On 15 September 2022 the Ethereum network replaced proof-of-work with proof-of-stake in an event codenamed the Merge. The switch slashed annual electricity demand from 21.4 TWh to 2.6 GWh, a reduction of 99.988 percent. The network now emits roughly 870 t of carbon dioxide each year, the same output as a single U.S. hospital.

Ethereum is an open source protocol that hosts smart contracts, non fungible tokens along with decentralized applications. As of 27 May 2024 its native token ether trades at a market capitalization of four hundred sixty six billion dollars. Miners no longer compete for block rewards – instead, validators post thirty two ether as collateral and receive priority for block production in proportion to their stake.

A single validator hashes a block and attests to its validity. The process consumes 2.5 × 10⁻⁴ kWh, less energy than a standard LED bulb uses in ten minutes. Under proof-of-work the same task required the equivalent of a U.S. household’s daily electricity consumption.

Transaction fees rose during 2020 as decentralized finance protocols and stable-coin transfers saturated the network. Users attached escalating tips to outbid one another – median fees peaked at sixty eight dollars on 12 May 2021.

EIP-1559 introduced a base fee that burns ether and a discretionary priority fee. The mechanism stabilized fee volatility but did not lower absolute costs – users continued to attach large tips to accelerate inclusion.

Important

The Merge reduced absolute energy use by 99.988 percent. Planned upgrades will raise execution throughput and further shrink the carbon footprint.

The Merge altered consensus rules, not execution rules. Block intervals remain fixed at twelve seconds – transaction throughput stays at fifteen theoretical million gas units per second. Verkle trees in addition to stateless clients will raise capacity to one hundred thousand transactions per second without enlarging the validator set.

The Ethereum Foundation publishes continuous telemetry. The network draws 2.6 GWh per year. Bitcoin consumes 149 TWh per year. Global data centers consume 190 TWh per year. U.S. video game consoles consume 34 TWh per year. Google consumes 19 TWh per year.

The Cambridge Centre for Alternative Finance surveyed validator hosting providers in 2023. Forty-eight percent of the network relies on hydro, wind, solar, or nuclear power. Thirty percent relies on natural gas. Nineteen percent relies on coal. Three percent relies on oil.

Ethereum emits 0.17 g CO₂ per transaction. Visa’s data centers emit 1.53 g CO₂ per transaction. A single Ethereum transaction under proof-of-stake therefore produces nine times less carbon than a Visa authorization.

Fast Fact

The U.S. Securities but also Exchange Commission approved nine spot ether exchange traded funds on 23 May 2024. Trading began on NYSE Arca, Nasdaq next to Cboe BZX on 30 July 2024.

Activated on 13 March 2024, introduced EIP-4844. The proposal enables rollups to post compressed data blobs to the beacon chain. Each blob costs one gas unit per byte, a ninety five percent discount compared with calldata.

Proto-danksharding lowers rollup transaction fees from one dollar to one cent. Full danksharding will add sixty four blobs per block and raise data throughput to sixteen MB per twelve second slot.

Danksharding will support one hundred thousand simple transfers per second. Energy use per transaction will fall below 0.001 kWh, the same order of magnitude as a single DNS query.

Future hard forks will address censorship resistance, state growth, fee predictability.

Lower fees expand validator diversity. Home-stakers operating on consumer hardware increase from twenty two percent to thirty seven percent of the active set.

Web3 applications – decentralized social networks, on chain gaming along with zero-knowledge identity systems – run on Ethereum. Each application inherits the base layer carbon intensity. Aggregate energy use therefore scales with adoption, not with validator count.

If Ethereum hosts the majority of Web3 traffic, total electricity demand will remain below 0.01 percent of global consumption.

Does Ethereum Use Energy?

Yes. A distributed network of eight hundred thousand validators secures the ledger. Each validator runs a client that consumes twenty five watts, comparable to a residential Wi-Fi router.

Is Ethereum Environmentally Friendly?

Ethereum emits 0.17 g CO₂ per transaction. Forty-eight percent of the electricity that powers the network originates from renewable sources.

How Much Energy Did Ethereum Use Before the Merge?

The network consumed 21.4 TWh per year and emitted 10.26 Mt CO₂ per year.

Ethereum has reduced its carbon footprint by four orders of magnitude. Planned upgrades will raise throughput to one hundred thousand transactions per second and cut per transaction energy use to one milliwatt hour. The protocol now ranks among the lowest emission financial settlement layers in operation.