- Bitcoin’s annual electricity consumption is more than Norway’s 124 TWh and more than twice the level of Bangladesh’s 70 TWh.
- The hope is that switching to Proof-of-Stake will cut Ethereum’s energy output by 99 percent.
- We started by looking at the attached Crypto Wisser data, which ranks the top 100 crypts in terms of energy use.
When people hear about cryptocurrencies, one of the first things they say is how horrible they are for the environment. This story has gained traction in the mainstream media, as evidenced by the examples provided in this article. Whereas the most frequent anti-crypto argument five years ago was that it’s just a hidden, anonymous network used by criminals on the dark web, today the most common complaint is unquestionably the anti-environmental perspective.
Mechanisms Of Agreement
Is this, in fact, the case? Is cryptocurrency causing our oceans to boil? Let’s have a look. We started by looking at the attached Crypto Wisser data, which ranks the top 100 cryptos in terms of energy use. As a result, a high rank suggests high energy consumption, whereas a low rank indicates low energy consumption (i.e. rank 100 means the most energy intensive crypto in the top 100, rank 1 means the least energy intensive).
We built the graph below by filtering the data by consensus algorithm to see which sort of mechanism consumes the most energy. The outcomes are clear: Proof-of-Work systems are clearly the most energy-intensive, whereas Proof-of-Stake blockchains are the least energy-intensive.
You’ve probably heard of Bitcoin and Ethereum, the two most popular Proof-of-Work cryptos. However, Ethereum will shortly (well, we say soon) switch to a Proof-of-Stake blockchain. The merger has been frequently postponed, but it is widely expected to go place this year). The hope is that switching to Proof-of-Stake will cut Ethereum’s energy output by 99 percent, allowing it to slide further down the list in our graph.
With this Ethereum migration in the works, as well as the projected energy savings, we’ll be concentrating our efforts on Bitcoin. Let’s try to answer one of the most frequently asked questions in the crypto world: how harmful is Bitcoin for the environment? The act of producing Bitcoin to spend or trade consumes roughly 91 terawatt-hours of electricity yearly, more than Finland, a nation of about 5.5 million, the New York Times stated in September 2021.
Bitcoin’s annual electricity consumption is more than Norway’s 124 TWh and more than twice the level of Bangladesh’s 70 TWh, according to a Forbes story published four months earlier on May 21. Three months previously, the BBC published the startling statistic that Bitcoin consumes more electricity yearly than the entire country of Argentina.
They certainly make for compelling headlines, and the entertaining facts, at least in our experience, become frequently repeated rhetoric. However, upon more investigation, we discovered that all of these publications comparing Bitcoin’s massive electricity use came from the same place: The Cambridge Bitcoin Electricity Consumption Index.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.