It has long been known that the Ethereum Blockchain consumes much more energy than the Cardano Blockchain with its Proof of Stake concept. The total energy demand of the Ethereum Blockchain from the mining process is variable and rose sharply in 2021, currently estimated at around 78.76 TWh/yr. This is roughly equivalent to Chile’s electricity consumption, with a population of around 19 million.
In contrast, the energy demand of the Cardano Blockchain from the operation of the Stakepools can be estimated at around 10.5 GWh/yr for 2021 (see here), which is around 7,800 times lower.
But what about individual transactions on the various blockchains? For Ethereum, an energy demand of 179.5 kWh/tx is given, with currently around 1.2 million transactions per day.
The number of transactions on Cardano has risen sharply since the introduction of native tokens in 2021, and an average of around 30,000 transactions per day can be assumed for Cardano in recent months. At the moment, this would correspond to an energy demand of 0.91 kWh/tx – i.e. a value per transaction that is almost 200 times lower than that of Ethereum.
Since Cardano’s energy consumption does not depend on the number of transactions, but only on the number of stake pools, the specific energy demand decreases as the number of transactions increases. With full utilisation of the transactions possible with current network parameters (currently 7 tx/sec, see here), the number of annual transactions can increase to up to 220 million on the same level of infratructure. The specific power consumption per transaction on the Cardano blockchain would then be reduced to around 0.045 kWh/tx (=45 watts/tx), which would be almost 4,000 times lower than with Ethereum.
The environmental impact of such transactions in Ethereum and Cardano differs considerably. For comparison: a beech tree is able to sequester 1 tonne of CO2 from the atmosphere in an 80-year life span.
With a specific emission value of 0.407 kg CO2eq/kWh of electrical energy (as an average of US/EU emission values), a single transaction on the Ethereum network generates a CO2 emission of 73.1 kg CO2eq.
To offset this amount for (yearly) Ethereum transactions would require planting of 6 trees and to keep them over a period of at least 80 years, which means that you’ll need a total of 2.6 billion trees to offset all transactions (not considered a future increase of transactions, which would require even more offset). Or, in other words: 14 transactions on the Ethereum blockchain neutralise the CO2 sequestration capacity of a beech tree over its entire lifespan.
With Cardano, the situation is different: even at full network load, one transaction only has a specific emission contribution of 0.018 kg CO2eq/tx – almost 4,000 times lower than on Ethereum.
Currently, about 1/3 of all Cardano stakepools are already running on renewable energy – moreover, with the project of a CardanoForest with the goal of planting 1 million trees and tracking and verifying their offset via the Cardano Blockchain, a groundbreaking project has been launched that has the potential that all transactions in the Cardano network can be processed in a climate-neutral way in the future.
More than 340,000 trees have already been donated, and the number continues to grow with each passing day. With 1 Ada donation, one tree can be planted and tracked on Cardano blockchain. With actual 900,000 staked Cardano Wallets, the goal of 1 million trees can well be reached in short time.
Stefan Rehfus, CO2POOL, October 2021