead to a very necessary reduction in GPU prices, which has skyrocketed since last year due to a global chip shortage.
There is another possibility on the horizon. Since August 2021, Ethereum has burned (destroyed) $ 5.8 billion worth of ETH, leading to increased value, according to the data dashboard WatchtheBurn.
After the upgrade, the amount of ETH issued is expected to decrease significantly, becoming a deflationary asset, limiting supply over time and potentially increasing in value like Bitcoin.
It could pave the way for Ethereum to steal the Bitcoin crown and become the most valuable currency-an event called “flipping”.