Proof of Green: How Ethereum 2.0 Solves Crypto's Energy Concerns - DeFriday #8

If you’re exposed to any amount of news about cryptocurrency, you’ve probably heard the environmental concerns. 

Headlines and politicians will denounce Bitcoin, saying it’s using more energy than the entire country of Denmark or Sweden just so people can send around made-up Internet money.

The actual extent of the environmental impact of crypto is debatable. But regardless, Bitcoin and Ethereum do use a lot of energy! And in the grand scheme of things less energy usage is usually better than more, so if we have the option, it’d be cool to get all the benefits of crypto without using so much energy. 

Thankfully, we can. 

Bitcoin and Ethereum currently derive their security and functionality from a process called “Proof of Work.” But Ethereum plans to switch to a new system called “Proof of Stake” in the next year which will decrease its energy usage by 99.95%. 

Let’s explore why the energy usage in Proof of Work is so high right now, and how the switch to Proof of Stake will get it under control. 

Proof of Work: Why Bitcoin and Ethereum are So Energy Intensive

One of the core innovations of Bitcoin is that it created a way for a huge number of people around the world to transact with each other without needing a trusted third party like a bank, government, or escrow to mediate the transactions.