A recent analysis reveals that The Merge, which occurred early Thursday morning ET, would reduce Ethereum's energy consumption by a more significant percentage than anticipated. It is also expected to reduce greenhouse gas emissions from the cryptocurrency network significantly.
According to a report released today by research firm Crypto Carbon Ratings Institute, Ethereum's electricity use is anticipated to decrease by a staggering 99.988% following the Merge (CCRI). The article uses the image of the Eiffel Tower shrunk to the size of a Lego toy person to illustrate precisely how significant this is. According to CCRI, the network consumed over 23 million megawatt-hours annually. It is anticipated to require just over 2,600 megawatt-hours annually in the future.
According to CCRI, this significant modification should result in a 99.992% reduction in Ethereum's overall carbon dioxide emissions. The network's climate pollution decreases from over 11 million tons of CO2 emissions annually to about 870 tons, which, according to CCRI, is just slightly less energy than 100 US homes consume annually.
Ethereum software provider ConsenSys ordered the latest study. Joseph Lubin, a co-founder of Ethereum, also established ConsenSys, which contributed to the research and creation of The Merge. The report is consistent with other projections. Like other researchers, Alex de Vries thinks Ethereum's electricity use has decreased by "99.98%, which comes down to maybe as much as a country like Austria requires." Alex de Vries runs the website Digiconomist, which measures Bitcoin and Ethereum energy use. The Ethereum Foundation predicted that the software update would utilize 99.95% less energy before The Merge.
The significant pollution reduction results from a change in how Ethereum users acquire fresh tokens. With The Merge, Ethereum will move away from the proof-of-work process, which consumes a significant amount of computational power to validate blocks of new transactions. With proof of work, new blocks on the chain had to be validated to earn additional tokens, which required crypto miners to solve computational puzzles, a highly energy-intensive process.
Puzzles and mining are no longer used in Ethereum because of a new process called proof of stake. Instead, to have a chance at validating new blocks of transactions and earning tokens in return, validators must stake some of their tokens.
Computers are still required to validate transactions and store data. Validators' hardware will probably continue to run continuously as well. However, their devices won't consume nearly as much energy as the data farms used by crypto miners. The modest variations in post Merge energy usage estimates are related to the number of validators, their equipment, and whether it uses clean energy.
The Merge's successful debut puts more pressure on other cryptocurrencies that still rely on proof of work. Bitcoin is a big problem; it is now predicted to consume as much electricity annually as Kazakhstan.
Uli Gallersdörfer, co-founder and CEO of the CCRI, states that "[The Merge] is hopefully a step into a more sustainable future for cryptocurrencies."
Since some miners are adamant about maintaining the current proof-of-work Ethereum blockchain, this opposition could reduce the overall energy savings.
Suppose Ethereum remains a proof of work and continues to support some degree of mining. In that case, the overall amount of energy that will be saved here by The Merge "does indicate that the entire amount of energy that's going to be saved here [with The Merge] could be less than 99.99%," according to de Vries.
The value of that rogue chain's new token, which is anticipated to go live within a day, will determine how much pollution it causes. After that, the value must be sufficient to cover the energy expenses of miners. In the hours following The Merge, the price of that forked Ethereum token briefly rose before dropping sharply.