Is Blockchain energy consumption still a problem?
One of the main criticisms of cryptocurrency when it exploded in popularity in 2021 was its energy inefficiency. For every article fantasizing 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 hordes of newcomers were investing in cryptocurrency. But in a post-merger world, where the web3 community knows about the impact, is the energy consumption of blockchain still an issue?
Ethereum blockchain energy consumption is down over 99.9%.
The most popularized and arguably important aspect of the merger was cutting Ethereum’s energy consumption by over 99%. Cointelegraph reports that at its peak, Ethereum consumed over 93 terawatt-hours (TWh) per year, an amount comparable to small countries.
However, the transition to proof-of-stake has cut the blockchain’s annual energy consumption to 0.01 TWh. The carbon footprint of a single transaction on Ethereum is about the same as watching YouTube videos for two hours. Unfortunately, Ethereum is not the problem child when it comes to blockchain energy consumption.
Bitcoin uses over 135 TWh of energy per year.
Even at peak energy consumption, Ethereum never came close to the 135.23 TWh of the Bitcoin grids per year. According to Digiconomist, by comparison, the world’s most popular cryptocurrency uses roughly the same amount of energy as the whole of Sweden. Although about 59% of Bitcoin’s electricity 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 (the carbon footprint is about the same as the whole of Colombia). However, proponents claim that Bitcoin mining accounts for only about 0.16% of the energy consumed globally. Additionally, Bitcoin only contributed about 0.1% to global carbon emissions.
Unfortunately, even though Bitcoin is 23% more efficient in Q3 2022 compared to Q3 2021, it uses 41% more energy. As a result, the EU issued 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, although there are no official plans yet.
