After years of delays, the long-awaited ‘Merge’ - the software upgrade to Ethereum, the most popular cryptocurrency platform - is finally complete, making the system much more energy efficient.
The upgrade brings Ether, the platform's key cryptocurrency and the second most valuable cryptocurrency, into a new era. It enters a context where computers no longer 'burn energy' to verify transactions, and moves from 'proof-of-work' to 'proof-of-stake'.
“The metaphor I use is this idea of switching out an engine from a running car,” said Justin Drake, a researcher at the non-profit Ethereum Foundation. “I like to think of it as kind of like the switch from gasoline to electric.”
Instead of mining with computers, as has been done up until now, rushing to solve complex puzzles in order to verify cryptocurrency transactions; investors will deposit a certain number of digital currencies at a common point and enter a lottery.
Every time a transaction is made, one of the participants will be drawn to verify the transaction and receive the winnings.
The effects of the upgrade can be huge, since Ethereum is now going to consume about 99.9% less energy.
In fact, according to one estimate, the change is like turning off the electricity grid for the whole of Finland.
The upgrade has been debated for eight years, causing sharp disagreement amongst industry players with some arguing it is necessary and should have been done long ago, and others stressing it is extremely risky and leaves the system vulnerable to attack.
Investors are Unmoved
In any case, the long-awaited upgrade does not seem to have affected investors much, since so far the cryptocurrency market is showing gains, but certainly not impressive ones.
According to data from CoinMarketCap, the market valuation stands at $997.54 billion, registering an increase of 0.22% in the last twenty-four hours.
As of at around 11am Greek time yesterday, Ether in particular, registers gains of 2.17% and moves around 1.636 dollars.