One of the most significant criticisms of cryptocurrency when it exploded in popularity in 2021, was its energy inefficiency. For every article raving about the exciting future of digital assets, there was another talking about how bad it is for the environment. Which, at the time, was a fair criticism, especially as droves of newcomers invested in cryptocurrency. However, in a post-Merge world, where the web3 community knows about the impact, is blockchain energy consumption still a problem?
Ethereum blockchain energy consumption is down over 99.9%.
The Merge’s most popularized and arguably significant aspect was cutting Ethereum’s energy consumption by over 99%. Cointelegraph reports that, at its peak, Ethereum used over 93 terawatt-hours (TWh) per year, an amount comparable to small countries.
However, the switch to proof-of-stake has cut the blockchain’s annualized energy consumption to .01 TWh. The carbon footprint of a single transaction on Ethereum is about the same as watching YouTube videos for two hours. Unfortunately, Ethereum isn’t the problem child regarding blockchain energy consumption.
Bitcoin uses over 135 TWh of energy per year.
Even at its peak of energy consumption, Ethereum never came close to the 135.23 TWh Bitcoin nets per year. According to Digiconomist, comparatively, the world’s most popular cryptocurrency uses about the same amount of energy as all of Sweden. Although, about 59% of Bitcoin power consumption uses renewable energy. According to Bitcoinist, the actual figure is closer to 266 TWh annually. However, that figure is a bit misleading.
Bitcoin blockchain energy utilization is undeniably massive (its carbon footprint is about the same as the entirety of Colombia). However, supporters argue that Bitcoin mining only accounts for about .16% of the energy consumed globally. Additionally, Bitcoin only contributed about .1% to global carbon emissions.
Unfortunately, even though Bitcoin is 23% more efficient in Q3 2022 compared to Q3 2021, it consumes 41% more energy. As a result, the European Union released guidelines to keep a watchful eye on blockchain’s environmental impact and implement tighter energy regulations. The Whitehouse also released a document exploring the climate implications of cryptocurrency, though there are no official plans yet.
