The spike, which is about 658%, places Ethereum’s power consumption at the same level as the Netherlands. Moneytransfers.com has been following up on the blockchain’s carbon footprint. According to the findings, Ethereum currently produces as much carbon as Serbia and Montenegro. Also, the network’s total electricity consumption is higher than that of several countries.
Ethereum’s PoW protocol to blame
Although blockchain technology brings several advantages, we cannot also downplay the adverse effects, especially the impact on the environment. Proof-of-Work (PoW) blockchains such as Bitcoin and Ethereum are incredibly energy-intensive and cause the most damage.
Such blockchains use a PoW protocol to verify the transactions on the network. The network relies on miners to solve cryptographic puzzles to add new blocks to the chain.
Solving these puzzles, also known as Proofs of Work, requires the miners to use computer hardware with super computational power. And because these supercomputers have to run 24/7 to keep the blockchain live, it’s a given that the energy consumption will be crazy.
Spike in energy consumption result of growth
The crypto and blockchain scene has had an increased global interest over the last few years. The pandemic played a significant factor in ushering more people into the world of digital currencies, which saw the growth of many blockchains.
Ethereum, also known as ‘the programmable blockchain, especially recorded a massive surge owing to the growth of DeFi. The last year has had an almost similar pathway, thanks to the emergence and continued growth of NFTs across different industries.
The exponential growth of the Ethereum network has caused a significant increase in the number of transactions. As a result, miners need even more computational power to verify the transactions, hence the increased energy consumption
Ethereum 2.0 upgrade to solve environmental concerns
Ethereum CEO, Vitalik Buterin, has acknowledged the blockchain’s adverse environmental impacts. In fact, the development team has been working on an upgrade that promises to be more energy-efficient and eco-friendly.
The upgrade, dubbed Serenity, will replace PoW with Proof-of-Stake (PoS) mechanism. This move will eliminate the need for high computational power and reduce the network’s carbon footprint by 99%.
However, the launch has been delayed several times, missing the initially set target of going live by the end of last year. Although it’s still indefinite, analysts predict that the upgrade will happen in the coming few months- a move expected to propel Ether’s price even higher.