Episode 84 of Season 4 of The Scoop was recorded remotely with The Block's Tim Copeland and ConsenSys Head Economist Lex Sokolin.
After years of anticipation and development, the Ethereum blockchain is finally on the verge of transitioning its consensus mechanism from proof-of-work to a more energy-efficient mechanism known as proof-of-stake.
According to a blog post from The Ethereum Foundation, switching the consensus mechanism of the blockchain is like changing the engine of a spaceship, and in just a few days, it will be “time to hot-swap the new engine for the old mid-flight.”
In this special Ethereum Merge edition of The Scoop, host Tim Copeland and Lex Sokolin, head economist at leading Ethereum development company ConsenSys, examine the implications of Ethereum’s Merge for the future of the network. During the discussion, Sokolin explains why the switch will help improve the reputation of web3 outside of the crypto space — particularly with those who prefer ESG investments.
A long-standing criticism of cryptocurrency technology singles out the amount of energy required to power the underlying blockchains. According to Sokolin, the fact that Ethereum is set to reduce its energy consumption by roughly 99.95% will help alleviate this concern:
“I think removing the objection around ESG is very meaningful because it does change culturally some of the value proposition of Ethereum to those communities who take really seriously these issues around electricity consumption and impact.”
By removing ESG concerns, Sokolin hopes more people in the world will be able to see the potential for web3 technology, without having to worry about negative externalities.
As Sokolin explains,
“A lot of how people align with web3 and crypto is through idealistic storytelling about what the world could be, and it's really important to be open minded and have a kind of hope for what new platforms can create.”
During this episode, Copeland and Sokolin also discuss:
- What The Merge means for NFTs and the creator economy
- Why developer activity is crucial to a healthy blockchain ecosystem
- How Ethereum economics will change after The Merge
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