How will the Ethereum merge impact the environment?

Ethereum’s long awaited merge has finally happened, but what does this mean for cryptocurrency and the environment?

What is the Ethereum merge? The merge signifies a process that’s been years in the making. Ethereum has basically flipped from being proof-of-work blockchain to proof-of-stake blockchain.

Proof-of-work is the process most people associate with the creation of cryptocurrency: people all over the world use powerful computers to mine new coins by solving complicated algorithms, which helps the miners — who earn themselves coins — and helps the blockchain in general by validating transactions. Proof-of-stake is the process where existing owners of a crypto put their own coins at risk (at stake) to validate transactions over the blockchain. As Ethereum.org notes, “This staked ETH [ie: capital] then acts as collateral that can be destroyed if the validator behaves dishonestly or lazily.”

The merge has many benefits for Ethereum itself, however, the biggest benefit is to the environment. The Merge is great for the environment because it uses proof-of-stake validation.

This change from proof-of-work to proof-of-stake practically speaking means a 99% reduction in energy use to validate transactions.