After The Merge, Ethereum’s energy consumption dropped by an estimated 99.95%, making it a greener blockchain. This took place on September 15th, 2022 and changed the way the Ethereum network reaches consensus.
Blockchain platform Digiconomist estimates that in a Proof-of-Work (PoW) setup, Ethereum miners will consume 44.49 terawatt-hours (TWh) annually, up to 5.13 gigawatts on an ongoing basis. This means that Proof-Of-Stake (PoS) is 2000 times more energy efficient based on the conservative estimates above. “Scaling solutions (such as rollups and sharding) can help further reduce the energy consumed per transaction by leveraging economies of scale,” said Wize Tokenization Founder and Director. Saurav Raaj told his FE Blockchain.
A recent report by the Crypto Carbon Rating Institute (CCRI) compared the energy depletion to that of the shrinking Eiffel Tower. This is also the size of a Lego toy.
Source: ethereum.org
According to industry experts, Merge uses 99.5% less energy compared to older protocols. However, the merger is not intended to affect or reduce gas prices. A gas fee refers to the price of a transaction on the blockchain network. “So the gas price is the product of network demand over the capacity of the network. Merger has moved Ethereum from his PoW to PoS consensus. It does not affect network capacity or throughput,” Raaj said. Added.
However, to benefit from reduced gas prices, users can leverage Layer 2 and other scaling solutions to expand the capacity of the Ethereum network. As a secure decentralized payment layer optimized for rollup data storage, we make rollup transactions exponentially cheaper by scaling user activity on our Layer 2, Layer 1 mainnet.
Meanwhile, Swarup Gupta, financial director of the Economic Intelligence Unit, said Ethereum will continue to operate as a single network due to changes in the blockchain protocol, and no data or transaction history will be lost. Additionally, PoS he validators are responsible for handling the validity of all transactions and proposing blocks,” said Rahul Kapoor, co-founder of CryptoRunners.
Merge’s main goal was to reduce energy consumption by an estimated 99.95%. This upgrade makes the blockchain environmentally, social, and governance (ESG) friendly. “These upgrades will be phased and are expected to make Ethereum more accessible to end-users by offering fewer transactions and higher throughput,” Raj added.
Meanwhile, the next upgrade, codenamed Shanghai, is due in about six months and will add sharding as a scaling solution and enable more layer 2 blockchains. It is further expected that this will not only make it easier for users to operate the nodes that secure the Ethereum network, but also reduce the cost of rolled-up or bundled transactions. Additionally, this makes it attractive against Ethereum Killers such as Solana.
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