Cryptocurrencies will face more scrutiny on their environmental impact after the University of Cambridge released a new open access tool to track electricity usage from cryptocurrencies, starting with Ethereum.
The new Cambridge Blockchain Network Sustainability Index (CBNSI) hopes to provide “cutting edge insights into the current and historical environmental impact of various blockchain networks.”
So far, the tool has tracked electricity consumption from Ethereum, the second largest cryptocurrency by market capitalisation.
The CBNSI’s data tracks Ethereum’s consumption both before and after The Merge.
The Merge took place in September 2022 and moved Ethereum’s proof-of-work model into a proof-of-stake model.
Under a proof-of-work model, currency holders have to ‘mine’ the currency in an energy intensive process. A proof-of-stake model, in contrast, requires participants to put financial resources at stake which is more less resource intensive.
According to the research, there was a 99.99 per cent decrease in Ethereum’s electricity usage after The Merge concluded.
The research also showed that 39 per cent of Ethereum nodes were based in the US while 17 per cent were in Germany.
While the CNBSI does not yet have data on Ethereum’s greenhouse gas emissions, work is underway to translate the consumption data into greenhouse gas emissions. This will allow for a better assessment of Ethereum’s ongoing environmental footprint and historical emissions debt.
Joe Baguley, chief technology officer, EMEA at VMware said: “The Ethereum Merge is a responsible step in the right direction, removing a fundamental environmental barrier to more mainstream adoption.
“But ‘The Merge’ won’t put a plaster on this carbon intensive network, particularly if Bitcoin won’t also overhaul its underlying infrastructure,” he continued.
The project builds off the Cambridge Bitcoin Electricity Consumption Index (CBECI), launched in 2019, which tracks the environmental impact of Bitcoin.
According to its data, Bitcoin consumes more electricity than Ukraine and contributes more to greenhouse gas emissions than New Zealand.
If the electricity consumed by Bitcoin were directed to more productive uses – such as tea kettles in the UK – it would be able to power all kettles used in the UK for the next 30m years.
Executive director of the CCAF Bryan Zhang said “the debate around Bitcoin’s environmental impact demonstrated that we needed to expand the scope of our research to assess other blockchain networks.”
The launch of the CBNSI will provide policymakers with the “necessary foundational data for evidence-based debate to take place” Zhang said.