"The merge will reduce worldwide electricity consumption by 0.2%" Ethereum blockchain co-founder Vitalik Buterin noted. Merge reduced Ethereum's energy consumption by 99.988% and carbon dioxide emissions by 99.992%.
The long-awaited Ethereum Merge kicked crypto miners out of the game and abolished the proof-of-work (PoW) system in favor of the proof-of-stake (PoS) mechanism. The amount of power consumed by PoW, which is how Bitcoin and other blockchains still work, has come under heavy scrutiny from lawmakers and policymakers around the world.
Before the switch to PoS, a single Ethereum transaction used 200.05 kilowatt-hours (kWh) of electricity, which, according to estimates and a new report from the Crypto Carbon Ratings Institute (CCRI), is comparable to the amount of energy used by the average American household in 6- 7 days.
One of the biggest decarbonization events ever?
"We're delighted to have commissioned this report from CCRI, which substantiates the Ethereum Merge's impact as likely the biggest decarbonization effort of any industry in history," ConsenSys founder Joseph Lubin, who also co-founded Ethereum, said in a statement.
Bitcoin still uses PoW, drawing criticism from environmentalists and policymakers. However, some bitcoin advocates argue that bitcoin mining uses a greater mix of renewable energy than other industries and can actually help the world transition to cleaner energy.
"Under the new paradigm, decentralized networks can operate with lower fixed costs, and become more flexible for larger-scale solutions beyond just currency and financial applications," Al Morris, co-founder of Web3 firm Koii Network, told Insider earlier this week.
Michael Saylor, the co-founder of MicroStrategy, said on Wednesday that bitcoin mining is “the most efficient, cleanest industrial use of electricity”. The merger could not only help the environment, but it could also attract more money to Ethereum from ESG investors – those who invest only in companies and industries that achieve certain environmental, social, as well as corporate governance goals.
However, miners who were mining ether (ETH) before the merger have now switched to mining other PoW-based digital assets such as Ethereum Classic, Ravencoin, and Beam.