The Cambridge Centre for Alternative Finance (CCAF) has unveiled a blockchain network sustainability index (CBNSI) that explores the environmental implications of Ethereum’s transition from proof-of-work to proof-of-stake, comparing it to Bitcoin. According to CCAF, the energy consumption of Ethereum plummeted by 99.99% after the transition, making it 99.95% more energy-efficient. The tool provides daily energy estimates for both cryptocurrencies, with the index estimating annual power consumption for Ethereum as 5.8 Gwh compared to around 132.2 Twh for Bitcoin. The CBNSI is the latest research produced under the Cambridge Digital Assets Programme (CDAP), in collaboration with institutions such as Goldman Sachs, Fidelity, Visa, Mastercard, and Invesco, as well as the International Monetary Fund (IMF). However, while the tool correctly identifies electricity consumption as a key factor influencing a blockchain network's energy consumption levels, it fails to capture the greenhouse gas emissions linked to computing power. CCAF previously acknowledged that the measure of Bitcoin's energy consumption was a "best guess," due to constant fluctuations, that make it challenging to measure reliably.

(By André Beganski)