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Ethereum Crypto Review Blockchain Technology

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Ethereum Crypto Review Blockchain Technology

LONDON: Ethereum, the world’s second-largest cryptocurrency after bitcoin, will soon overhaul its blockchain technology to limit the network’s much-criticized environmental impact.

Ethereum, whose digital unit ether fell in a crypto crash earlier this year, will undergo a major technical revolution in September.

So what is the backdrop for the impending reset – known as Merge – and how will it calm prices and reduce electricity consumption?

Bitcoin, Ethereum and other such currencies are “mined” by solving complex puzzles using powerful computers that consume huge amounts of energy in vast warehouses, often near sources cheap electricity.

A blockchain is the decentralized and secure ledger to record these transactions, which occur when encrypted codes are transmitted over a computer network.

Users validate their success via a so-called “proof of work” mechanism that rewards them with cyber-currency – but only after proving their participation in such energy-intensive mining.

The lucrative crypto industry is worth an estimated US$1 trillion (RM4.46 trillion), despite collapsing in the first half of 2022.

However, Ethereum is still down 55% in value so far this year.

Ethereum is nevertheless considered vital because it is where most virtual assets, including non-fungible tokens that are making headlines, are bought and sold.

This is partly because users can create “smart contracts” or algorithmic computer code, which perform custom transactions for different functions.

The widespread adoption of Ethereum makes it even more important to address environmental concerns and change course, as these concerns had triggered a partial boycott. “Proof-of-work mining is environmentally destructive, expensive and inefficient,” summarized digital currency specialist Eswar Prasad, a professor at Cornell University. —AFP

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