The Merge, which took place early Thursday morning ET, will cut Ethereum’s energy consumption by an even bigger margin than previously expected, a new analysis finds. It’s also expected to slash the cryptocurrency network’s greenhouse gas emissions dramatically.
Ethereum’s electricity use is expected to drop by a whopping 99.988 percent post-Merge, according to the analysis published today by research company Crypto Carbon Ratings Institute (CCRI). The network was previously using about 23 million megawatt-hours per year, CCRI estimates. Moving forward, it’s 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 the Eiffel Tower shrinking to the size of a Lego toy person.
The Eiffel Tower shrinking to the size of a Lego toy person
That dramatic change, CCRI estimates, should reduce Ethereum’s total carbon dioxide emissions by 99.992 percent. The network’s climate pollution drops from roughly 11 million tons of CO2 emissions a year to around 870 tons, which CCRI says is slightly less than the amount of energy 100 homes in the US 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 in line with other estimates. Alex de Vries, a researcher who runs the website Digiconomist that tracks Bitcoin and Ethereum energy use, similarly estimates that Ethereum’s electricity demand has fallen “99.98%, which comes down to possibly as much as a country like Austria requires.” Before The Merge, the Ethereum Foundation had estimated that the software update would reduce energy use by 99.95 percent.
The enormous pollution reduction comes from a change in how Ethereum users earn new tokens. (For more details, check out our in-depth explainer on how that happened.) With The Merge, Ethereum is getting rid of a mechanism called proof of work that uses vast amounts of computing power to validate blocks of new transactions. Proof of work required crypto miners to solve computational 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 gets rid of puzzles and mining. Instead, validators need to 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 probably still run their hardware around the clock. But their hardware won’t be nearly as energy-hungry as crypto miners’ data farms. The small discrepancies in estimates for energy consumption post-Merge have to do with how many validators there are, what kind of equipment they’re using, and whether it runs on clean or dirty energy.
The successful launch of The Merge places greater 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 as the country of Kazakhstan.
“[The Merge] is hopefully a step into a more sustainable future for cryptocurrencies,” says Uli Gallersdörfer, co-founder and CEO of the CCRI.
Some miners are resisting the change
“It does mean that the total amount of energy that’s going to be saved here [with The Merge] could be less than 99.99% if there is a proof of work Ethereum surviving and it continues to support some amount of mining activities,” says de Vries.
How much pollution that rogue chain is responsible for will depend on how valuable its new token is, which is expected to officially launch within a day. The value has to be high enough to sustain miners’ energy costs, after all. The price of that forked Ethereum token briefly surged in the hours immediately after The Merge before quickly falling.
FAQs
Tests run on the Beacon Chain prior to the Merge suggested that the transition would lower Ethereum's energy use by 99.95%, making proof-of-stake roughly ~2000x more energy-efficient than proof-of-work.
How much energy does Ethereum use merge? ›
By 14 September 2022 – the day before the Merge – it had already used 17.6TWh, and was on course to end the year at 21.4TWh. The CCAF now estimates that Ethereum will consume just 6.6 gigawatt hours of electricity annually, equivalent to about 2000 typical homes in the UK.
How much energy did the merge save? ›
Key Takeaways. The Ethereum Merge was a network update to transition Ethereum from proof of work (PoW) to a proof-of-stake (PoS) consensus mechanism. A 99% reduction in energy costs of processing Ethereum transactions was expected and became a reality.
What is the burn rate of Ethereum after merge? ›
Interestingly, under its current proof-of-stake (PoS) model, the Ethereum network has burned an average of 1.83 ETH/min since the merge. However, since the burn mechanic was implemented as part of the EIP-1559 upgrade in Aug. 2021, the average burn rate is almost double, 3.09 ETH/min.
How much energy does one Ethereum transaction use? ›
For example, with Ethereum handling roughly 1.1 million transactions per day after The Merge, the average electricity consumed per transaction ranges from 0.8 to 14.7 Wh. In comparison, a Mastercard transaction consumes only 0.7 Wh on average.
Will Ethereum merge reduce gas fees? ›
The Merge does not have any notable impact on Ethereum's network performance. Instead, it lays the foundation for implementing several scalability and performance-focused upgrades. The Surge, the next in line in a post-Merge era, will reduce Ethereum network congestion and lower gas fees.
What is the carbon footprint of Ethereum merge? ›
Alex de Vries, the economist behind the website, estimates that the merge will reduce the carbon emissions linked to ethereum by more than 99%. De Vries added that the move could represent 0.2% of the world's electricity consumption disappearing overnight.
Is Ethereum still bad for the environment? ›
Ethereum, Solana, and many others use a system that requires very little energy—their environmental impact adds little to the impact already created by the global networking infrastructure and its daily use.
Can the merge save crypto? ›
The Merge was one of the most anticipated events in Ethereum's history, representing the network's transition from PoW to PoS. This eliminates the need for energy-intensive mining and instead secures the network with staked Ether/ETH (the cryptocurrency used by Ethereum).
How efficient is Ethereum proof-of-stake? ›
According to the Ethereum Foundation, the current Proof-of-Work system consumes roughly 5.13 gigawatts on a continuous basis, whereas the Proof-of- Stake system consumes only 2.62 MW, or about 99.95% less energy.
Ether (ETH), the native cryptocurrency of the Ethereum blockchain, remained the same after The Merge takes place.
What is the staking rate for ETH after merge? ›
What are the current rewards for staking ETH, what about after The Merge? Percentage rates for your staked ETH are currently estimated between 3% and 6% annually (APR). These rewards will continue after The Merge. After The Merge, Kraken will also collect additional rewards payable to stakers.
How fast is ETH after merge? ›
Ethereum 2.0 can process 100,000 transactions per second (TPS): The only thing the Merge changed about transaction speed is that the average block time drops to 12 seconds from 13–14 seconds.
Is Ethereum more energy efficient than Bitcoin? ›
The most popular cryptocurrency, Bitcoin, is also the most energy intensive. In May 2023, a single Bitcoin transaction used 703.25 kilowatt-hours of electricity. By contrast, transactions on Ethereum — which dramatically reduced its power usage in 2022 — use between 0.0008 and 0.0147 kilowatt-hours.
How much electricity does it cost to mine Ethereum? ›
Ethereum Mining Reward Forecasts
| Time Frame | ETH Rewards | Power Cost (in USD) |
|---|
| Hourly | 43200000000000.00000000 | $0.45 |
| Daily | 1036800000000000.00000000 | $10.80 |
| Weekly | 7257600000000000.00000000 | $75.60 |
| Monthly | 31104000000000000.0000 | $324.00 |
1 more rowThe proof of stake mechanism was designed to be an energy-efficient alternative to the proof of work mechanism. And it has proven to be environmentally friendly in more ways than one.
How is supply of ETH affected by the merge? ›
A quick glance at recent data shows that Ethereum's supply has increased by almost 1 million ETH in the past year, equating to roughly 1% inflation. While this sounds concerning, it's important to clarify a key point. Since the Ethereum Merge, total ETH supply has actually decreased by 0.08%.
How much power does Ethereum POS use? ›
According to the Ethereum Foundation, the current Proof-of-Work system consumes roughly 5.13 gigawatts on a continuous basis, whereas the Proof-of- Stake system consumes only 2.62 MW, or about 99.95% less energy.
What is the yield of ETH staking after merge? ›
What is the average yield of staking? For Ethereum, after the successful merge in 2023, the average staking yields fluctuated between 4% and 6%.
