Vitalik Buterin said via Twitter that the Ethereum Merge has reduced global energy use by 0.2%, one of the biggest decarbonization events ever.
Vitalik Buterin’s big “green” move: “The Merge”
With a tweet on his profile on 15 September, the day of the official launch of Ethereum’s new Merge update, founder Vitalik Buterin said that the new update will reduce global electricity consumption by 0.2%.
"The merge will reduce worldwide electricity consumption by 0.2%" – @drakefjustin
— vitalik.eth (@VitalikButerin) September 15, 2022
According to many experts, this would be the biggest energy-saving and sustainability event ever. As anticipated for months, the new upgrade would reduce Ethereum’s power consumption by 99.9% and carbon dioxide emissions by 99.992%.
The decrease means that the network now emits less carbon dioxide (CO2) than a few hundred US households do during an entire year of electricity consumption, according to a new report by the Crypto Carbon Ratings Institute (CCRI). This is an important first step toward the sustainability that has long been required of a highly energy-intensive industry like crypto.
It is enough to consider that Bitcoin consumes about 707 kWh of electricity per transaction, which is 11 times that of Ethereum. By 2022, the average energy consumption per Bitcoin transaction may be comparable to hundreds of thousands of Visa card transactions. According to some recent calculations, Bitcoin mining each year consumes the same amount of energy as a country like the Netherlands or Argentina.
Ethereum’s transition to Proof of Stake
Before its switch to the PoS consensus system, a single Ethereum transaction used about 200 kilowatt-hours (kWh) of electricity, comparable to what the average US household consumes in six days.
The Merge, which changed the consensus system from Proof of Work, used by Bitcoin, which is very energy-intensive and unsustainable to Proof of Stake, which reduces electricity consumption by 99.9%.
ConsenSys founder Joseph Lubin, who also co-founded Ethereum, said:
“We’re delighted to have commissioned this report from CCRI, which substaniates the Ethereum Merge’s impact as likely the biggest decarbonization effort of any industry in history.”
On the energy consumption and sustainability factor of cryptocurrencies, even Elon Musk had intervened in the past, which is why he decided not to allow Bitcoin payments for his cars, as previously intended.
In late 2021, Musk had revealed:
“Cryptocurrencies are a good idea in many ways and we believe they have a promising future, but this cannot be pursued at the expense of the environment.”
Crypto mining in the world, different sources of energy
To address this issue, many cryptocurrency miners have decided to use energy from renewable sources to make their operations more sustainable, including geothermal energy, as El Salvador would like to do by harnessing the energy of its many volcanoes in the country. But the results so far have been modest, and at a time when the cost of energy has skyrocketed, the problem is becoming increasingly urgent.
For this reason, many Bitcoin miners have moved to places like Texas or Kazakhstan, where abundant raw materials allow for still relatively low energy costs.
However, life for cryptocurrency miners, especially in light of the new upgrade operated by Ethereum, is sure to become increasingly difficult. Ethan Vera, chief operations officer of mining services company Luxor Technologies, tweeted last week that “20% -30% of ETH miners have found a new temporary home among other blockchains, the rest are closed.”
In total it looks like about 20-30% of ETH miners have found a temporary new home amongst other blockchains, the rest are shut down.
— Ethan Vera (@ethan_vera) September 15, 2022
The same executive order signed by Biden in March contained specific guidance on the excessive energy consumption of mining in the United States. Many countries have already banned or otherwise severely restricted mining because of its excessive energy consumption. But the mining farms themselves, in order to obviate rising energy costs, seem to have opted to join forces in larger and larger farms, which can then have economies of scale that can lessen the burden of the onerous electricity costs of their machines.
The $3.3 million heist
As Ethereum celebrates the successful official launch of what some say could be the innovation destined to fundamentally change the entire cryptocurrency industry, a hacker reportedly embezzled $3.3 million from multiple Ethereum addresses two days ago, using a new system called Profanity.
It appears that the hackers took advantage of a flaw in the system related to so-called ” vanity addresses.” These addresses would suffer from a vulnerability that allowed hackers to extract private keys, according to an earlier 1inch report.
The $3.3 million theft raised many eyebrows, partly because it occurred the day after the new update. Many cyber security experts said they suspect that malicious hackers may have been aware of the security problem in advance.
Tal Be’ery, chief security officer and chief technology officer of ZenGo, said:
“Seems like the attackers were sitting on this vulnerability, trying to find as many private keys as possible of vulnerable Profanity-generated vanity addresses before the vulnerability gets known. Once publicly exposed by 1inch, the attackers cashed out in a few minutes from multiple vanity addresses.”
The security issue had already been highlighted as a possible risk of the new update, although opinions on this issue were quite divided as many argued that instead the new system would make it much more difficult for attackers to work. But this hack could raise new doubts about network security.