Ethereum Completes Upgrade That Could Reduce Global Power Consumption by 0.2% – What’s Next?

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The long-anticipated Ethereum upgrade, known as "the Merge," has officially gone live. On September 15, at 14:42 Beijing time, Ethereum's execution layer merged with its consensus layer—also known as the Beacon Chain—at block height 15,537,393. The network successfully produced its first Proof-of-Stake (PoS) block at height 15,537,394, marking the official completion of Ethereum 2.0.

This milestone represents one of the most significant shifts in blockchain history. With the transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS), Ethereum is not only redefining its technical architecture but also reshaping the environmental, economic, and governance landscape of the broader crypto ecosystem.

Why the Merge Matters

Ethereum’s shift to PoS fundamentally changes how the network validates transactions and secures its blockchain. Unlike PoW, which relies on energy-intensive mining rigs competing to solve complex mathematical puzzles, PoS allows validators to create new blocks based on the amount of ETH they stake—effectively replacing computational power with economic commitment.

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As Ethereum co-founder Vitalik Buterin highlighted on social media, this transition is expected to reduce global electricity consumption by approximately 0.2%—a figure derived from research by Ethereum developer Justin Drake. To put that into perspective, pre-upgrade Ethereum consumed roughly 62 terawatt-hours (TWh) per year—on par with Switzerland’s annual energy use for 9 million people.

By moving away from mining hardware and massive data centers, Ethereum slashes its carbon footprint dramatically. This makes it far more aligned with ESG (Environmental, Social, and Governance) investment principles—an increasingly important factor for institutional investors entering the digital asset space.

The End of Ethereum Mining: Fallout for Hardware Giants

One of the most immediate consequences of the Merge is the obsolescence of Ethereum mining. Millions of GPUs and ASICs previously used to mine ETH under PoW are now redundant. This sudden supply shock is expected to flood the secondary market with used graphics cards, potentially ending the era of GPU shortages that plagued gamers and builders during the crypto boom.

For semiconductor giants like NVIDIA and AMD, the impact has already begun to show.

In its Q2 2022 earnings report, NVIDIA revealed that revenue from its Cryptocurrency Mining Processor (CMP) line—a category designed specifically for mining—plunged by 66% year-over-year. While the company hasn’t broken out mining-related revenue separately, CFO Colette Kress acknowledged that shifts in crypto validation methods directly affect demand for certain products.

Similarly, AMD reported that 54% of its Q1 2022 revenue—amounting to $4.8 billion—came from its computing and graphics segment, where mining GPUs played a significant role. Although neither company depends solely on mining sales, the end of PoW on Ethereum undoubtedly removes a key growth driver.

Experts believe this could accelerate both companies’ pivot toward AI, data centers, and high-performance computing markets—areas where demand continues to grow rapidly.

A New Economic Model: Lower Supply, Higher Scarcity

The Merge isn’t just an environmental win—it also introduces structural changes to Ethereum’s tokenomics.

According to Wang Zibo, Chief Researcher at Distributed Technology, the shift to PoS significantly reduces ETH issuance. With no more block rewards for miners and only staking rewards for validators, the annual supply growth rate drops from ~4% to under 1%.

More importantly, with EIP-1559 already in place—which burns a portion of transaction fees—the network may enter a deflationary regime during periods of high activity. That means more ETH could be burned than issued, leading to a net decrease in total supply.

This scarcity dynamic could have profound implications for long-term price appreciation and investor sentiment—especially in a macroeconomic climate marked by inflationary pressures and tightening monetary policy.

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Governance Shift: From Miners to Stakeholders

Another transformative aspect of the upgrade is the shift in power dynamics within the Ethereum ecosystem.

As Wang Zibo notes, the Merge marks a philosophical evolution—from a miner-centric economy to one that prioritizes token holder value. In the PoW era, miners held considerable influence over network upgrades and forks due to their control over computational power.

Under PoS, decision-making power shifts toward those who stake ETH. Validators are incentivized not only through staking rewards but also through fee captures and tips. This aligns long-term interests between developers, investors, and users—fostering greater decentralization and community-driven governance.

Moreover, this change enhances Ethereum’s scalability roadmap. With reduced energy demands and streamlined consensus, the network can focus on upcoming upgrades like sharding, which aims to drastically improve throughput and lower transaction costs.

Challenges Ahead: Centralization Risks and Censorship Concerns

Despite its many benefits, the PoS transition isn’t without risks.

One major concern raised by industry analyst Gu Yanxi is reduced censorship resistance. In a PoS system, large staking pools or centralized exchanges could theoretically gain disproportionate influence over block validation—potentially enabling transaction filtering or suppression.

“In Web2, platforms like Twitter or YouTube are controlled by big capital,” Gu explains. “There’s a risk that similar centralization trends could emerge in Web3 if staking becomes too concentrated.”

However, he adds that current distribution metrics suggest Ethereum remains relatively decentralized. Thousands of independent validators participate in securing the network, and initiatives like distributed validator technology (DVT) aim to further democratize access.

Regulatory scrutiny may also intensify as staking services grow. Some jurisdictions are exploring whether staked ETH should be classified as securities—a move that could complicate compliance for exchanges and custodians.

Frequently Asked Questions (FAQ)

Q: Does Ethereum’s Merge eliminate all energy usage?

A: No—but it reduces energy consumption by over 99.95% compared to PoW. The network still requires electricity for nodes and infrastructure, but mining is no longer part of the equation.

Q: Can I still earn income from Ethereum after the Merge?

A: Yes—through staking. Instead of mining rewards, users can earn yields by locking up ETH as validators or delegating to staking pools.

Q: What happens to old Ethereum mining equipment?

A: Most mining rigs are now obsolete for ETH. Some may be repurposed for other PoW chains like Ravencoin or Ergo, but many will likely enter the secondhand market at discounted prices.

Q: Will gas fees drop after the Merge?

A: Not immediately. Gas fees are determined by network congestion, not consensus mechanism. Future upgrades like sharding will address scalability and fee reduction.

Q: Is Ethereum now fully upgraded?

A: The Merge was Phase 1 of Ethereum’s evolution. Future phases include Verkle Trees, Danksharding, and full implementation of rollups for mass scalability.

Q: How does PoS affect security?

A: PoS enhances security by making attacks exponentially more expensive. An attacker would need to acquire over 33% of all staked ETH—worth tens of billions of dollars—to compromise the network.

Core Keywords:

With the Merge complete, Ethereum enters a new chapter defined by sustainability, efficiency, and economic innovation. While challenges remain, the foundation is now set for a more scalable, secure, and inclusive decentralized future.

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