Description

This study proposes a novel hybrid framework measuring energy consumption of cryptocurrencies, which reconciles these two perspectives by leveraging the natural experiment provided by the Merge on September 15, 2022. Specifically, we exploit the migration of mining activity from Ethereum to Ethereum Classic to identify an efficiency threshold that determines miners’ exit decisions. By combining equilibrium conditions from the top-down approach with hardware-level efficiency data from the bottom-up approach, we construct a more accurate estimate of Ethereum’s pre-Merge energy consumption. Our estimates indicate that the magnitude of energy savings is approximately 4% lower than reported in existing studies, suggesting that prior estimates tend to overstate the reduction.