Ethereum Cryptocurrency

Recently, The second-largest cryptocurrency Ethereum has undergone a technical upgrade and this upgrade is called the 'Merge'...

Key Points:

Most blockchains use large amounts of energy and have come under fire from environmentalists.

Now, Ethereum has been transitioned from the Proof-of-Work (PoW) consensus method of setting transactions to the Proof-of-Stake (PoS).

Proof of work system: energy-hungry computers validate transactions by solving complex maths problems.
Proof of stake system: where individuals and companies act as validators, using their ether as collateral, to win newly created tokens.

Significance: This will make Ethereum at least “99 per cent more energy efficient”.

About Cryptocurrency:

A Cryptocurrency is a medium of exchange, such as the rupee or the US dollar, but is digital in format.

These are decentralised in nature, which means that no single entity owns or controls them.

There are two types of crypto assets – coins and tokens.

Coins have their own blockchain network while tokens are part of projects built on top of existing blockchains.

Also referred to as Distributed Ledger Technology (DLT), Blockchain is a system which helps in recording information.
The system is basically a digital ledger of transactions that is distributed with the entire network of computer systems and servers on the blockchain.
Every block in the chain contains information of transactions made and every new transaction’s information is added to each participant’s ledger.
In this way, the database is managed by multiple participants and is decentralised (there is no central agency managing the system).
Bitcoin and other digital currencies such as Ethereum use blockchain technology to function.

Benefits:

Checks Corruption: As blocks run on a peer-to-peer network, it helps keep corruption in check by tracking the flow of funds and transactions.

Cost Saving: Cryptocurrencies and blockchains bring many advantages, including cost-savings, decentralisation and transparency.

Saves Time: They are entirely conducted on the internet so, can save substantial time for the remitter and the receiver.