Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
Ethereum touches down on the most sensitive topic i.e. energy consumption by blockchain and says that it will reduce nearly 99% of its current energy use by transitioning to the PoS model.
Tesla‘s dropping of Bitcoin payments last week citing environmental concerns has once again re-ignited the debate of crypto energy consumption. All of a sudden the demand for some “green coins” has shot to the roof. While Bitcoin’s Proof-of-Work network is a massive energy guzzler, Ethereum’s current network is in the same shoes. However, Ethereum’s research and development team brings some explanations to its future plans. As we know, Ethereum is preparing for transitioning to the Proof-of-Stake consensus model. The team is confident that upon transition to the PoS platform, the energy consumption of Ethereum will drop by a massive 99%.
Although the complete implementation of the Ethereum PoS is months away, the ETH 2.0 Beacon Chain has been running for months now. In its latest blog post, Ethereum’s Carl Beekhuizen notes that the PoS shift will save energy consumed by an entire country.
To estimate the future energy consumption of Ethereum, Carl makes some fair estimates with the number of running validators and unique addresses.
Drop-In Energy Usage by Ethereum PoS
As per Beekhuizen’s estimates, there are around 87,000 at-home stakers that use nearly 100W of energy. This totals to 1.64 megawatts of energy usage. Additionally, he estimates 52,700 exchanges and custodial services that use 100W per 5.5 validators. This amounts to the total energy consumption of 0.98 megawatts.
Based on these estimates, Beekhuizen thinks that the Ethereum PoS network will consume 2.62 megawatts. He further notes that even this estimate could be too large. For e.g. his personal staking has been optimized to use on 15W. On the contrary, some of the validators use as little as 5W. Citing the energy consumption estimates provided by Digiconomist, Beekhuizen notes:
“Ethereum miners currently consume 44.49 TWh per year which works out to 5.13 gigawatt on a continuing basis. This means that PoS is ~2000x more energy efficient based on the conservative estimates above, which reflects a reduction of at least 99.95% in total energy use”.
Besides, he also drew attention to the fact that the Proof-of-Stake (PoS) Ethereum will be nearly 7000 times more energy-efficient than Bitcoin. Energy efficiency remains a key consideration for new projects coming to the market since its working on a large scale can result in major energy consumption.