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posted by Fnord666 on Thursday January 03 2019, @06:11AM   Printer-friendly
from the a-step-in-the-right-direction dept.

Submitted via IRC for Bytram

Ethereum Plans to Cut Its Absurd Energy Consumption by 99 Percent

Bitcoin soaks up most of the hype and the opprobrium heaped on cryptocurrencies, leaving its younger and smaller sibling Ethereum in the shadows. But Ethereum is anything but small. Its market capitalization was roughly US $10 billion at press time, and it has an equally whopping energy footprint.

Ethereum mining consumes a quarter to half of what Bitcoin mining does, but that still means that for most of 2018 it was using roughly as much electricity as Iceland. Indeed, the typical Ethereum transaction gobbles more power than an average U.S. household uses in a day.

"That's just a huge waste of resources, even if you don't believe that pollution and carbon dioxide are an issue. There are real consumers—real people—whose need for electricity is being displaced by this stuff," says Vitalik Buterin, the 24-year-old Russian-Canadian computer scientist who invented Ethereum when he was just 18.

Buterin plans to finally start undoing his brainchild's energy waste in 2019. This year Buterin, the Ethereum Foundation he cofounded, and the broader open-source movement advancing the cryptocurrency all plan to field-test a long-promised overhaul of Ethereum's code. If these developers are right, by the end of 2019 Ethereum's new code could complete transactions using just 1 percent of the energy consumed today.

[...] Ethereum's plan is to replace PoW with proof of stake (PoS)—an alternative mechanism for distributed consensus that was first applied to a cryptocurrency with the launch of Peercoin in 2012. Instead of millions of processors simultaneously processing the same transactions, PoS randomly picks one to do the job.

In PoS, the participants are called validators instead of miners, and the key is keeping them honest. PoS does this by requiring each validator to put up a stake—a pile of ether in Ethereum's case—as collateral. A bigger stake earns a validator proportionately more chances at a turn, but it also means that a validator caught cheating has lots to lose.

Moving to PoS will cut the energy consumed per Ethereum transaction more than a hundredfold, according to Buterin: "The PoW part is the one that's consuming these huge amounts of electricity. The blockchain transactions themselves are not super computationally intensive. It's just verifying digital signatures. It's not some kind of heavy 3D-matrix map or machine learning on gigabytes of data," he says.


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  • (Score: 3, Insightful) by bradley13 on Thursday January 03 2019, @12:36PM (1 child)

    by bradley13 (3053) on Thursday January 03 2019, @12:36PM (#781444) Homepage Journal

    "No one has yet answered my query as to how Cryptos will address the need to inject money into the economy in the event of recession or even depression."

    In the first place, it isn't at all clear that crypto-currencies have the responsibility for managing the economy.

    More importantly, it is even less clear that "injecting money into the economy" is actually a good thing to do in the event of a recession. Governments to date have done a pretty terrible job of managing economic problems. Even after all this time, people still cannot agree on what monetary policies should have been during the Great Depression of the 1930s, nor whether the actions then taken were beneficial, harmful, or simply irrelevant.

    The response since the 2008 crisis - mainly lowering interest rates and increasing deficit spending - have simply let countries to continue increasing their national debts, even though the crisis is past. Rising interest rates, which are coming to the US now, and to Europe in 2020, will massively increase the cost of debt service, which in turn will cause severe problems in the most indebted countries. So was the response to the 2008 crisis beneficial in the long term? Unlikely.

    tl;dr: Injecting money into the economy is a hammer. The national banks think everything looks like a nail, because that hammer is is the only tool they have.

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  • (Score: 2) by legont on Friday January 04 2019, @05:41AM

    by legont (4179) on Friday January 04 2019, @05:41AM (#781922)

    it is even less clear that "injecting money into the economy" is actually a good thing to do

    The alternative is not very pleasant. Money gets accumulated by very few persons and organizations and the economy halts because of deficit of money. At some point money is confiscated (usually with exterminating of the owners) and redistributed. It'd be OK, I guess, but with nuclear weapons might get real ugly.

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    "Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.