Drake and Donofrio criticize Bitcoin and Ethereum

Anthony Donofrio is one of the co-founders of Ethereum, while Justin Drake is a researcher at the Ethereum Foundation.

Drake and Donofrio against the high energy consumption of PoW crypto, in particular Bitcoin and Ethereum

A few days ago, they exchanged tweets in which they criticized the energy consumption of Bitcoin, but also that of Ethereum. 

Donofrio claimed that if Bitcoin really does use almost 1% of the energy used by humans in the world, it is too much.

Drake responded by pointing out that, according to Statista data, Bitcoin’s energy consumption is 204 TWh per year, or 0.82% of the total 25,000 TWh per year consumed, while Ethereum’s is 85 TWh per year, or 0.34% of the total. 

If bitcoin is really using nearly 1% of the energy on earth that is way too much for a pet rock. https://t.co/CDL32jk5FF

— Texture, PhD (@iamtexture) June 9, 2022

The data obviously refer to net electricity consumption only. 

However, it is worth pointing out that while this is to all intents and purposes a criticism of the energy consumption generated by Proof-of-Work based mining, both for Bitcoin and Ethereum, with the forthcoming switch to Proof-of-Stake, Ethereum’s consumption should fall dramatically. 

Indeed, the attack by Ethereum’s supporters on Bitcoin probably serves precisely to promote this imminent epochal transition of Ethereum. 

Indeed, despite the fact that the transition is expected as early as August, or by late autumn 2022, the markets do not seem to be appreciating it. 

The current trend of the crypto market

The crypto markets are in big trouble right now, with Bitcoin losing 15% of its value in the last week, but Ethereum is not bucking the trend at all, despite the upcoming switch to PoS. 

ETH has lost as much as 26% in the last seven days, and 34% in the last month. 

Many expected that the anticipation of the Merge, with the subsequent switch from PoW to PoS, would do well for the price of ETH, but this did not happen. 

It is possible that in such a scenario, Ethereum’s supporters are trying to try and lift ETH’s fortunes in the markets by resorting to a bit of propaganda, but apparently this is not effective at all. 

Bitcoin and Ethereum’s energy consumption will change course

It is also worth mentioning that the energy consumption of Bitcoin mining as of January this year has stabilized, and may even decrease significantly if the value of BTC remains low. In addition, the fourth halving of the premium for miners will take place in spring 2024, which could lead to a further decrease. 

In contrast, the reduction in Ethereum’s power consumption will be much faster and more drastic with the switch to PoS, but the markets evidently care little about this. 

Some even speculate that a reduction in the cost of mining may reduce the market selling prices of the ETH that will be created every day and cashed in by validators. It is probably also for this reason that deflationary measures have been introduced in the Ethereum protocol to prevent too many ETH being placed on the market at bargain prices. 

Finally, it is worth adding an important point of reflection. Historically, in all past cycles in which BTC and ETH have coexisted, the latter has always made higher gains during bull runs, but also made higher losses during bear markets. The current bear market is apparently no exception in this respect.