Ethereum Energy Revamp Is No Guarantee of Global Climate Gains
This year's revamp of the Ethereum blockchain to curb its power use by an estimated 99% was hailed as a seminal step toward making the cryptocurrency sector greener but a new analysis indicates the reality is a little more complicated.
Overall power savings and climate gains are likely to be curbed if the electricity-hungry computers that previously helped to operate the network have been repurposed to mine other energy-intensive tokens, according to a paper published Tuesday in Cell Press journal Patterns by Alex De Vries, who runs the research platform Digiconomist.
Most of the processing power “used to mine Ethereum could be used on an even broader range of cryptoassets,” De Vries said in the paper. They could also be “repurposed for other energy-intensive operations involving cloud computing, artificial intelligence, or simply for gaming a few hours per day.”
The Ethereum Foundation didn't immediately reply to a request for comment.
The vast amount of electricity consumed by crypto remains a bone of contention given that skyrocketing power costs are denuding household budgets from China to Europe. The White House said in September the environmental impact of producing cryptocurrencies like Bitcoin could impede US efforts to combat climate change, while the European Central Bank has signaled it may tighten oversight.
Digital assets are also reeling from a prolonged rout and a string of blowups at crypto outfits, particularly Sam Bankman-Fried's collapsed FTX exchange. A gauge of the largest 100 tokens has slumped more than 60% in the past year, far oustripping the decline in global stocks.
Ethereum's transition in September to a proof-of-stake from a proof-of-work approach — a shift called the Merge — could
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