Ethereum (ETH) energy consumption down 99.9% one year since the Merge

Ethereum’s transition to proof-of-stake from proof-of-work completes its first year today (15 September 2023). Notably, the blockchain’s energy consumption has plummeted by 99.9% within the past year.

Ethereum’s energy usage drops dramatically following Merge

The Ethereum Merge has seen the network’s energy consumption plunge by 99.9% within a year. Ether has destroyed (burned) ETH worth around $488M (300,000 tokens) since migrating to PoS on 15 September 2022.

Furthermore, Ether supply has declined significantly since the transition. It has plunged from 120.5 million during the Merge upgrade to 120,221,107 at press time. That shows Ethereum turned economically deflationary – reduced supply to boost demand and skyrocket prices.

Ethereum’s upcoming Cancun-Deneb upgrade

Ether awaits the Cancun-Deneb upgrade (scheduled for later October 2023), which will slow down ETH staking.

The Cancun upgrade will significantly impact Ether’s blockchain and layer2 networks. It includes EIP 4844, a pivotal functionality that will welcome full Dansharding, a game-changer to drive Ethereum into official mass adoption.

EIP 4844 will introduce Blob Data to decrease transaction charges on layer2 networks, attracting more users from Ether and other layer1 platforms.

Ethereum price action

While analysts predicted impressive price surges amid Ether’s new deflationary status, macroeconomic challenges, including escalated inflation, the banking crisis, and stiff regulations, dented hopes of dramatic upticks. The entire crypto market has exhibited bearishness over the past twelve months.

Ethereum largely followed broad market price movements and has remained relatively unchanged since the PoS migration. The altcoin traded at $1,635 on 15 September 2022, not far from press time levels of $1,630.

While Ether’s price could appear disappointing a year after the much-anticipated upgrade, the effects on factors such as supply and energy consumption remain highly significant.

Also, Ethereum developers continue to build. While the upcoming Cancun upgrade may not immediately affect the token’s price, its long-term impact will introduce catalysts for an ETH price surge.

Increased users and transactions translate to more tokens utilized as fees. That creates demand for Ethereum to pay fees, leading to price gains in the longer term.