Why crypto's big 'merge' is causing big headaches
The biggest software upgrade in the short history of crypto has fulfilled its promise to wipe out more than 99 percent of the electricity used by the second-biggest cryptocurrency, experts have told AFP.
That is no mean feat, given that the Ethereum blockchain was burning through about as much electricity as New Zealand.
Sceptics had expected glitches with the upgrade, known as "the merge", but it ended up being a "rather boring event", according to Alex de Vries of the Free University in Amsterdam.
De Vries, whose Digiconomist website models the energy use of Bitcoin and Ethereum, said consumption had indeed plummeted by more than 99 percent on Ethereum.
Moritz Platt, a researcher specialising in crypto at King's College London, said the 99 percent estimates were realistic and heralded a positive step towards "cryptocurrency sustainability".
So the Ethereum blockchain, which supports billions of dollars of trading in games, tokens, art and the ether currency, has cleaned up its act.
But there are complications.
Ethereum faces bitter opposition from those who lost out from the merge and it could also get greater scrutiny from regulators.
- 'Astronomical' growth -
The old system, known as "proof of work", relied on people and firms to "mine" new coins -- an industry worth $22 million daily before the merge, according to de Vries.
The miners used vast power-guzzling computer rigs to compete with each other to solve complex equations, and the winner was awarded the prize of adding entries to the blockchain and generating coins.
The merge wiped out their business model overnight.
"Those rigs do not magically turn back into invested capital," said a crypto-miner known only as "J" who operates between Singapore and Hong Kong.
He said it
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