A recent study from the University of Cambridge has revealed that the Ethereum blockchain’s greenhouse gas emissions, prior to its major software upgrade in 2022, were comparable to the yearly emissions of Honduras.
High Energy Consumption of Blockchains
Blockchains, the foundational technology behind cryptocurrencies, are known for their significant energy consumption due to coin production and transaction processing. This aspect has drawn criticism from environmentalists and some investors. However, measuring the crypto sector’s environmental impact is challenging due to its opacity and decentralized nature.
Ethereum’s Major Software Upgrade
In September 2022, Ethereum underwent a substantial upgrade called the “Merge,” which significantly lowered its energy use. From its inception in 2015 until the Merge, Ethereum’s greenhouse gas emissions amounted to 27.5 million tonnes of carbon dioxide equivalent (MtCO2e). For comparison, Honduras emitted 27.7 MtCO2e in 2020, as per Climate Watch data.
Post-Merge Energy Efficiency
After the Merge, Ethereum now operates with over 99% less energy consumption, according to developers. Its current annual emissions stand at approximately 2.8 kilotonnes carbon dioxide equivalent – akin to five round-trip flights between London and New York.
Comparative Analysis with Bitcoin
The study, deemed one of the most comprehensive assessments of Ethereum’s historical emissions, also compared Ethereum’s emissions to Bitcoin. Bitcoin, the largest blockchain and cryptocurrency, generates about 73.9 MtCO2e annually, which is roughly equivalent to Cambodia’s emissions in 2020.
Ethereum’s Environmental Impact Post-Upgrade
Anna Lerner, executive director at the Ethereum Climate Platform, stated that Ethereum’s transition demonstrates that blockchain technology doesn’t necessarily have to be a significant polluter. The platform is dedicated to leveraging blockchain technology to accelerate climate finance.
Global Context and Crypto Tokens
This revelation comes as global leaders gather for the COP28 climate summit in Dubai, where energy efficiency in industry is a key topic. Despite their popularity as investment tools, crypto tokens like Bitcoin and Ether have limited practical usage in business or commerce.
This study highlights the evolving nature of blockchain technology, particularly regarding its environmental impact, and underscores Ethereum’s efforts to reduce its carbon footprint.