The Founder, Ethereum, Vitalik Buterin, has proposed that transitioning to the Proof-of-Stake model could be a feasible solution to cryptocurrencies’ high-energy consumption issue.
Crypto mining has been criticised lately due to its perceived high fossil fuel usage.
Buterin’s statement about the POS model is coming at a time when Bitcoin mining has been receiving a lot of criticisms.
The Ethereum Foundation had, last month, revealed its impending transition to the POS system, with the final switch expected to be completed by the end of the year.
It stated recently on its website that the success of the POS transition can reduce Ethereum’s energy consumption by 99.8 per cent, adding that a POS Ethereum consumes about 2.62 megawatts.
The environmental implication supposedly led Iran to temporarily ban crypto mining earlier this week, citing the need to preserve the increasingly scarce energy supply in the country.
It had also influenced the decision of the Founder and Chief Executive Officer of Tesla, Elon Musk, to suspend the acceptance of cryptocurrency for payments for its company’s products, as Financial Street reported earlier.
Bitcoin involves data ‘mining’ to solve complex mathematical puzzles, an activity, which is said to be energy sapping and heavily reliant on electricity generated by fossil fuels, notably coal.
Experts are however divided over the issue, with some backing it, while others oppose it.
Financial Street also recalled that the Central Bank of Nigeria, earlier in February, banned cryptocurrency activity in the country, declaring the digital currency as illegal, although the government seems to be under pressure to reconsider its stance.
Last week, China’s State Council revealed that it would put stricter regulations on “illegal securities activities”, including those operating crypto mining and trading activities.
Ethereum Foundation stated recently on its website that the success of the POS transition can reduce Ethereum’s energy consumption by 99.8 per cent, adding that a POS Ethereum consumes about 2.62 megawatts.
As concern for crypto mining escalates, Bitcoin investors have reportedly lost over $14.2bn in recent crypto crash.
