Add Ethereum energy consumption page

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+---
+title: Ethereum Energy Consumption
+description: The basic information you need to understand Ethereum's energy consumption.
+lang: en
+sidebar: true
+---
+
+# Introduction to Ethereum's Energy Consumption {#introduction-to-ethereum-energy-consumption}
+
+Since inception, sustainability has been a core value for Ethereum. However, until recently sustainability has sat uncomfortably alongside two other core values: security and scaleability. This page will explain why building out Ethereum to its current state has required a significant upfront carbon cost and why Ethereum is now on the cusp of becoming a truly low-carbon blockchain without undermining its other core principles.
+
+## Energy secures the network {energy-secures-the-network}
+
+Transactions on the Ethereum blockchain are validated by miners. Miners are node operators who bundle together transactions from the mempool into ordered blocks, which are added to the Ethereum blockchain. The new blocks are broadcast to all the other node operators who run the transactions independently and verify that the checksum generated by the miner proposing the block agrees with their own. Since the checksum is generated based on the entire history of the chain, any dishonesty shows up as an inconsistency in the checksums generated by different nodes. Assuming the checksums are verified, the block is added to the blockchain on every node. If the checksums do not match up, the blockchain forks, and after a few blocks the valid branch is assumed to be the one with the longest valid chain.
+
+This only works if there is a cost associated with minign and some unpredictability about which specific node submits the next block. These conditions are met by imposing proof-of-work (PoW). To be eligible to submit a block of transactions a miner must solve an arbitrary computational puzzle faster than any other miner. This creates competition between miners and cost in the form of energy expenditure. In order to successfully defraud the blockchain, a dishonest node operator would have to consistently win the race to solve the PoW puzzle which is both very unlikely and prohibitively expensive. PoW is therefore a way to secure the network. By requiring proof of computational work, PoW underpins the longest-chain consensus mechanism that ensures validity of the blockchain.
+
+Ethereum has implemented the PoW protocol since its inception. While migration away from PoW has always been a fundamental goal of Ethereum, it has also arguably been the most philosophically and technologically challenging because the viable alternatives all required some compromise in one of Ethereum's core principles.
+
+## PoW energy expenditure
+
+PoW is a very robust way to secure the against dishonest changes to the blockchain, but it is problematic for several reasons. Since the right to mine a block requires solving a computational puzzle, miners can increase their odds of success by investing in more powerful hardware, leading to an arms race of increasingly expensive and power-hungry mining equipment. Over time, this prices miners out of the market, tending towards centralisation, and also dramatically increases the energy consumption associated with securing the network. Ethereum's PoW protocol currently consumes as much energy as a medium-sized country.
+
+## PoS
+
+A greener future for Ethereum is already being built in the form of a proof-of-stake (PoS) chain. Under PoS, the arbitrary puzzle solving is not necessary, drastically reducing the energy expenditure required to secure the network. Miners are replaced by validators who perform the same function except that instead of expending their assets up-front in the form of computational work, they stake ETH as collateral against dishonest behaviour. If the validator's node is non-responsive, or a fraudulent block is submitted to the chain, the staked assets can be "slashed", strongly incentivizing honesty and securing the network. Similarly to PoW, in order to maintain a fraudulent blockchain, a validator would require 51% of the total ETH staked in the network. Unlike PoW, however, consensus is not based on the longest chain, but on a mechanism known as ["casper"](https://arxiv.org/abs/1710.09437). Migrating from PoW to PoS eliminates the need to expend energy on arbitrary computations.
+
+## The merge
+
+There is now a functional PoS blockchain called the [Beacon Chain]("https://ethereum.org/en/eth2/beacon-chain/") that has been running since December 2020 that is demonstrating the viability of the PoS protocol. Now that the ["London Upgrade"](https://ethereum.org/en/history/#london) has been successfully implemented, the switch from PoW to Pos (known as "the merge") is the next major update coming to Ethereum with a target date of late 2021 - early 2022. The merge to PoS will also bring associated efficiency gains through "sharding" the blockchain into sub-chains and accelerating the adoption of "roll-ups" (collections of transactions settled cheaply off-chain then pushed to the Ethereum blockchain as a single batch transaction).
+
+## PoS energy expenditure
+
+As well as building confidence in the PoS mechanism, the Beacon Chain also enables estimates of Ethereum's post-merge energy usage. A recent [blog post on this site](https://blog.ethereum.org/2021/05/18/country-power-no-more/) suggested that the merge to PoS could result in a 99.95% reduction in total energy use, with PoS being ~2000x more efficient than PoS. The energy-expenditure of Ethereum will be roughly equal to the cost of running a home computer for each node on the network, estimated to be about 5,250,000kWh per year for a network of 10,000 nodes.
+
+![image](energy_use_per_transaction.png)
+
+We can use this data to compare Eth2 to a global service like Visa. 100,000 Visa transactions uses 149kWh of energy<sup>[^2]</sup>. In Eth2, that same number of transactions would cost 17.4kWh of energy or ~11% of the total energy<sup>[^3]</sup>. That's without considering the many optimisations being worked on in parallel to Eth2, like [rollups](/glossary/#rollups). It could be as little as 0.1666666667kWh of energy for 100,000 transactions.
+
+It's estimated that Eth2 will allow the network to process between 25,000 and [100,000 transactions per second](https://twitter.com/VitalikButerin/status/1312905884549300224?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1312905886327664640%7Ctwgr%5E%7Ctwcon%5Es2_&ref_url=https%3A%2F%2Fwww.coinspeaker.com%2Fvitalik-buterin-ethereum-layer-2%2F), with [100,000 as the theoretical maximum right now](https://ethereum-magicians.org/t/a-rollup-centric-ethereum-roadmap/4698).
+At the bare minimum, Eth2 will allow 64 times the amount of transactions as today which sits at around 15 transactions. That's the amount of shard chains (extra data and capacity) being introduced ([More on shard chains](/eth2/shard-chains/)). That means we can conservatively estimate how long it will take to process 100,000 transactions so we can compare it to the Visa example above.
+
+- `15 * 64 = 960` transactions per second.
+- `100,000 / 960 = 104.2` seconds to process 100,000 transactions.
+
+In 104.2 seconds, the Ethereum network will use the following amount of energy:
+
+`1.44kWh daily usage * 10,000 network nodes = 14,400kWh` per day.
+
+There are 86,400 seconds in a day, so `14,400 / 86,400 = 0.1666666667kWh` per second.
+
+If we times that by the amount of time it takes to process 100,000 transaction: `0.1666666667 * 104.2 = 17.3666666701 kWh`.
+
+That is **11.6554809866%** of the energy consumed by the same amount of transactions on Visa.
+
+And remember, this is based on the minimum amount of transactions that Eth2 will be able to handle per second. If Eth2 reaches its potential of 100,000 transactions per second, 100,000 transactions would consume 0.1666666667kWh.
+
+To put it another way, if Visa handled 140,839,000,000 transactions at a cost of 149 kWh per 100,000 transactions that's 209,850,110 kWh energy consumed for the year.
+
+Eth2 in a single year stands to consume 5,256,000 kWh. With a potential of 788,940,000,000 - 3,153,600,000,000 transactions processed in that time.
+
+_We’ve provided the basic comparison to Visa to baseline your understanding of Eth2 energy consumption against a familiar name. However, in practice, it’s not really correct to compare based on number of transactions. Ethereum’s energy output is time-based. If Ethereum did more or less transactions from one minute to the next, the energy output would stay the same._
+
+_It’s also important to remember that Ethereum does more than just financial transactions, it’s a platform for applications, so a fairer comparison might be to many companies/industries including Visa, AWS and more!_
+
+## Criticism
+
+PoS has also been criticised for promoting a centralised or aristocratic rule of the network, because the right to propose blocks is "bought" by staking funds. However, there are many thousands of individual holders of sufficient funds (32 ETH) that could choose to become a validator. There are currently more than 130,000 Ethereum validators. The minimum staked value probably also represents a much cheaper entry point to validating the network than the investment of capital required to run a PoW mining rig for a blockchain like Bitcoin.
+
+It is also important to realise that there are alternative blockchains already offering lower energy consumption either because they already use PoS or because they have other efficiencies built into their validation protocols. However, to deliver these efficiency gains the alternative chains have invariably compromised security, decentralisation or scalability. The merge from PoW to PoS drastically improves Ethereum's energy-efficiency while also preserving its decentralisation and security.
+
+## Summary
+
+While Ethereum's energy consumption has historically been substantial, there has been major investment of developer time and intellect into transitioning from energy-hungry to energy-efficient block validation. To quote [Bankless](http://podcast.banklesshq.com/) the best way to conserve the energy being burned by PoW is simply to "turn it off", which is the approach Ethereum has committed to take.
+
+<InfoBanner emoji=":evergreen_tree:">
+  If you think these stats are incorrect or can be made more accurate, please raise an issue or PR. These are estimates by the ethereum.org team made using publicly accessible information and the current Eth2 design. This doesn't represent an official promise from the Ethereum Foundation. 
+</InfoBanner>