Cambridge will start tracking Ethereum energy data with Bitcoin

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While crypto is moving so quickly it may seem like an eternity ago, Ethereum’s transition from proof-of-stake to proof-of-work continues to generate new research into the power consumption of blockchain networks, most recently from the University of Cambridge.

The Cambridge Center for Alternative Finance (CCAF), best known for its Bitcoin energy consumption dashboards and research at the Cambridge Judge Business School, unveiled its Cambridge Blockchain Network Sustainability Index (CBNSI) on Wednesday.

The tool explores the environmental implications of the merger while comparing Bitcoin to Ethereum, the two largest cryptocurrencies by market cap. It also represents organizations’ foray into publishing dashboards for proof-of-stake networks. Bitcoin and Ethereum once relied on a proof-of-work mechanism to validate transactions, where computers constantly perform complex calculations in hopes of earning tokens as rewards. But last summer, Ethereum finally moved to proof-of-stake, where transactions are verified by players who have pledged tokens to a network, often in the form of staking.

While the Ethereum Foundation was quick to say that the transition made Ethereum 99.95% more energy efficient, according to CCAF research, Ethereum’s energy consumption dropped by 99.99% after the transition. merger.

Using height as an analogy, the research compares Bitcoin’s current energy consumption to Ethereum, both before and after the merger.

If Bitcoin’s power consumption was represented by Malaysia’s Merdeka 118, the world’s second tallest building at 679 meters, Ethereum’s pre-merger power consumption would have been the London Eye at 135 meters about five times smaller. To continue the analogy, CCAF writes that the post-merger Ethereum network could be represented by a raspberry, or 1.5 centimeters.

However, the researchers noted that electricity consumption does not fully describe the carbon footprint of networks. It fails to capture the greenhouse gas emissions related to its computing power, the researchers wrote.

The tool marks the latest research produced under the Cambridge Digital Assets Program (CDAP), a research initiative hosted by the CCAF in collaboration with organizations such as the International Monetary Fund (IMF), according to a blog post. The initiative is also carried out in collaboration with a few established financial institutions, such as Fidelity, Goldman Sachs, Invesco, Mastercard and Visa.

The tool also provides energy estimates for Bitcoin and Ethereum which are updated daily. At each network’s current rate, the index estimates Ethereum’s annualized power consumption at 5.8 gigawatt hours, compared to around 132.2 terawatt hours for Bitcoin.

The power consumption of blockchain networks has been a controversial topic for years. And the conversation around Bitcoin’s carbon footprint has intensified over the past month, following a New York Times expose on Bitcoin mining and an artwork supported by Greenpeace titled Skull of Satoshi.

When the Cambridge Electricity Index for Bitcoin was released in 2019, Cambridge researchers acknowledged that measuring the energy consumption of Bitcoins was a better estimate, explaining that it was difficult to measure reliably. due to constant fluctuations.

Likewise, the artist behind Satoshi’s skull said the energy consumption conversation surrounding bitcoin is not black and white, after engaging in conversations with people who think bitcoin mining supports the demand for greener energy sources and helps give purpose to what would be wasted. energy.

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