BSC Chain Pollution vs Ethereum Pollution: A Comparison
How does Binance Smart Chain compare to Ethereum when it comes to carbon footprints?
Did you know that mining Bitcoin is 15 times more energy intensive than gold mining? How about that a single transaction on Bitcoin’s closest competitor, Ethereum, uses more energy than the average American family does in an entire week? Just because cryptocurrencies don’t live in the physical world, doesn’t mean they don’t have real, tangible impacts on our fragile environment.
In this article, we’ll compare the second most popular blockchain network, Ethereum, with the altcoin Binance Smart Chain (BSC). Hailed by advocates as the “Ethereum killer”, BSC promises a more streamlined network with a fraction of the carbon footprint of Bitcoin and Ethereum.
But does it really deliver, and will Ethereum 2.0 change everything?
Ethereum is currently in the process of a historic transition that could reduce its pollution by over 99 percent, though it’s anyone’s guess when the change will finally be fully realized. For years now, Ethereum software developers have been promising to move the blockchain to a proof-of-stake model, which they argue will use a fraction of current Ethereum power demands.
Currently, a single Ethereum transaction typically soaks up around 180 KWh. To put that in perspective, a standard VISA transaction will cost around 0.00148 KWh, meaning a single Ethereum operation uses as much energy as around 100,000 transactions by VISA.
Or, to put it in more practical terms, a standard 17-20 ft refrigerator uses around 200 KWh each month; meaning one Ethereum transaction uses as much power as your fridge does every three weeks or so. An individual Ethereum transaction is also comparable to:
- A four person American household using their hot water heater for around two weeks.
- Three months of use of a standard household clothes dryer.
- The typical energy use of an American television over six months.
- A year’s worth of standard microwave energy use.
Bear in mind, all these numbers are for a single Ethereum transaction. In total, the global Ethereum community uses around 86.24 TWh of energy per year, according to estimates from EthereumEnergyConsumption.com.
This is comparable to the entire annual energy usage of the nation of Finland. It translates to a carbon footprint of 40.96 metric tons of carbon dioxide equivalent (Mt CO2).
If Ethereum were a country, it would sit somewhere between Sweden and Switzerland in terms of its total carbon emissions.
Having said that, it’s worth noting that not all this energy comes from polluting fossil fuels. A study from the University of Cambridge found just under 40 percent of all NFTs on Ethereum already use renewable energy to meet their computing demands.
Moreover, when it comes to mining specifically, Ethereum generally enjoys a better environmental reputation than some competitors, such as Bitcoin. Of Ethereum’s total annual, global energy use of 86.24 TWh, around half is attributed directly to miners. The latest data from Digiconomist suggests around 44.49 TWh of energy are used every 12 months by miners, though this number is constantly rising.
At the time of writing, most miners are using around 1000-1500 watts to produce a single eth, making it easily among the most energy intensive cryptos around. There is, however, a solution on the horizon.
The Cost of Proof-of-Work
Since 2019, Ethereum software developers have been promising a shift to a new consensus algorithm. A consensus algorithm is a system of decentralized validation, where participants in a blockchain work together to ensure the security of the network as a whole.
Currently, Ethereum uses the original blockchain model of proof-of-work. For those uninitiated in blockchain jargon, this simply means the system’s security, including records of transactions and who owns how much of a cryptocurrency, are validated by users who dedicate computing power to resolving mathematical puzzles — working, that is.
The more “work” your computer does, the more you can potentially contribute to validating the system as a whole. However, computers need power, and they need even more of it when they’re solving complex math problems for weeks on end.
Right now, around 70,000 validators independently check every transaction that takes place on the Ethereum network, thus guaranteeing no single actor can falsify transactions, manipulate account ledgers or otherwise game the system. Of course, 70,000 validators all over the world are constantly burning through energy to maintain this decentralized but costly system.
Ethereum’s proposed solution is to replace this proof-of-work system with a consensus algorithm described as “proof-of-stake”.
Instead of relying on computing power to validate, participants would instead use their own, already accumulated Ethereum. Validation happens when a user pitches a set amount of their tokens; if the transaction is validated successfully, the validator then receives a slice of the transaction fee.
Developers estimate this transition could reduce the system’s power demands by over 99 percent, though the change has been repeatedly pushed back despite clear hunger for such a change from the community.
When the recent Altair update introduced a proof-of-stake parallel algorithm, the value of eth almost immediately shot to its highest value in history, demonstrating the level of demand for a cleaner, less energy intensive model. Currently, developers say the full transition should happen sometime during 2022.
Binance Smart Chain: The Ethereum Killer?
While Ethereum is yet to abandon the energy intensive proof-of-work model, Binance Smart Chain has already adopted a more eco-friendly consensus algorithm. BSC uses a hybrid stake-authority system, under which validation occurs based on both assets and reputation.
Like Ethereum’s proposed proof-of-stake model, BSC requires validators put up a certain number of tokens. If the validation is successful, they are awarded a transaction fee. Unlike Ethereum, however, BSC ranks validators based on how many tokens they already have, and produces a shortlist of contributors every 24 hours.
This list is indeed short, at just 21 validators, who each take turns validating transactions. This system, dubbed “proof-of-staked-authority”, means transactions are both faster and use a fraction of the energy required by the likes of Ethereum.
It’s worth noting BSC’s model does have its critics, who point out the system isn’t as decentralized. Almost any Ethereum user, for example, can easily participate in validation. On the other hand, under proof-of-staked-authority, only a handful of users have the opportunity to do so on any given day.
Yet the impact on energy usage is extreme. In an analysis of crypto energy consumption, French blockchain association ADAN found that BSC’s energy use per transaction is so small it wasn’t even worth listing; instead, they simply concluded the number was “negligible”.
In the same analysis, Ethereum was listed as the second most energy intensive blockchain network. Of the 11 leading blockchain protocols analyzed, only Bitcoin was found to be a bigger polluter than Ethereum.
In terms of pollution, there’s no comparison: BSC is easily among the greenest blockchains out there, while Ethereum remains one of the worst environmental offenders.
This could change very soon, once Ethereum’s biggest overhaul to date launches. This may happen as early as next year; but until it does, Ethereum will continue to struggle with its reputation as one of the industry’s most chronic polluters.