Ethereum just completed The Merge – here’s how much energy it’s saving

The merger, which took place early Thursday morning ET, will reduce Ethereum’s power consumption by an even larger margin than expected, according to new analysis. It is also expected to significantly reduce greenhouse gas emissions from the cryptocurrency network.

Ethereum’s electricity consumption is expected to drop by 99.988% after the merger, according to analysis released today by research firm Crypto Carbon Ratings Institute (CCRI). The grid previously used about 23 million megawatt hours a year, the CIRB estimates. In the future, it is expected to use just over 2,600 megawatt hours per year. To help visualize just how massive this is, the report compares this reduction to shrinking the size of the Eiffel Tower to the size of a Lego toy.

The Eiffel Tower shrinks to the size of a Lego toy

This dramatic change, estimates the CCRI, should reduce Ethereum’s total carbon dioxide emissions by 99.992%. Climate pollution from the grid drops from about 11 million tons of CO2 emissions per year to about 870 tons, which the CCRI says is slightly less than the amount of energy that 100 homes in the United States would use in a year.

The new report was commissioned by ConsenSys, an Ethereum software company. Ethereum co-founder Joseph Lubin also founded ConsenSys, which was also involved in the research and development of The Merge.

The report is consistent with other estimates. Alex de Vries, a researcher who runs the Digiconomist website which tracks the energy consumption of Bitcoin and Ethereum, similarly estimates that Ethereum’s electricity demand has dropped by “99.98%, which is perhaps as much as a country like Austria needs”. Prior to The Merge, the Ethereum Foundation estimated that the software update would reduce power consumption by 99.95%.

The huge reduction in pollution comes from a change in how Ethereum users earn new tokens. (For more details, see our in-depth explanation of how this happened.) With The Merge, Ethereum is getting rid of a mechanism called proof-of-work that uses large amounts of computing power to validate blocks of new transactions. Proof of work required crypto miners to solve computer puzzles, an extremely energy-intensive process, in order to validate new blocks on the chain and earn new tokens in return.

Now, Ethereum uses a new mechanism called proof-of-stake that eliminates puzzles and mining. Instead, validators must stake some of their tokens for a chance to validate new blocks of transactions and be rewarded with tokens in return.

You still need computers to store data and verify transactions. And validators will likely continue to run their hardware around the clock. But their hardware won’t be as power-hungry as crypto miners’ data farms. The small discrepancies in power consumption estimates after the merge have to do with the number of validators, the type of equipment they use, and whether it runs on clean or dirty power.

The successful launch of The Merge puts more pressure on other cryptocurrencies still using proof of work. The elephant in the room is Bitcoin, which is currently estimated to gobble up more electricity per year than the country of Kazakhstan.

“[The Merge] is hopefully a step towards a more sustainable future for cryptocurrencies,” says Uli Gallersdörfer, co-founder and CEO of CCRI.

Some miners resist change

Some miners are resisting the change, determined to keep the existing proof-of-work Ethereum blockchain alive, which could limit total power savings.

“It means that the total amount of energy that will be saved here [with The Merge] could be lower than 99.99% if there is surviving Ethereum proof of work and it continues to support some amount of mining activity,” de Vries explains.

The amount of pollution this rogue chain is responsible for will depend on the value of its new token, which should officially launch in one day. The value must be high enough to support the energy costs of miners, after all. The price of this forked Ethereum token briefly jumped in the hours immediately following The Merge before rapidly plummeting.

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