According to a report prepared by Ethereum.org, the annual electricity consumption of Ethereum (ETH) has decreased by more than 99.9% after transitioning from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus mechanism. Ethereum’s global network energy consumption is quite low at 0.0026 terawatt-hours (TWh) per year.
Critical Development in ETH!
Ethereum’s annual carbon footprint has also significantly decreased, dropping by more than 99% to 870 tons of CO2e. The transition, also known as “The Merge,” played a critical role in greatly reducing the environmental costs to ensure the security of the network. The Merge was a significant event in the short history of Blockchain technologies. In the new PoS model, stake-secured ETH replaces expensive hardware to secure the network and verify transactions.
By excluding power-consuming computers competing with each other to solve complex cryptographic problems, Ethereum has made a definite transition to sustainability and scalability. Environmental concerns have been a problem for Blockchain technology for years. Ethereum addressed these concerns with The Merge, while Bitcoin mining became the biggest point of disagreement between environmentalists and Blockchain advocates.
According to data from the Cambridge Bitcoin Electricity Consumption Index (CBECI), BTC‘s greenhouse gas emissions have significantly increased in the past three years. The phase covering the historic bull market of 2020-2021 witnessed intense demand on the BTC network, leading to an influx of more miners and consequently more power-hungry mining hardware.
The Positive Impact of the Upgrade!
While the crypto winter of 2022 provided temporary relief, the market rally of 2023 brought miners back into the game. May saw an unprecedented surge in transaction activity on the blockchain, resulting in a monthly emission of 6.03 MtCO2e; the joint highest level in Bitcoin’s history and on par with March 2021 figures.
Bitcoin’s emissions in 2023 had already reached 34.69 MtCO2e at the time of publication. Assuming continuous emissions at the current rate, it is estimated that the network’s annual figures will rise to 72.48 MtCO2e, which is 30% higher than 2021.
In terms of electricity consumption, Bitcoin is reported to consume roughly 143 terawatt-hours (TWh) annually. If this figure is met this year, 2023 will be the most energy-intensive year on record for Bitcoin.
