Sustainability of Ethereum

Despite PoS Ethereum presenting a significant improvement over PoW Ethereum with regard to the network’s electricity consumption, it is worth noting that blockchain technology in general is not energy-efficient compared to more centralized alternatives. Blockchains are distributed ledgers in which data and processes are replicated over hundreds or thousands of different nodes in the network, which introduces significant data redundancy. From a blockchain perspective this is required to make decentralization work (the more, the better), but from an environmental perspective this may always lead to undesirable outcomes. This can easily be illustrated by comparing the energy efficiency of PoS Ethereum to a centralized institution such as Mastercard as shown below. This comparison should serve as a reminder that decentralization always has a price; some will argue this feature is worth the cost.¹