Climate-concerned critics of crypto (whew that’s a mouthful) point to the massive energy use required to mine coins on the blockchain. But the solution may be easier than it appears. Big coins like Ethereum can become sustainable.

Busy? Try the speed read.

The scoop: NFTs went mainstream. Now more people are starting to realize Ethereum has a sustainable energy problem. There is a solution.

Not all blockchains are the same: Bitcoin uses about 1% of the world’s electricity. Ethereum is the second largest coin and runs on a similar model as Bitcoin. Neither are energy efficient.

Still, blockchain technology as a whole operates under many different consensus algorithms. Bitcoin and Ethereum’s proof-of-work model is just one version.

Sustainable proposals: Convert mining facilities to use more renewable forms of energy. That’s a good place to start.

More effectively, big coins like Bitcoin and Ethereum can operate using a proof-of-stake model to be more sustainable. This would allow fewer nodes (computers) to validate transactions on the public ledger and increase the energy efficiency of their blockchains.

Finally, emerging coins should look to more efficient consensus algos like Ripple as a model for sustainable crypto. That would propel the industry forward.

Bottom line: Progress is happening. There are existing solutions. The blockchain industry just needs a little nudge to do better.

Dig deeper → 3 min

Ethereum has a sustainable energy problem

Some cryptocurrencies are more energy-efficient than others. For example, Ripple incorporates sustainability into its company ethos. Other companies use digital coins backed by carbon credits. But the blockchain industry needs a major transformation if it wants to successfully brand itself as a beacon of a brighter future.

If Bitcoin were a country, it would output about the same amount of energy as Hungary. Ethereum is not much better. NFTs, the popular tokens used for collecting and trading digital art, operate mostly under Ethereum’s blockchain. The NFT market was criticized for its carbon-guzzling characteristics.

One viral NFT called “Space Cat” uses the same amount of energy as an EU household would in two months, according to the website Most NFTs don’t consume this much energy, but the average does hit around two weeks worth of energy. So how can we make NFTs (and Ethereum) more sustainable?

Photo/Youtube NyanCat

Why does Ethereum require so much energy?

Miners need computer power. If servers are run primarily on fossil fuels, they are going to have a higher carbon footprint. Major blockchains like Bitcoin and Ethereum run on a proof-of-work model. This type of blockchain is at the core of the climate controversy surrounding mining and NFTs.

Under a proof-of-work model, miners have to demonstrate their efforts to prove it was performed. Then they are awarded crypto. There are several limitations and flaws under this model, but for our purposes, we are focusing on energy efficiency. This model requires loads of energy because every miner has to prove work every time a transaction is made. It also can cause transactions to take longer to be completed.

Ethereum and Bitcoin operate under the proof-of-work model. This was standard for the crypto space in the early days (2011-2014). However, as crypto is more widely adopted in the mainstream, major cryptocurrencies need to be more forward-thinking about their approach to energy use if they want to succeed beyond the 2020s.

Some sustainable alternatives to proof-of-work models like Ethereum

Proof-of-stake models are more energy efficient. This system is based on the amount of the currency the miner owns. The more you own, the more validation you have on the blockchain. Only those with an approved “stake in the game” are permitted to validate transactions.

In other words, a capable miner cannot validate a transaction on a blockchain where they don’t own any coins. On a blockchain like Bitcoin, this is not the case. Someone who owns zero bitcoin can mine and potentially cause harm to the blockchain.

The idea behind a proof-of-stake-model is that miners with high stakes on a blockchain are less likely to cause harm and attack networks because it would be financially irresponsible. This model also requires less energy because fewer nodes are permitted to mine.

New consensus algorithms

In the past, I’ve written about green cryptos like Ripple. Why is Ripple a more sustainable alternative? They created their own consensus algorithm to operate their blockchain. This approach deters fraudulent activities, speeds up transactions and encourages energy efficiency without compromising reliability.


This is a touchy subject for the OG crypto community. There are proof-of-work traditionalists that scoff at new algorithms. Satoshi Nakomoto (whoever he, she or they is/are) was certainly not stupid.

They created a system using proof-of-work to make it computationally impossible for anyone to outpace new blocks and create the longest blockchain. Otherwise, one super powerful computer would just eat up all of the Bitcoin and just kind of defeat the purpose.

So there is some merit to the proof-of-work model. And it obviously exists for a reason. But there are clear advantages for new algorithms, because the energy output of bitcoin mining is not only unsustainable, it is highly problematic.

Most high-energy facilities produce a few things that offset environmental damage. Things like human labor (jobs) and physical products that people can use to make life more interesting. Not going to get too philosophical here, but whatever interesting means to you.

The problem with crypto mining is that it creates very little jobs (if any), and just moves virtual money around. It may get a few people rich, and do all of the other cool things cryptocurrencies do, but it is hard to rationalize that much energy output.

Creating a greener crypto future

Going forward, new algorithms will become sort of necessary. Ethereum, which runs most NFTs, is already being pressured to move to a proof-of-stake model. It is certainly possible this will happen one day, but it is unlikely to happen in the near-term.

Bottom line? 1) Bitcoin and Ethereum eventually have to update their business model. 2) Converting mining activities to renewables is not the end-all solution. 3) Cryptocurrency is not inherently wasteful. It just operates on a flawed system.

Create new algorithms, build new systems, refine old ones, and the future is bright.

For more information about Ripple’s consensus algo, check out their post about it here.

No Comments
Comments to: This business model could make Ethereum (and NFTs) sustainable

Weekly Sustainability News!

By subscribing you agree to our Privacy Policy.

Sustainable Review is copyright material. All rights reserved.