A wind of optimism is finally blowing in the world of cryptos, after a succession of bad news. For the past few days, the value of Ethereum, the second most important crypto, has been soaring. While one ETH was worth less than $900 on June 18, today the crypto is worth more than $1,500.
While this is of course good news for crypto enthusiasts, this sudden rise in the value of Ethereum may worry those who are concerned about the ecological impact of cryptocurrencies, as well as those who intend to buy a Graphic card.
Indeed, the collapse of cryptos had led to a drop in mining activities (which makes cryptos very energy-intensive). And moreover, recently, we have seen the end of the shortage of graphics cards (used by some cryptocurrency miners to solve mathematical calculations).
Demand for graphics cards would not soar with the price of Ethereum
But the good news is that according to an article by PC Gamer, the recent rise in the value of ETH may not have boosted demand for graphics cards that can be used to mine crypto. The site claims that (for now) it’s still easy to find used GPUs on sites like eBay.
To support this, the site also mentions the hashrate of ethereum which seems to have stabilized. Indeed, a skyrocketing hashrate would have suggested an increase in Ethereum mining activity.
Also, if the ethereum community projects are successful, the graphics card shortages and power consumption concerns associated with ethereum mining should be behind us.
After the “Merge”, ethereum will be less energy intensive and it will require less computing power
Indeed, we have known for a while that ETH needs to move from the Proof of Work consensus mechanism to Proof of Stake. The proof-of-work mechanism, which is also used by the Bitcoin network, is what makes Ethereum very energy-intensive.
As we explained in our FAQ, “Proof of work is a consensus mechanism in which network users lend the computing power of their computers to solve a cryptographic puzzle. » However, this computing power requires a lot of machines (including graphics cards), and a lot of energy.
For its part, the Proof of Stake mechanism, to which ethereum wants to switch, works differently: “Proof of stake is a consensus mechanism in which users lock in the cryptocurrency they own. The computer protocol randomly grants the right to validate a block to one of them. In this system, the probability of being chosen to validate the block is equal to the amount of cryptocurrencies locked. The greater the amount of cryptocurrency locked, the more likely the user is to be chosen to validate the transaction. »
According to the Ethereum Foundation, this switch from PoW to PoS would reduce the energy consumption of ETH by 99.95%. PoS will also allow ETH to have the necessary scalability to become a true payment network.
And precisely, if the value of ethereum has suddenly increased in recent days, it is because this event, the transition from PoW to PoS, also called “The Merge”, seems imminent. Recently, a developer has indeed published a proposal that suggests that this “Merge” could take place on September 19th.