Blockchain Energy Consumption

The estimated total Blockchain technology energy consumption ranges from about 185.14 TWh to 216 TWh. Details on how the total energy consumption was estimated, as well as the key energy consumption drivers, have been provided below. Details on the research strategy have also been provided in the Research Strategy section below.

Key Takeaways

  • The estimated total Blockchain technology energy consumption ranges from about 185.14 TWh to 216 TWh.
  • The move of Ethereum Blockchain from PoW to PoS resulted in a decline in energy use from 23 million megawatt hours the day before the merge to 2,600 megawatt hours per year.
  • The major energy consumption driver for Blockchains is by far the trustless consensus mechanism that is based on PoW.

Blockchain Energy Consumption

  • According to the United States Office of Science and Technology Policy (OSTP), the total electricity consumption from mining Bitcoin and Ethereum annually is about 300 TWh.
  • ETH Source
  • However, the OSTP estimate was based on data from May 2022, before the Ethereum Blockchain moved from proof of work (PoW) to proof of stake (PoS) on September 15, 2022.
  • The move from PoW to PoS resulted in a decline in energy use from 23 million megawatt hours the day before the merge to 2,600 megawatt hours per year.
  • Ethereum Blockchain now uses about 0.01 TWh per year since the merge.
  • According to Digi Conomist, Bitcoin Blockchain energy consumption is about 129.61 TWh.
  • The White House estimates that Bitcoin accounts for 60 to 70% of “total global crypto-asset electricity usage” in August 2022.
  • If we also assume that the Bitcoin Blockchain also accounts for 60 to 70% of the total Blockchain energy consumption, it would mean that total Blockchain energy consumption will range from about 185.14 TWh ((196.61 * 100)/70) to 216 TWh ((196.61 * 100)/60). btc
    Source

What Drives Energy Consumption for Blockchain

  • The major energy consumption driver for Blockchains is by far the trustless consensus mechanism that is based on PoW.
  • The other major energy consumption drivers are the storage of the Blockchain and coordination of messages sent over the internet.
  • Energy is also consumed in “validating new blocks and updating their local databases accordingly” in the Blockchain.
  • According to an analysis by the Swiss Federal Institute of Technology Zurich, while the PoW mechanism “can be responsible for over 100 TWh per year, the storage of the blockchain requires over 4-6 orders of magnitude less energy (30 MWh – 3 GWh) and the coordination messages sent across the Internet over 7 orders of magnitude less (6 MWh).”
  • Blockchains deploying a PoS mechanism for its trustless consensus consume very low energy.
  • The chart below shows how the energy consumption of Ethereum dropped drastically after it moved to PoS from PoW: Ethereum
    Source

Research Strategy

For this research on the Energy Consumption of a Blockchain, we leveraged credible sources from government databases, industry and media reports, and academic research databases such as Springer, ARXIV, Decrypt, White House, Digiconomist, and the Swiss Federal Institute of Technology Zurich. While we were able to find data on the energy consumption of the Bitcoin and Ethereum, the two major Blockchains, data on the overall energy consumption of Blockchains was unavailable. According to researchers, the reason why getting a reliable estimate for Blockchain energy consumption, in general, is difficult is that “blockchain technology is far from homogeneous, meaning that blanket statements about its energy consumption should be reviewed with care.” Hence, we have provided an estimate of the overall Blockchain technology energy consumption using estimates from Bitcoin, which is the Blockchain technology that consumes the most energy. We did this by ascertaining the amount of energy consumed by the Bitcoin network and then finding estimates of the percentage of energy consumed by Bitcoin in relation to other Blockchains. We were only able to find data on the percentage in relation to other crypto-assets and have assumed that the same percentage will likely apply to Blockchains in general. We then used the calculation (((Total Energy Consumed by Blockchain * 100)/Percentage of total Blockchain Energy consumed) to determine total energy consumption.

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This research project was made possible by Brale.

Published by V-Sum

We're a group of curious people who strive to understand a little bit more everyday about how value works on the internet.