Ethereum co-founder believes the main cryptocurrency needs to reduce the carbon footprint of miners.
Ethereum co-founder Vitalik Buterin named a way to solve the environmental problems of bitcoin during a speech at the StartmeupHK virtual festival in Hong Kong, writes Fortune . According to the developer, the main cryptocurrency, like Ethereum, needs to go to the Proof-of-Stake (PoS) consensus.
The transition of Ethereum to PoS will reduce the carbon footprint that appears as a result of mining, Buterin said. Ethereum’s transition to PoS, as previously reported, should happen before the end of the year.
“Proof-of-Stake is a solution to the environmental problems of bitcoin, which requires much less resources to maintain,” added the co-founder of Ethereum.
Bitcoin is now working on a Proof-of-Work (PoW) consensus. This algorithm is used to confirm transactions and create new blocks. With the help of PoW, miners compete with each other to confirm transactions on the network, receiving a reward for this.
Buterin has already said that Bitcoin may give way to Ethereum. In his opinion, the main cryptocurrency needs to improve the technological base to improve energy efficiency.
For its low energy efficiency and environmental friendliness, bitcoin was criticized by Tesla CEO Elon Musk. For the same reason, his company temporarily refused to sell electric vehicles for cryptocurrency. Musk also called the insane level of electricity consumption by bitcoin.
Ethereum’s transition to the Proof-of-Stake consensus will take place when the blockchain is updated to version 2.0. The essence of PoS is that the operation of the network is provided by the owners of digital coins, not miners, so the algorithm does not require large computing power. The owners of tokens receive a reward for maintaining the network. This process is called staking.
