Dossiers
Energy and sustainability dossier
Crypto's energy use is one of the most cited objections to the sector. The picture is more nuanced than headlines suggest: the gap between consensus mechanisms is enormous, and consumption depends heavily on where and when power is available. This dossier sets out the numbers, the technology and the European rules.
Timeline
- Ethereum switches to proof-of-stake, cutting energy use drastically.
- EU reporting rules require disclosure of climate impact.
- Miners increasingly link capacity to surplus renewable power.
Why bitcoin uses energy
Bitcoin secures its network with proof-of-work: machines perform computation to earn the right to add blocks. That computation is exactly what makes an attack expensive, but it consumes power. Total usage moves with the price, because a higher price makes more capacity profitable.
A growing share of that consumption comes from power that would otherwise be wasted: curtailed wind and solar, flared gas or surplus hydro. Miners can be switched off instantly, which makes them usable as balancing capacity on some grids.
- Consumption follows the price, not the transaction count
- Location and energy mix determine actual emissions
- Flexible curtailment can support grid management
Proof-of-stake as an alternative
Ethereum moved to proof-of-stake in 2022, where validators lock up capital instead of deploying computation. Energy use fell by more than 99%. Networks such as Solana and Cardano have worked this way from the start.
The debate shifted from energy to decentralisation: under proof-of-stake, influence can concentrate among large stakers. Both models carry their own trade-off.
What the EU requires
Under MiCA, providers must publish information on the adverse climate and environmental impact of the consensus mechanism behind the tokens they offer. Issuers and trading venues record this in standardised documents.
For users this means a network's energy intensity is now discoverable alongside the usual risk disclosures. It is a transparency duty, not a ban.
Frequently asked questions
Does one bitcoin transaction really use that much power?
That calculation is misleading. Network consumption depends on security and price, not transaction count; a block costs the same energy whether it holds few or many transactions.
Is Ethereum sustainable now?
Consumption fell by over 99% after the move to proof-of-stake and is comparable to a mid-sized data centre. Beyond that it depends on validators' power mix.
Do these rules require anything from me?
No, the obligation sits with issuers and platforms. The published information can inform your own choice of networks and assets.