With the upcoming Ethereum update known as “the merge”, the cryptocurrency is set to abandon its proof-of-work consensus and adopt proof-of-stake. Meaning that Ethereum will significantly decrease its energy use after the update makes mining the cryptocurrency obsolete.
The merge will leave Bitcoin as by far the cryptocurrency with the biggest energy consumption in the world.
However, this position might not hold for very long.
According to a recent analysis by BatCoinz, Bitcoin is predicted to achieve net zero emission by December 2024, making it the first monetary system to accomplish the feat.
By taking carbon-negative mining into account, the study found that the Bitcoin network currently has 62.4% zero emissions. Based on recently announced carbon-negative initiatives, the activity is anticipated to have 72.7% zero emissions by March 2023.
According to the research, BatCoinz first estimated the amount of Bitcoin energy coming from sources with positive carbon, from which they then deduced the quantity of positive carbon.
In order to balance the negative carbon amount, the researchers also reverse-engineered to determine how much methane would need to be removed from the air through combustion.
The study anticipates that Bitcoin mining employing vented methane as energy “will initially grow at only 83% of the growth rate of flared gas mining (6.9 MW/month).”
It was also found that forecasts indicate that the Bitcoin network will fully achieve carbon neutrality in Q4, 2024 due to its slow development rate.
Current Bitcoin Energy Consumption
According to estimates, Bitcoin uses 127 terawatt-hours of power annually (TWh).
The amount used exceeds Norway’s whole yearly electricity consumption. In fact, Bitcoin needs 707 kWh of power for every transaction, 11 times more than Ethereum pre-merge.
Although the environmental impact of cryptocurrencies isn’t unique to Bitcoin, its widespread use and particularly ineffective consensus method make it an easy target. However, the underlying blockchain technology may hold the key to a future with less impact on the environment.
It isn’t the Cryptocurrency in itself to blame for the high energy consumption, but rather the proof-of-work consensus is the step that requires the most energy.
In order to verify a transaction, Bitcoin requires computers to solve complex mathematical problems. This process usually requires good computers with powerful graphics cards in order to complete the transaction verification mechanism.
As a reward, payment in Bitcoin is given to the computer that completed the process, this is known as “mining” in cryptocurrency.