Ethereum completed the switch to a Proof-of-Stake consensus system earlier this year, here’s how much energy is being saved thanks to the Merge.
Ethereum PoS Merge Reduced Energy Consumption By 99.84% To 99.99%
As per a new paper published by Patterns, the energy saved due to the Merge is on the scale of power consumed by countries such as Ireland and Austria.
Before the merge, the Ethereum mainnet used to run on a Proof-of-Work (PoW) consensus mechanism in which “miners” acted as nodes and handled transactions on the network.
Mining on the ETH blockchain was a power-intensive process, and required miners to use computing devices like graphics cards and specialized AISC machines.
Consumer-based GPUs, which was likely what a large part of the miners had, are power-inefficient when it comes to mining. Individual miners sometimes had hundreds of these cards in a single facility.
As Ethereum mining became more popular and the hashrate (the total amount of power connected to the network) rapidly grew, concerns increasingly began to be raised around the energy consumption of the chain, and the environmental effect of it.
To alleviate the problem, ETH community decided to switch to a Proof-of-Stake (PoS) consensus system. Unlike PoW, networks with this mechanism don’t use miners that compete with each other using computing power.
Rather, here the nodes, called the “stakers,” only have to lock some amount of coins (at least 32 ETH to be specific) in the staking contract and need a low power computing device to become a validating node on the network.
On September 15 of this year, the Merge took place and successfully completed Ethereum’s transition to a PoS-based system.
As for the actual amount of power used by the network before the Merge, the study cites several estimates based on various scenarios.
Estimates of ETH power consumption under different conditions | Source: Patterns
Making the assumption that all miners used the most-efficient mining machine available, Ethereum’s pre-PoS power consumption comes out to be around 418 MW.
However, as mentioned before, not many miners actually used the efficient AISC machines; GPUs were more popular. Using the highest end GPU available before the Merge (the Nvidia RTX 3090Ti) puts the power estimate at 2.23 GW, significantly higher than the other figure.
In reality, miners used a mixed variety of mining rigs and there were also other power expenses involved like cooling in the facilities, which means the actual value should be much higher than this.
“A tracker by Kyle McDonald estimated Ethereum’s power demand at 2.44 GW before The Merge,” notes the report.
In the worst scenario, where miners broke just even on their mining and made no profits, the approximate power used comes out be 9.21 GW.
Compared to these extremely large numbers for energy consumption prior to the Merge, the study puts post-PoS power lower bound at 36 kW and upper bound at 675 kW.
This means that the PoS switch has reduced the power usage by a whopping 99.84% (in the best-to-worst case scenario) to 99.99% (assuming the worst-to-best case).
“In absolute terms, the reduction in power demand could be equivalent to the electrical power requirement of a country such as Ireland or even Austria,” the paper puts into perspective.
At the time of writing, Ethereum’s price floats around $1.2k, down 3% in the last week.
ETH seems to have declined in the last 24 hours | Source: ETHUSD on TradingView
Featured image from Zoltan Tasi on Unsplash.com, charts from TradingView.com, Patterns