How Much Energy Is Used When You Send One Ethereum?

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Ethereum, as a cryptocurrency, ranks second in the world only to Bitcoin and is very popular in its own right. While many may view it as Bitcoin’s younger brother, ETH does more than hold its own. This is one of the reasons why services such as Luno and their Ethereum wallet is growing in popularity all over the world. The currency’s market capitalisation is reportedly above the $10 billion threshold, however, with that also comes a large energy footprint.

For every transaction made, 29 kWh of energy is used; and last year this equated to Ethereum consuming as much energy as the whole of Iceland. One single transaction absorbs as much power as the average household in the United States of America does in a day, and this is way too much.

The man behind Ethereum, Vitalik Buterin, has also spoken out on the topic of energy consumption. He said, “That’s just a huge waste of resources, even if you don’t believe that pollution and carbon dioxide are an issue. There are real consumers – real people – whose need for electricity is being displaced by this stuff.”

With that in mind, plans are afoot to reduce the amount of energy used by Ethereum moving forward. Buterin and the Ethereum Foundation are attempting to completely overhaul the entire code by the end of 2019, and if things go as expected, transactions would only use 1% of the energy they currently consume today.

While Ethereum relies on a blockchain just like Bitcoin, the aim for Buterin when creating the cryptocurrency was for it to be capable of a lot more than acting as a decentralised ledger. His goal was for Ethereum to work as a decentralised global computer, one which couldn’t be affected by things such as cybercrime and downtime.

While Buterin’s visions have yet to come to fruition, Ethereum’s ability to do more is one of the reasons why it has become so popular since release, and therefore why the energy consumption rate is hitting the levels it does. As things stand, Ethereum is consuming more power than its producing benefits for users, and this has been a concern.

Ethereum mining is what is currently the biggest sap on energy, with proof of work (PoW) the method in use. The positive aspect of PoW is that the mining is distributed fairly, so one user cannot take control of the whole ledger. However, Ethereum deployed an algorithm that takes things one step further to prevent against mining being accelerated using custom made chips known as ASICs, and it’s this which has made the task more memory intensive, so inevitably it uses more energy.

So, Buterin’s plans to lower the energy consumed will be a welcome relief to everyone, especially environmentalists. From the very beginning the idea was for Ethereum 2.0 to be created where power used would be slashed, and it remains the number one priority as things stand. If this 2.0 version can be up and running before the start of 2020, it will also undoubtedly send out a big message to rivals such as Bitcoin, who continue to absorb too much power.