It has been widely reported that the world’s second-largest crypto protocol, Ethereum, consumes significantly less energy than traditional financial and corporate establishments, according to a recent study conducted by the University of Cambridge. The study compared Ethereum’s annual energy consumption to that of various legacy-based businesses, revealing the blockchain network’s remarkable energy efficiency.
According to the Cambridge Blockchain Network Sustainability Index report, Ethereum’s annual energy consumption stands at 7 Gigawatts per hour (GWh), 28 times lower than that of American Express, which operates on 202.73 GWh. It is also significantly less energy-intensive than Deutsche Bank, which utilizes 437 GWh. These findings highlight the sustainability and reduced impact on the environment associated with Ethereum’s operation.
When considering assets under management (AUM), Deutsche Bank controls over $820 billion, while Ethereum commands more than $350 million. Surprisingly, the Deutsche Bank consumes approximately 25 times more energy per dollar managed compared to the Ethereum blockchain network. This stark contrast further solidifies Ethereum’s superiority in terms of energy efficiency and sustainability.
Apart from traditional financial institutions, Ethereum also surpasses other industries in terms of energy consumption. For instance, the blockchain network is more energy-efficient than the popular streaming service, Netflix, which consumes 123 GWh annually. Additionally, Ethereum is over 30 times less energy-intensive than the Burj Khalifa, the world’s tallest skyscraper, which requires a staggering 243.4 GWh to power its immense structure. These comparisons demonstrate Ethereum’s ability to minimize energy usage while maintaining optimal performance.
The Cambridge report unveils that Ethereum’s 7 GWh energy consumption can only power its campus for 19 days. To put this into perspective, it would take the energy requirements of 676 air conditioners or cater to the power needs of 1,969 average households for a year. Moreover, the energy output of 7 GWh would only be depleted by a Tesla Cybertruck covering a total distance of 17.1 million units. These figures underline the sustainable and efficient nature of Ethereum’s energy consumption.
Ethereum’s commendable energy efficiency is a result of its switch from the proof-of-work (PoW) consensus algorithm to the proof-of-stake (PoS) mechanism. Previously, the validation of transactions and the creation of new Ether assets relied on a distributed network of miners competing for priority. However, with the implementation of PoS, Ethereum now requires validators to stake a minimum of 32 Ether coins to verify transactions. This shift eliminates the energy-intensive mining process, enabling the network to operate optimally with minimal energy consumption.
As the central hub for decentralized finance (DeFi), Ethereum has attracted over 2,000 decentralized applications (dApps) to its ecosystem. With a current market share of 19% in the crypto market, Ethereum has tremendous potential to become a leading contender for the crypto throne. The recent introduction of the decentralized Verifiable Random Function (dVRF) service on the Ethereum mainnet by SupraOracles further strengthens Ethereum’s prospects. The dVRF allows blockchain protocols to securely access real-world information, authenticated by a pool of reputable data providers.
SupraOracles joins an expanding collection of decentralized oracle networks (DONs) that enable blockchain services to stay informed about external developments. These networks play a vital role in bridging the gap between blockchains and real-world data, ensuring the accuracy and reliability of information exchanged within the ecosystem.
Ethereum stands as a beacon of energy efficiency and sustainability in the realm of blockchain and decentralized finance. The University of Cambridge report sheds light on the significant disparities in energy consumption between Ethereum and legacy-based businesses like American Express and Deutsche Bank. As Ethereum continues to evolve and attract more users and applications, its efficient energy consumption will contribute to a greener and more sustainable future for the crypto industry.