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Proof-of-Work will kill blockchainFeb. 16, 2018, 7:21 a.m. GMT
These are early days for the blockchain and the proof-of work method has been critical to building people’s trust. Years from now, we will look back and appreciate the genius of its deployment, preventing double spending. Pretty remarkable. And pretty unsustainable, according to critics of cryptocurrencies that use proof of work to keep the network safe and pseudonymous.
The core processes of the bitcoin blockchain that involve running transactions through the SHA-256 to validate them and solving a brute-force puzzle to mine a block burns a lot of electricity. Several estimates liken the energy needed to mine one bitcoin to energy needed to light up entire homes for several days. We are talking about a significant carbon footprint here.
The continuous block mining cycle incentivizes people all over the world to mine Bitcoin. As mining can provide a solid stream of revenue, miners run power-hungry machines to collect the rewards in bitcoins. Over the years, the penetration of the bitcoin network has deepened resulting in increase in transactions to be processes. Also, the computational problem that miners have to solve is getting tougher, and as the difficulty of the puzzle that needs to be solved has increased, the total energy consumption of the Bitcoin network has grown significantly. The hash rate has been increasing considerably over the last two years, rising forty-five-fold in less than a year. The hash rate is the measuring unit of the processing power of a blockchain network. When the network reaches a hash rate of 10 Trillion hashes per second, it means it could make 10 trillion calculations per second. THis measure, the hash rate, has been growin through the roof year on year. Hence, more calculations, hence more energy spent on computing power, hence more energy spent on cooling. So much so that now the bitcoin network’s energy consumption is higher than that of several countries. Definitely way more than that of Ethereum network or VISA for example.
Highest power consumption is of Bitcoin blockchain and the least is of VISA.
As citizens who care about our planet, we should all be concerned. There are two issues, one around the electricity used to run the machines and another around the energy used to cool them so that they don’t fail.
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