The transition of the Ethereum network, known as ‘The Merge,’ has significantly altered the blockchain’s energy consumption and environmental impact, according to a detailed report by the Cambridge Centre for Alternative Finance (CCAF). This comprehensive study provides valuable insights into Ethereum’s historical and current ecological footprint, showcasing a crucial shift in the digital asset ecosystem driven by environmental considerations.
Before The Merge, Ethereum’s proof-of-work (PoW) mechanism required substantial energy due to the computational intensity of mining processes, raising environmental concerns. The latest CCAF report highlights this phase as pivotal in understanding Ethereum’s overall environmental impact, addressing the geographical distribution of mining activity, a crucial factor in assessing the network’s environmental footprint.
This complements the findings of a recent study by Cornell University investigators. However, while the Cornell study focused on the impact of Bitcoin on renewable energy projects, the CCAF report delves into Ethereum’s journey, providing a more comprehensive perspective on its ecological implications.
The geographical distribution of mining activity, influenced by Ethereum’s ASIC-resistant protocol design, played a significant role in different regions, such as Europe, contributing notably to the mining landscape. The report estimates that Ethereum’s total greenhouse gas (GHG) emissions from mining were 27.5 MtCO2e until its transition to proof-of-stake (PoS), equivalent to nearly 0.06% of global GHG emissions in 2020.
The Merge marked Ethereum’s shift from PoW to PoS, aiming to enhance scalability and reduce energy consumption. This transition resulted in a remarkable 99.97% reduction in energy use, setting the stage for improved scalability and making Ethereum’s network more sustainable.
Post-Merge, the network’s environmental impact saw a significant reduction in GHG emissions, affirming the success of implementing the PoS mechanism in mitigating the ecological footprint. The CCAF’s research lead, Alexander Neumüller, reflects on the contrasting paths of Ethereum and Bitcoin, emphasizing the commitment of bitcoiners to PoW. He concludes that the different trajectories of Ethereum and Bitcoin not only signify technological advancements but also reflect the diverse ideologies and priorities of their communities, highlighting the complex evolution of leading blockchain networks.