Ethereum reduced energy consumption by 99.99%

According to the NewScientiest, researchers have reported that Ethereum, the world’s second-largest cryptocurrency, has successfully reduced its emissions by 99.99% after an unprecedented experiment to abandon power-hungry mining in favor of a new approach. 

Ethereum’s Shift in Security Methods

Previously, Ethereum and many other cryptocurrencies used “Proof of Work” (PoW) to secure their networks. This method required computers to perform complex calculations to mine new currency and verify transactions, leading to high energy consumption. However, in September 2022, Ethereum adopted a new system called “Proof of Stake” (PoS) during a transition known as the Merge.

New Data on Energy Consumption

The Cambridge Centre for Alternative Finance (CCAF) has released new data on the energy consumption of Ethereum, following its previous analysis of Bitcoin’s energy use over the past four years. The latest update, which Alexander Neumüller developed at the University of Cambridge, has successfully achieved a “staggering” reduction in electricity consumption. 

Ethereum’s New System for Transaction Verification

The new Ethereum system now enables validators to deposit funds into the network. Consequently, they can verify transactions and earn rewards. This alteration eliminates the necessity of computer hardware for mining new currency. According to the Ethereum Foundation, a non-profit organization overseeing Ethereum’s development, the Merge should reduce energy consumption by 99%. Nevertheless, the outcomes of this transition are uncertain, given that nothing of this magnitude has been done before.

Historical and Current Energy Use

According to data from the CCAF, Ethereum, like Bitcoin, has been consuming increasingly more energy every year since its inception in 2015. In 2021, it used a total of 16.4 terawatt hours. But by September 14th, 2022, a day before the Merge, the energy consumption had already reached 17.6 TWh and the year-end estimate was set to be 21.4 TWh.

CCAF’s Latest Estimates

The CCAF’s latest estimates show Ethereum’s energy consumption is set to drop drastically to just 6.6 gigawatt-hours per year. This amount equals the electricity used by around 2,000 typical UK homes. This marks a sharp contrast to Ethereum’s previous energy use, which totaled 58.3 TWh since its launch, similar to Switzerland’s annual electricity consumption.

Bitcoin Won’t Adopt Ethereum’s Proof-of-Stake System

Blockchain experts have ruled out Bitcoin adopting Ethereum’s energy-efficient proof-of-stake system. Neumüller notes Bitcoin’s proof-of-work method is deeply embedded and hard to change. Ethan Vera of Luxor Mining adds that Bitcoin’s energy use is crucial for security. Despite Ethereum’s greener shift, Bitcoin is unlikely to follow soon.