Ethereum founder, Vitalik Buterin
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The World’s Second Biggest Cryptocurrency Just Got a Lot Greener

Ethereum, the world’s second most valuable cryptocurrency, has completed a massive software upgrade that its backers claim will slash its carbon footprint.

The long-awaited revamp, which is known as “The Merge,” will reduce ethereum’s energy consumption by nearly 99.95%, according to the Ethereum Foundation, a nonprofit organization dedicated to supporting the cryptocurrency and its related technologies.

“The Merge refers to the original Ethereum Mainnet merging with a separate … blockchain called the Beacon Chain,” it added.

Until now, both ethereum and bitcoin were running on a mechanism called “proof-of-work,” under which high-powered computers were required to solve complex puzzles. The merger moves ethereum to a mechanism called “proof-of-stake,” which is much more energy efficient, as it does away with the need to have computers compete against each other. Instead, users deposit their ether to participate in the race for more currency.

With this switch, ethereum hopes that it “will improve security, reduce energy consumption, increase the number of users on the network, and grow its market cap,” Deutsche Bank research analyst Marion Laboure wrote in a note this week.

“Happy merge all,” Vitalik Buterin, the 28-year-old Russian-Canadian programmer who helped create Ethereum said on Twitter. “This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today,” he added.

The co-founder said that the upgrade will “reduce worldwide electricity consumption by 0.2%.”

While cryptocurrencies have seen a phenomenal rise in the last few years, observers say they’re terrible for the environment. According to Digiconomist, a platform that tracks crypto energy usage, a single Ethereum transaction is equivalent to the weekly power consumption of an average US household.

This article was originally published by CNN Business.

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