Gas prices fell by as much as 10% today at the same time as ethereum turned off its energy usage by upgrading to Proof of Stake.
Natural gas e-mini futures fell to $8.30 from above $9, in part because many ethereum miners used gas as part of their electricity heavy Proof of Work process.
Digiconomist estimates ethereum’s Proof of Work mining used as much energy as all of Austria, a country with a GDP of $430 billion and a population of nine million.
While a direct connection between the merge and the fall in gas prices can not be made therefore, despite the timing coinciding, taking out from markets so much energy demand should obviously have an effect due to plain supply and demand economics.
Just how much gas miners used is unclear, but we’d estimate at least 30%, with gas being the most preferred fuel for mining after renewables.
The merge therefore will have real world effects, and very abruptly, because ethereum mining has instantly stopped at a block number mined this European morning.
Up until that point, the energy demand would have continued as usual, but it is precisely at that block around 7AM UTC earlier today when miners began turning off their gear.
Just how much of an effect that will have on energy markets remains to be seen, but a huge source of demand has just vanished.