CryptocurrencyValues Soar: Bitcoin Reaches $124,000 Peak, Ethereum Hovers Around $4,800 – Which Digital Currency is More Environmentally Friendly?
Bitcoin and Ethereum, the two leading cryptocurrencies, have been making headlines recently for different reasons. While Bitcoin has set a new all-time high, approaching $124,000, Ethereum is also on the rise, nearing its all-time high of around $4,800.
However, their paths diverge significantly when it comes to energy consumption and environmental impact.
Bitcoin, which still relies on the energy-intensive proof-of-work (PoW) consensus mechanism, consumes vastly more energy and has a far larger carbon footprint compared to Ethereum. According to estimates, Bitcoin's annual energy use is between about 138 to 1,174 terawatt-hours (TWh), comparable to the electricity consumption of entire countries like Poland, Thailand, or the Netherlands [1][2][5]. Its carbon footprint is roughly 40 million tonnes of CO₂ equivalent per year, similar to the emissions of countries such as Greece or Switzerland [1].
On the other hand, Ethereum transitioned from energy-intensive PoW to energy-efficient proof-of-stake (PoS) in September 2022—an event known as “the Merge” [1]. This change reduced Ethereum’s energy consumption by over 99.9%, bringing its annual electricity use down to around 2,600 megawatt-hours (MWh) or 0.0026 TWh, equivalent to the energy used by a small town of 2,000 homes per year [1]. Now, Ethereum transactions consume only about 0.02 kWh each, roughly the energy required to boil a kettle, compared to Bitcoin’s thousands of kWh per transaction [2][5].
To address Bitcoin's environmental impact, measures such as optimizing mining hardware efficiency, mining with renewable energy, and exploring layer 2 scaling solutions have been implemented [2][3]. However, these measures have only partially addressed Bitcoin's energy issues, and its consensus design inherently demands significant energy use. In contrast, Ethereum's successful shift to PoS remains the most dramatic example of reducing blockchain energy consumption [1][4].
The differences in energy consumption and environmental impact between Bitcoin and Ethereum have significant implications. Ethereum's low-energy PoS model makes it easier to align with climate goals compared to Bitcoin. Meanwhile, Bitcoin's high energy use and emissions remain a significant concern for investors who care about environmental, social, and governance (ESG) factors.
| Aspect | Bitcoin | Ethereum | |----------------------|----------------------------------------------|----------------------------------------------| | Consensus Mechanism | Proof of Work (PoW) | Proof of Stake (PoS) (since Sept 2022) | | Annual Energy Use (2025) | 138–1,174 TWh | ~0.0026 TWh | | Carbon Footprint | ~40 million tonnes CO₂ equivalent/year | Vastly lower (over 99.9% reduction vs PoW) | | Energy per Transaction | Over 1,000 kWh | ~0.02 kWh | | Environmental Measures | More efficient ASICs, use of renewables, scaling solutions | Consensus redesign to PoS, regulatory support for ESG |
In summary, Ethereum's successful shift to PoS and its role in decentralized finance (DeFi) and NFT marketplaces have contributed to its rise. Its low-energy profile makes it significantly more environmentally friendly compared to Bitcoin as of 2025 [1][2][4][5].
References: [1] Digiconomist. (2022). Bitcoin Energy Consumption Index. Retrieved from https://digiconomist.net/bitcoin-energy-consumption [2] Statista. (2022). Ethereum energy consumption. Retrieved from https://www.statista.com/statistics/1217028/ethereum-energy-consumption/ [3] The Guardian. (2021). Bitcoin mining: the dirty secret of cryptocurrency. Retrieved from https://www.theguardian.com/technology/2021/apr/28/bitcoin-mining-the-dirty-secret-of-cryptocurrency [4] CoinDesk. (2022). Ethereum's 'Merge' sets new standard for energy efficiency in blockchain. Retrieved from https://www.coindesk.com/business/2022/09/15/ethereums-merge-sets-new-standard-for-energy-efficiency-in-blockchain/ [5] The New York Times. (2021). Bitcoin's Energy Use Is a Problem. The New York Times. Retrieved from https://www.nytimes.com/2021/05/11/climate/bitcoin-energy-climate-change.html
- As the cryptocurrency market continues to evolve, the environmental impact of blockchain technology has become a significant concern, especially for Bitcoin, which consumes vast amounts of energy through its proof-of-work consensus mechanism.
- In contrast, Ethereum, which transitioned to the energy-efficient proof-of-stake consensus mechanism in September 2022, has drastically reduced its energy consumption and carbon footprint, making it more environmentally friendly than Bitcoin.
- The alignment of Ethereum's low-energy profile with climate goals positions it favorably for investors who consider environmental, social, and governance (ESG) factors, further distinguishing it from Bitcoin's high-energy consumption and resulting carbon emissions.
