<aside> 💡 The data shows that Cardano places forth in terms of energy consumption per transaction per node (using total energy consumption and the number of nodes in the network) following Solana, Algorand, and Avalanche. And Cardano places first regarding per single node energy consumption (by actually running a node using a computer with different performance) followed by Polkadot, Tezos, and Algorand.
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One of the serious concerns about the blockchain technology is energy consumption. As explained in Ch.1.1. Proof of Work vs Proof of Stake, the energy usage of Proof of Work (PoW) consensus mechanism is huge and is as well associated with the waste of energy used by all miners other than the winner of solving a math puzzle. According to data, Bitcoin consumes 140.2 TWh per year, which is as large electricity as the total electricity consumption of Ukraina (136.8 TWh) or Sweden (135.6 TWh) as a whole country in a year. The total of energy consumption of Bitcoin and Ethereum is 226.7 TWh per year, which is as large as the total electricity consumption of South Africa (229.0 TWh) or Turkey (220.0 TWh) as a whole county in a year.
According to data by ethereum.org, by shifting from PoW to PoS algorithm, Ethereum uses more than 11,000 times less electricity than that used by PoW. That is, in fact, much less electricity consumption than that used by other industries such as gold mining, gaming, or even an existing digital financial solution (Figure 1).
Figure 1. Comparison of Electricity Usage
Source of Figure 1: https://ethereum.org/en/energy-consumption/
Table 2 below shows the comparison of energy consumption per transaction by chain. It clearly shows that PoS has much better energy efficiency than PoW consensus mechanism. Although the difference between PoS algorithms is minor, there exists certain variation of the energy efficiency among chains which apply PoS consensus algorithms. In terms of the energy consumption per transaction, Solana has the highest energy efficiency followed by Algorand and Avalanche. Because the more number of nodes in the network, the better decentralization but more energy is used in the network. Taking the number of nodes into account, i.e. computing the energy consumption per transaction per node, the result is still consistent; Solana has highest energy efficiency followed by Algorand and Avalanche. Cardano, in this case, follows after Avalanche showing very close energy efficiency to top three chains. The closer look at the difference of hardware requirement and consensus mechanism are found in the section 2 below.
Table 2. Energy Consumption per Transaction by Chain
| Chain | Energy Consumption per Transaction (Wh/tx) | Date | Node Count | Wh/tx per Node | Consensus Mechanism | Type |
|---|---|---|---|---|---|---|
| Bitcoin | 2,188,590.0 | 04/25/2022 | 15,527 | 140.954 | Nakamoto consensus | PoW |
| Ethereum | 238,220.0 | 01/10/2022 | 11,670 | 20.413 | Nakamoto consensus | PoW |
| Cardano | 51.6 | 08/07/2021 | 3,002 | 0.017 | Ouroboros | PoS |
| Tezos | 41.5 | 08/22/2021 | 375 | 0.111 | Tenderbake | PoS |
| Algorand | 2.7 | 08/16/2021 | 1,190 | 0.002 | Pure Proof of Stake | PoS |
| Solana | 0.2 | 09/09/2021 | 1,015 | 0.000 | Byzantine Fault Tolerance (BFT) on top of PoH | PoH |
| Polkadot | 17.4 | 08/28/2021 | 297 | 0.059 | GRANDPA and BABE | PoS |
| Avalanche | 4.8 | 10/19/2021 | 1,084 | 0.004 | Snowball algorithm | PoS |
| Ethereum after the “Merge” | 21.3 | Estimate | - | - | Casper the Friendly Finality Gadget (combining PoS and BFT) | PoS |
Source of Table 2: 🔗 Bitcoin energy consumption per transaction 🔗 Bitcoin number of nodes 🔗 Ethereum energy consumption per transaction 🔗 Ethereum number of nodes 📄 CCRI(2022)_energy-efficiency-and-carbon-footprint-of-PoS-blockchain-protocols 🔗 https://ethereum.org/en/energy-consumption/ 🔗 https://ethereum.org/en/developers/docs/consensus-mechanisms/#proof-of-stake
Note of Table 2: (a). Each chain has the different definition of “transaction” and also per transaction energy consumption ignores a base electricity consumption to keep up with the consensus without providing any transactions, so the result should be interpreted with care. (b). Because the “Merge” of Ethereum has not yet completed, the energy consumption per transaction of Ethereum after the “Merge” is an estimate by ethereum.org. Hence, the value was not computed in the same way as the value of other chains. One needs caution when comparing the value of Ethereum after the “Merge” with other chains.
🔗 https://digiconomist.net/bitcoin-energy-consumption
🔗 https://digiconomist.net/ethereum-energy-consumption
🔗 https://arxiv.org/abs/1710.09437