New research has revealed that Bitcoin is struggling to achieve sustainability. The report comes off the heels of the recent Ethereum Merge, the blockchain's switch from the energy-hogging proof-of-work (PoW) consensus to a more environment-friendly proof-of-stake (PoS).
Following criticism from regulators, investors, and environmentalists, Bitcoin mining projects have been attempting to switch to greener resources. Bitcoin mining projects need enormous quantities of electricity to process transactions and generate new currencies.
However, according to the most recent data available from Cambridge University's Bitcoin Electricity Consumption Index (CBECI), fossil fuels still accounted for 62% of Bitcoin's energy mix in January, a measly 3% less than in the same month last year.
Bitcoin became more dependent on gas, which in January accounted for a quarter of its energy mix compared to 16% a year earlier, while the proportion of coal dropped from 47% to 37%.
Sustainable power - defined as nuclear, hydro, wind, and solar - had a minor role in the mix, rising to around 38% from 35% a year earlier. Hydro has been reduced to 15% from roughly 20%.
"We are trying to show what bitcoin's footprint is," CBECI lead Alexander Neumueller said. "The energy mix really has a strong impact on greenhouse gas emissions."
According to the report, its findings "noticeably diverge" from predictions made in July by the U.S.-based Bitcoin Mining Council business group, which pegged the proportion of renewable energy in bitcoin's power mix at roughly 60%.
However, Ethereum has reduced its electricity use whereas Bitcoin has made only little progress toward its sustainability goals.
According to Crypto Carbon Ratings Institute (CCRI) analysis, Ethereum's switch to PoS with the recently completed Merge was predicted to cut its electricity use by 99.988%, resulting in a 99.99% reduction in total carbon dioxide emissions.
The Merge signifies the Ethereum network's transition to PoS, its new system for authenticating crypto transactions (also known as a "consensus mechanism"). The new approach replaces PoW, Bitcoin's more power-hungry algorithm.
According to the Ethereum Energy Consumption Index, the Merge reduced Ethereum power usage from 77.77 TWh on September 14 to 3.4 the following day. Since then, daily output has not increased by more than 0.02 TWh.
The Merge is being positioned by the Ethereum community as a significant upgrade to the network's basic technology. PoS will address issues with the network's environmental effect and bring staking as a new utility to the native ether (ETH) currency of Ethereum. Additionally, it will slow down the rate at which ETH is printed, which can help its price.