![\"A](\"https:\/\/i.kinja-img.com\/gawker-media\/image\/upload\/c_fill,f_auto,fl_progressive,g_center,h_80,pg_1,q_80,w_80\/aa886d1697a950593cff3b2e81b24e5a.jpg)
<\/div>\n<\/div>\n<\/span><\/p>\n
<\/figure>\n If you type the phrase \u201cthe Merge\u201d into Google today, you\u2019ll be treated with a countdown: It\u2019s coming in a little over two days, as of this writing. The countdown is ticking off the time until one of the biggest shifts the crypto world has ever seen. <\/p>\n The Merge refers to the transition of the Ethereum network from a proof of work mining system to a proof of stake one. Ether is the second-biggest cryptocurrency<\/a><\/span> by market cap, coming in behind Bitcoin. As of January, 80% of the world\u2019s NFTs were on the Ethereum network<\/a><\/span>. When people talk about Web3 applications in crypto, they\u2019re often talking about developing on the Ethereum blockchain or related protocols. This shift could majorly reduce the greenhouse gas emissions from blockchain technology, but there are some thorny problems ahead.<\/p>\n The huge energy consumption from the world\u2019s cryptocurrencies comes from a mining process known as proof of work, which requires significant computing power. In this proof of work system, miners use machines that eat up enormous energy to race to solve an equation; whoever solves the equation first is given the privilege of creating the next block on the blockchain.<\/p>\n \u201cI like to describe it as a massive game of guess-the-number, where only the first one to guess correctly gets to create the next block for the blockchain,\u201d said Alex de Vries, the founder of Digiconomist, a website that tracks carbon emissions from cryptocurrencies. \u201cThe bitcoin network is currently generating 200 quintillion of those guesses every second of the day\u2014that\u2019s 200 with 18 zeroes. What they\u2019re doing is basically going, is it 1? Is it 2? Is it 3? But they\u2019re doing it at a very high speed, and hoping at some point they find the one that fits the requirements. If you succeed, lucky you: you get to create the next block in the blockchain, and you get the reward associated with it.\u201d<\/p>\n Proof of stake, meanwhile, functions much more like a lottery. Instead of putting numerous machines to work, miners submit a form of collateral\u2014like buying a raffle ticket\u2014to enter for a chance to build the next block on the blockchain.<\/p>\n G\/O Media may get a commission<\/p>\n<\/div>\n<\/div>\n \u201cIn proof of stake, somebody is just picked out of a hat at random, which takes no energy at all,\u201d said David Yermack, a professor of finance at New York University\u2019s Stern School of Business. <\/p>\n By switching to the lottery system represented by proof of stake, the network will no longer need the energy-sucking computers that grind out equations for proof of work systems. Some estimates predict that, if pulled off successfully, the Merge could eliminate more than 99% <\/a><\/span>of the network\u2019s carbon footprint. Given that the Ethereum network currently has a carbon footprint roughly the size of Finland\u2019s<\/a><\/span>, that\u2019s a pretty major upgrade.<\/p>\n The leadership of the Ethereum blockchain said last week that the network would update its software between September 13 and 15. The update will affect what\u2019s known as the difficulty of ethereum\u2014the amount of time it takes for a miner to solve a problem to create a new block on the blockchain. Crypto software usually updates to ensure that problems are able be solved in a reasonable amount of time. But this week, the Ethereum network will up what\u2019s known as the currency\u2019s difficulty\u2014making it effectively impossible to mine under the old proof of work system. <\/p>\n \u201cThe difficulty will set to an enormously increased level\u2014the so-called \u2018difficulty bomb\u2019 will go off,\u201d Yermack said. \u201cThe people doing proof of work mining, they will have no choice considering how difficult it will become to mine under the old system. They will have to put down their picks and shovels, stop mining the old way, and come over to the new way.\u201d<\/p>\n That change will, theoretically, usher in a permanent new way of mining ethereum that doesn\u2019t use all that energy. \u201cBasically, all the energy use will go away,\u201d Yermack said. \u201cIt\u2019s very cheap to pick someone at random by running a lottery. You compare that to people who are doing trillions of calculations per second, running enormously powerful computers that take a lot of energy\u2014the whole point is to dial down the energy consumption, and this will make it all but disappear.\u201d<\/p>\n That depends on several factors. Ethereum leadership, De Vries pointed out, has said many times in the past that they were going to switch to proof of stake, and have not made the switch. But this is the farthest they\u2019ve gotten in the process and the first time that they have given such a concrete date for a switch; as we get closer, it\u2019s safer and safer to assume that something<\/em> will happen this week.<\/p>\n Like any software change, there could be bugs in the actual material of the update that could hamper the transition. But a larger issue could come from miners deciding not to cooperate with the new mode of working. The proof of work method has meant that Ethereum miners, like all cryptocurrency miners, have spent a lot of money investing in physical processors to solve equations\u2014an investment they\u2019d be loath to give up on with the switch to proof of stake.<\/p>\n Miners could create what\u2019s known as a fork<\/a><\/span>, or a split away from the main blockchain to create a separate version of the network. Both the Bitcoin and Ethereum networks have already experienced forks that created different versions of the currencies, known as Bitcoin Cash and Ethereum Classic. If enough ether miners stick with proof of work, it could keep many of the machines that were supposed to be retired after the Merge still active and creating emissions.<\/p>\n One team of these miners say they have already dismantled the difficulty bomb<\/a><\/span> and are readying to create a hard fork. If these miners keep their machines doing proof of work mining, just on a different Ethereum fork\u2014or by simply moving to mining other cryptocurrencies\u2014that could mean many of these energy-hungry mining machines remain online, working and sucking up energy, even as the rest of the network transitions.<\/p>\n \u201cThe miners have all the reason to try,\u201d De Vries said. \u201cThey\u2019re going to lose all their income, so why not give it a shot?\u201d<\/p>\n Not quite. For starters, fixing Ethereum\u2019s emissions ignores the real crypto elephant in the room: Bitcoin. Even after the crypto crash earlier this year, the Bitcoin network still emits an estimated<\/a><\/span> 71.5 megatonnes of CO2 per year, far dwarfing Ethereum\u2019s 46.8 megatonnes<\/a><\/span>.<\/p>\n De Vries said there\u2019s a chance that a successful Ethereum transition to proof of stake could jumpstart a similar process for Bitcoin, especially given a recent attempt by the EU Parliament<\/a><\/span> and the leadership of some countries<\/a><\/span> to ban dirty mining. \u201cI fully expect that, at least in Europe, pretty soon a ban on proof of work is going to be back on the table,\u201d he said.<\/p>\n But Yermack is skeptical. He pointed out that, unlike Ethereum, which has a centralized leadership and recognizable public figures at the helm to help encourage a big transition like the Merge, the Bitcoin network is run in a more decentralized fashion: Its founder is famously anonymous, and any switch to proof of stake would have to persuade the operators of the thousands of Bitcoin \u201cnodes\u201d to make the change.<\/p>\n \u201cThere was a political dimension to [Ethereum] becoming environmentally friendly that was never an issue with the people who put Bitcoin out there,\u201d he said. \u201cThere\u2019s going to be a fantasy on the part of environmentalists like, okay, now Bitcoin can switch, but it\u2019s a very difficult governance problem.\u201d<\/p>\n If the Bitcoin network does eventually transition, that would be huge for crypto\u2019s emissions\u2014but still not quite a silver bullet. Cryptocurrency, as De Vries pointed out, is at its core constructed to provide stability through a decentralized network\u2014the more machines on it, whether they be running proof-of-stake or proof-of-work, the more secure that network is. That\u2019s the opposite of what is going to be needed as the world shifts its systems to combat climate change.<\/p>\n \u201cFrom a blockchain perspective, you always want more machines, but from a climate and efficiency perspective, less is more,\u201d he said. \u201cThe thing is, if you add proof of work on top of it, you can make things ten thousand times worse. I wouldn\u2019t say moving to proof of stake completely solves all sustainability challenges related to crypto\u2014I always say to people, if we didn\u2019t have proof of work and we just had proof of stake today, we would probably be pretty frustrated about the amount of inefficiency that it introduces. But now we have blockchains that run on proof of work and they make proof of stake look really good.\u201d<\/p>\n Still, De Vries said, any switches to proof of stake are more than welcome before discussing these other issues. \u201cLet\u2019s first fix the biggest part of the problem.\u201d<\/p>\n<\/div>\nWhat\u2019s the difference between proof of work and proof of stake, climate-wise?<\/strong><\/h2>\n
What exactly is going to happen this week?<\/strong><\/h2>\n
Will everything go smoothly?<\/strong><\/h2>\n
If the Merge goes well, are all of crypto\u2019s environmental problems fixed?<\/strong><\/h2>\n