By Anjali Kochhar
A new report by Cambridge Blockchain Network Sustainability Index report highlights the significant reduction in energy consumption of the Ethereum blockchain after its transition to a proof-of-stake (PoS) mechanism for creating new ether.
Proof-of-work (PoW) blockchains, such as Bitcoin, are notoriously energy-intensive. They require users to solve complex mathematical problems to add new tokens to the network and verify transactions. In contrast, proof-of-stake (PoS) blockchains like Ethereum allow users to stake their own tokens, putting up a specified amount as collateral to verify transactions.
The change in the architecture of the Ethereum blockchain aligned better with sustainability goals, significantly reducing its energy consumption. Before the transition to PoS, Ethereum’s electricity consumption was estimated to be 58.3 terawatt hours, more than Switzerland’s average annual energy usage of 54.9 terawatt hours.
However, after the switch, power demand on the Ethereum network plummeted to just 235 kilowatts from 2.44 gigawatts.
The success of Ethereum’s transition to PoS demonstrates how blockchain technology can align with green energy goals, which China has championed with a pledge to reach peak carbon emissions by 2030 and carbon neutrality by 2060.
The report also notes that the reduced popularity of Ethereum mining in China compared to Bitcoin prior to Beijing’s crackdown on mining activity in May 2021 suggests that the energy consumption concerns associated with cryptocurrency mining were a potential factor in the crackdown.
Overall, the report underscores the potential for blockchain technology to contribute to sustainable development goals by reducing energy consumption and aligning with green energy goals.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.