This requires specialised mining hardware that consumes a significant amount of energy . The energy consumption of proofof-work mining is directly proportional to the amount of computational power being used , and this can lead to significant energy consumption and environmental impact .
“ Proof-of-stake , on the other hand , uses a different method where transactions are validated by those who hold cryptocurrency and ‘ stake ’ in the network , based on the amount staked . Those ‘ validators ’ put up a portion of their own cryptocurrency as collateral to verify transactions , and they receive rewards for their participation . Virtually no energy is consumed using this method ,” Musii says .
“ One of the main benefits is lower energy consumption thanks to reduced computational work and energy use ,” elaborates Daniele Servadei , CEO and Founder of ecommerce solution Sellix . “ What ’ s more , it reduces e-waste , with less specialised hardware and fewer device replacements required . There are also benefits around scalability , with proof-ofstake improving network efficiency and supporting greener growth .”
“ THE MERGE HAS UNDOUBTEDLY BEEN A POSITIVE DEVELOPMENT FOR THE CRYPTO INDUSTRY ”
YAROSLAV MUSII DELIVERY DIRECTOR FOR FINANCIAL SERVICES AND INSURANCE , INTELLIAS
Does proof-of-stake make proof-of-work redundant ? Ethereum ’ s switch to a proof-of-stake model – known as The Merge – has been described as one of the largest open-source software events in the history of cryptocurrencies . It ’ s no wonder that crypto staking is offering hope to an industry that has long been plagued by its poor environmental track record . The need for change is drastic ; according to a 2021 report by Katten , a single
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