The energy consumption of blockchains

The energy consumption of blockchains, particularly Bitcoin, has been the subject of widespread debate for years. The mining process, which is essential for securing the network and validating transactions, requires large amounts of energy. According to the University of Cambridge's Bitcoin Energy Consumption Index, Bitcoin's annual consumption was estimated at the end of 2023 to be around 169 TWh, comparable to that of countries like Egypt.

However, it is important to stress that not all blockchains are equal in terms of energy consumption. For example, Ethereum, the second largest blockchain, migrated to a Proof of Stake (PoS) consensus model in 2022, which has significantly reduced its energy footprint (by more than 99%). This is because PoS makes it possible to secure the network and validate transactions without requiring high computing power, unlike the Proof of Work (PoW) used by Bitcoin.

Beyond these two giants, there are hundreds of blockchains using various consensus mechanisms, each with a different impact on energy consumption. Layer 2 technologies, such as the Lightning Network for Bitcoin or rollups for Ethereum, also offer ways of carrying out transactions more energy efficiently, by processing some transactions outside the main blockchain.

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