Ethereum Energy Consumption Index (beta)

Ethereum Energy Consumption Index (beta)

Ethereum Network Statistics

Did you know?

The Ethereum Energy Consumption Index has been designed with the same purpose, methods and assumptions as the Bitcoin Energy Consumption Index. The details of the latter can be found here. In essence, the following steps are followed in order to estimate the network’s total electricity consumption:

First, the total mining revenues are calculated and converted to USD.
Then it is estimated what part of mining revenues are being spent on electricity costs.
Lastly, the resulting number is easily converted to kilowatt-hours by dividing it by the average price per kilowatt-hour.
The only difference between the two indices is that the average price paid per kilowatt-hour (KWh) for Bitcoin miners is estimated at about 5 cents per KWh, while Ethereum miners are assumed to be paying 12 cents per KWh on average. This is due to the fact that Ethereum runs Ethash, an “ASIC-resistant” proof-of-work algorithm. Application-specific integrated circuits (ASICs) led to the industrialization of Bitcoin mining, while Ethereum mining is done with Graphics processing units (GPUs) found in every home computer. 12 cents per KWh is a typical residential rate.

Sustainability

Ethereum has plans to change its proof-of-work algorithm to an energy efficient proof-of-stake algorithm called Casper. This change would minimize energy consumption and will be implemented gradually according to the latest roadmap. For now, Ethereum is still running on proof-of-work completely. In its current state the entire Ethereum network consumes more electricity than a number of countries, based on a report published by the International Energy Agency. If Ethereum was a country, it would rank as shown below.

Since Bitcoin and Ethereum are by far the largest proof-of-work based coins it is also worth considering their combined ranking.

Comparing Ethereum to other payment systems

To put the energy consumed by the Ethereum network into perspective we can compare it to another payment system like Bitcoin and VISA. The following graph shows the total energy consumption for each of these networks, measured by the total number of U.S. households that could be powered by it.

To put things in an even better perspective we can calculate the energy consumption per single transaction. It can then be shown that this results in a number of KWh that could easily power multiple U.S. households for a full day.

https://digiconomist.net/ethereum-energy-consumption