An army of computer programmers scattered across the globe will this week attempt one of the biggest software upgrades the crypto sector has ever seen in a bid to reduce its polluting energy use.

Developers have spent years working on a more energy-efficient version of the Ethereum blockchain, a digital ledger that underpins a multi-billion dollar ecosystem of cryptocurrencies, digital tokens (NFTs), games and apps.

Ethereum – the second most important blockchain after Bitcoin – consumes more energy than New Zealand every year.

Experts say the switch, which is expected to take place between Tuesday and Thursday, would cut energy use by more than 99 percent.

Enthusiasts hope that a greener Ethereum will spur wider adoption, particularly as a way to enable banks to automate transactions and other processes.

So far, however, the technology has mainly been used to create speculative financial products.

ING Bank said in a recent note that the move could help Ethereum gain acceptance from policymakers and regulators.

“This, in turn, could spur the willingness of traditional financial institutions to develop Ethereum-based services,” the bank said.

Dubbed the “merge,” the move will change the way transactions are logged.

Currently, so-called crypto miners use energy-guzzling computers to solve puzzles that reward them with new coins – a system known as “proof of work”.

The new system will get rid of those miners and their stacks of computers overnight.

Instead, “validators” must raise 32 Ether (worth $55,000) – Ethereum’s cryptocurrency – to participate in the new “Proof of Stake” system, where they receive rewards for their work.

But the merger process will be risky.

Blockchain firm Consensys called it a “monumental technological milestone” and the biggest update to Ethereum since its inception in 2015.

Critics have questioned whether such an upgrade will be uneventful given the sector’s history of instability.

Ethereum went offline for three hours in May as a new NFT project sparked a rush of buyers that overwhelmed the network.

Several exchanges and crypto companies said they would halt transactions during the merger process.

The upgrade also faces a possible rebellion from crypto mining companies, whose businesses will be badly damaged.

They can try to hijack the process or create a “fork”, basically a smaller blockchain that would continue with the old mechanism.

And even if the “merger” is successful, Ethereum will still face major hurdles before it can be more widely adopted.

For example, it is expensive to use and the update will not reduce the charges.

And the broader crypto sector is being plagued by wildly volatile prices, security vulnerabilities, and a slew of scams.

Crypto attorney Charles Kerrigan of CMS firm told AFP that Ethereum is “decentralized and complicated” and hasn’t been sufficiently tested to get governments and banks on board.

“There were questions about how easily it could handle upgrades of the kind that traditional software vendors offer their customers,” he said.

“A successful merger will answer these questions.”