The emergence of cryptocurrency has disrupted the traditional financial industry while enthralling the world. The decentralization movement not only prevents fraud; but it can also provide a censorship-resistant medium of exchange for those living under authoritarian governments; providing a critical means of financial freedom.
There is no denying fact that whenever cryptocurrency and blockchain being praised for technological advancements, it has not been without controversy. is an Energy- efficient pow-based blockchain possible? Elon Musk announced in May that Tesla would no longer accept Bitcoin as payment; citing concerns about the “rapidly increasing use of fossil fuels for bitcoin mining.”
This is due to the fact that the most popular cryptocurrencies; such as Bitcoin, Bitcoin Cash, and Ethereum, require a significant amount of energy to function. According to one report, Bitcoin is on track to consume more energy than 159 countries combined by 2020.
It’s no surprise that people like Musk advocate for greener alternatives. Despite the fact that most new technology has trade-offs; the issue has sparked a discussion about how blockchains can move even further towards environmentally friendly practices.
Energy-Efficient PoW-Based Blockchain- it is Possible?
This is where Proof-of-Work (PoW) or Proof-of-Stake (PoS) becomes interesting in terms of a blockchain’s environmental impact. Both PoW and PoS algorithms can have an immediate impact on energy consumption. PoW requires a greater amount of energy because miners must sell their coins to pay their bills. PoW was developed as the first blockchain consensus algorithm, used to confirm transactions and add new blocks to the chain for data storage.
PoS, on the other hand, is based on the percentage of coins held by a miner. Cryptocurrencies capitalizing on it to maximize energy efficiency because miners aren’t require to solve complex mathematical problems like in PoW blockchains; resulting in significantly lower consumption levels. As a result, PoS has become the default option for the vast majority of newer blockchains.
Having said that, the claim that PoW- Based blockchains are incapable of providing energy-efficient mining solutions is not entirely correct. New PoW technology has emerged as a result of scalability advances; allowing this form of mining to be as environmentally friendly and secure as PoS.
Though PoS blockchains appear to be better for the environment on the surface; they pose a number of issues due to their lack of scalability. However; while PoW-Based Blockchain appear to use more power at first; they have the potential to be greener and more secure than PoS-based blockchains.
During the blockchain boom; while most players in the industry chose the promises of high energy efficiency offered by PoS mechanisms; one organization, Kadena, focused on scalability and dedicated its time to building a more robust underlying blockchain solution.
While PoS-based blockchains argue that PoW is not sustainable; the most important factor contributing to PoW’s energy efficiency is the number of transactions per second (TPS). Kadena claims that it can push up to 100,000 TPS, which will be confirm during testing later this year.
This will not only be a record-breaking speed, but it will also be the only scalable PoW blockchain in existence. In comparison to PoS; which can only achieve 10 TPS at times, this is a much faster and more environmentally friendly protocol.
Many PoS systems that had high hopes for PoS to solve surface-level problems are now failing. Solana crashed due to high demand this week, Arbitrum was taken offline, and Ethereum was attacked. As the flaws in PoS-based blockchains become more apparent and the need for a more sustainable solution becomes more pressing; Kadena, the only sharded and scalable layer-1 PoW public network, provides a solid solution to the masses.
On Kadena’s website, you can learn more about how this leading blockchain is disrupting the DeFi space.