What does the Ethereum merge mean for you in real terms?
ETH 2.0. The merge. Whatever you want to call it, is now live.
The development of the merge has been headline news for the last few months.
Most of those stories offer some high-level explanation of what the merge actually means for you. Or they offer cursory explanations of what PoW and PoS are along with vague ideas about what the shift from to the other could do.
Honestly, reading through a lot of the news it felt too surface level.
So, a few weeks back I decided a week after the merge I’d see what real-world effect it’s had for the average crypto user.
I've been keeping an eye on how this will affect average users, and here’s what I’ve found.
Overview of Ethereum merge stats
- Ethereum gas price and speed have not been affected by the merge
- Ethereum's energy usage dropped from 83.89 TWh to 0.01 TWh (a drop of 99.988%)
- The energy saving of 83.88 TWhs is the same energy needed to power Belgium for 1 year
- The energy needed to action one transaction on Ethereum dropped from 199.29 KWh to 0.03 KWH
- One transaction pre-merge uses the same energy as 6,634 transactions post merge
- Ethereum's power usage per user dropped from 409,219 watts per user to 48
- Ethereum post-merge power usage per user is 907 times more energy efficient than traditional banking
- Ethereum post-merge power usage per user is 18,152 times more energy efficient than Bitcoin
What will post-merge Ethereum do for you?
The Ethereum merge’s effect on gas fees
I have to say one of the things I was most excited for when I first heard of the merge is that gas fees might drop.
Unfortunately, that’s not the case - at least not yet.
Gas fees have come down in the last year or so from around 100 Gwei to ~16 Gwei.
That’s a drop of 84%.
But as you can see, it's been pretty stable since the merge.
No new drops, no new spikes.
I don’t think there’s any reason to expect it will come down further until we see some sharding.
But that’s a discussion for another day.
Ethereum merge’s effect on speed
Speed is another issue a lot of folk are concerned about when talking about crypto.
Again, the merge hasn’t had any real effect on speed increases either.
As listed on the Ethereum Org website, it was never intended to.
There will be a 10% increase in speed, but it’s not very significant in the grand scheme of things. You’re looking at a drop of around 1 transaction per second.
However, that’s not such an issue as you’d know if you read our piece on blockchain layers and layer 2 solutions.
So the question is, what is the ETH merge good for and how does it benefit you as a normal user?
The ETH merge effect on energy usage
This is the big one for Ethereum - and for all blockchains as a whole.
One of the biggest targets on blockchain’s back is the huge energy needs required to facilitate large-scale usage - especially for PoW chains.
In fact, a lot of the naysayers and negative press regarding blockchain is focused on energy usage and how blockchain tech contributes to climate change.
I mean, check this quick Google search result.
It’s a valid criticism.
I mean, when you put things into perspective, there’s a huge amount of energy consumed by blockchains.
As humankind takes more measures to combat climate change, these kinds of energy hogs simply won’t be acceptable.
So what has the merge done here to help[ us all out?
Let’s break down the pre and post-merge energy usage of Ethereum and other blockchains to put this in perspective.
But first, the way energy is measured.
What is a TWh?
TWh stands for tera-watt hours.
You’ll see this term bandied about when it comes to energy calculations.
We have to go on a little detour here, so bear with me. It’ll all make sense once we get into the numbers.
Watts are the basic unit of energy.
Watt hours measure the use of energy over a specific time period of one hour.
So, a 60w lightbulb will use 60Whs of energy if left on for 1 hour, 120 Whs if left on for 2 hours and so on.
As with most metric measuring systems, watt hours increase in increments of 1000.
1000 watt hours = 1-kilowatt hour.
And then we see a huge jump to terawatt hours.
It’s 1,000,000,000 KWh to 1 TWh.
Tera-watt hours is a huge increase in the amount of energy used. And ti’s the basic unit of measurement for mapping large-scale energy usage.
In real terms,1TWh is the same as…
- Boiling the kettle for 25 billion cups of tea
- Cooling your beers for 2.9m years in a normal fridge
- Making 36.8 trips to the moon
- Powering 12 million 60w lightbulbs for a full year
- Keep your phone fully charged for 370,000,000 years
Basically, 1 TWh is a serious amount of energy.
Now we know the basic units, let’s look at the stats.
Comparing Ethereum’s energy usage pre-merge
Below is a collection of the energy usage of various different services, nation-states, and organisations to help put blockchain energy usage into perspective. Bear in mind, that below is the energy usage PRE merge.
For all the flack Bitcoin and Ethereum get as “energy eaters”, they’re actually still lower than the energy consumption for the traditional banking system and gold.
I’m not saying they’re energy efficient. But they’re not the worst offenders.
The question here would be whether or not they’re energy-efficient by a “per user” basis (which we’ll look at shortly).
The key thing here is where pre-merge Ethereum sits.
It’s still a reasonable energy consumer at 83.89 TWh per year. And you’ll note that the energy usage of both Solana and Cardano (both PoS networks) is far, far lower.
These two chains both have fewer users, but still, the difference is startling.
Let’s see what happened to Ethereum after the merge.
Comparing Ethereum’s energy usage pre-merge
There was a lot of talk about the ETH merge and how it would drop energy usage significantly.
It looks like that has succeeded.
The Merge has dropped Ethereum down to the bottom of our table with Cardano and Solana.
They still use less, but also receive less action than Ethereum.
In real terms, the drop in energy usage for Ethereum is a drop of 99.988%.
Which is huge.
ETH merge’s effect on total energy usage over one year
So for a little fun, I wanted to see what this actually means in real terms.
I mean, it’s all well and good to say that ETH’s energy usage has dropped by 99.988%, but what does that actually mean.
The actual drop in TWhs was a whopping 83.88 TWhs. That same amount of energy could do all of the below.
- Power 7,746,150 US homes for a year
- Boil 754 billion kettles
- Power 3,320,000 stadiums during World Cup fixtures
- Supply Belgium with a year’s worth of enegry
ETH merge’s effect on single transactions
Prior to the merge, the average energy expenditure of a single transaction was 199.29 KWh.
It’s now dropped to 0.03 KWh.
This means you can now action 6,634 transactions post-merge for the same energy expenditure as 1 transaction pre-merge. Pretty cool.
By those numbers, a single transaction would have cost around $29.83 in the pre-merge world.
Post merge, a single transaction will only cost you $0.0045. That’s less than half a cent.
As for the real-world equivalent of 0.03kwh, that’s the same as…
- Running a table fan for an hour
- Power an LED TV for an hour
- Game on a PS5 for 10 minutes
- Running your freezer for one hour
The energy cost has gone way down. Which sounds great, but what that’s really important for is the lowering of carbon emissions.
Does the ETH merge mean blockchains are now “environmentally friendly”?
Here’s the thing.
Right now a lot of people use the high energy usage of Bitcoin (and ETH pre-merge) as an attack point. They say it uses too much energy and is unsustainable.
Others look at where Bitcoin falls and say that it’s still around 50% of the energy usage of the traditional banking system.
Ethereum was the better option as it was about 25% of the traditional banking system.
Neither argument is correct.
Because they’re absolute numbers and don’t take the number of users into consideration.
I mean, a quick Google will tell you that…
- 76% of the world’s population has a traditional banking account (that’s around 6,057,200,000 people)
- Bitcoin has around 180M users worldwide
- Ethereum has around 205M users
If we were to look at the average energy usage against the total number of users, it paints a very different picture.
I’ve had to drop the measurement here to Watt-hours per user instead of Terawatt-hours.
As you can see, whilst Bitcoin might use less overall power than traditional banking, when you consider the scale of the user base Bitcoin (and as a result likely most PoW blockchains) massively underperform.
Ethereum, on the other hand, uses far less energy on a per-user basis. If they hit the scale of traditional banking, there would still be a notable energy saving over other options.
If we put this into perspective on a per-user basis then…
- Ethereum post-merge is 907 times more energy efficient than traditional banking
- Ethereum post-merge is 18,152 times more energy efficient than Bitcoin
What does this mean for the future of blockchain?
In short, it looks like PoS chains are the only way to go if we’re looking at this from an entirely energy-efficient perspective.
Which I don’t think is a bad thing.
With climate change and constantly rising energy prices, the amount of energy and emissions caused by blockchains is a real worry for many people.
And honestly, if they’re not kept in check then it’s going to be a difficult sell to make this mainstream.
By moving to PoS, Ethereum has proven that - first of all - a merge of this kind is wholly possible.
They’ve also proved that it can make the entirety of blockchain solutions more viable on a long-term basis.
Sources used for statistics on blockchain power usage.
- What you can do with 1TWh of energy
- Power output for traditional banking and gold
- Energy usage of Bitcoin
- ETH energy usage (pre and post merge)
- Alphabet energy usage
- Cardano energy usage
- Freezer energy use
- UK Energy usage
- Average US home energy usage
- Kettle boiling energy usage
- Stadium energy usage
- Belgium energy usage
- PS5 power usage
- Average cost per KWh
- % of people with a bank account
- Current world population
- Bitcoin users
- Ethereum users
The information provided on DecentReviews does not constitute investment advice, financial advice, trading advice, or any other sort of advice. Do not treat any of the websites content as such. DecentReviews does not recommend that any cryptocurrency or blockchain asset should be bought, sold, or held by you. Conduct your own due diligence and consult your financial advisor before making any investment decisions.