Crypto mining has recently been seen as having a major contribution to increased global energy consumption. Is there a way besides PoS to solve PoW’s problems with sustainability?
Recent years have seen regulators and environmental advocates apply pressure to reduce carbon footprints across multiple industries, including the developing cryptocurrency market. Senior US politicians have warned against crypto’s unsustainable energy consumption, arguing that the seven largest crypto companies are expected to increase their computing capacity to 2.4 gigawatts, a 234% increase from the current levels. According to them, this energy can be used to power 1.9 million, making the consumption rate ‘disturbing.’
While 99% energy reduction through the Ethereum PoS consensus is impressive, there have been concerns about whether it was the best solution. A blockchain developer and security researcher speaking to Cointelegraph stated that the Ethereum PoS is easier to exploit compared to the PoW system. Unlike the PoW systems, the PoS systems alert node validators in advance of what they will validate, thus giving them time to plan an attack.
These issues lead to a critical question; was the upgrade to PoS consensus the most practical solution?
Instead of a complete transition to a new PoS system, Ethereum could have considered alternative energy sources and strategies that could help reduce its carbon footprint. We all want the crypto industry to be more eco-friendly and sustainable, but not at the expense of the blockchain security and benefits that differentiate it from other traditional financial systems.
Creating a more energy-efficient crypto model
Reducing carbon footprint is ultimately up to the users. For example, the choice of equipment used and the duration spent validating transactions can significantly influence the amount of energy consumed. Therefore, one significant way to make crypto mining more sustainable would be to provide policies and incentives encouraging miners to adopt renewable energy infrastructure. For instance, New York legislators proposed a moratorium that temporarily suspends crypto-mining operations that use PoW to validate transactions.
However, the temporary ban does not apply to miners using renewable energy.
The incentives approach is apparent in some Ethereum forks, such as Pulsar Chain. We are using incentives to encourage users to embrace sustainable mining infrastructure. This eliminates the need for changing the entire consensus from PoW to PoS, thus maintaining core blockchain values of decentralization and democratization.
For example, studies show that Bitcoin has encouraged its miners to use renewables for their mining operations. The University of Cambridge’s Global Cryptoasset Benchmarking Study found that the number of Bitcoin miners using renewable energy increased from 56% in 2019 to 74% in 2020.
These numbers show that it is possible to promote sustainable crypto mining without necessarily changing the consensus.
Alternatively, companies can promote green mining that leverages solar, wind, hydroelectric and geothermal, and fusion-based renewable energy systems to make the PoS systems more sustainable. For example, a Costa Rican investor Eduardo Koppar dedicated his hydroelectric plants to promoting green mining. He exports the renewable energy through a container-like storage room for central processing units (CPUs) sealed against heat and moisture, thus eliminating the need for physical power grids. These CPUs are rented to mining companies.
Recently, there has been an increase in Bitcoin mines that run on renewable energy. Energy companies are creating data centers that help monetize excess renewable energy produced by diverting it to power the energy-intensive PoW ecosystem.
Sustainable PoW ecosystems such as Pulsar Chain can leverage these alternative energy solutions to empower crypto miners and reduce the high carbon footprint characterizing the crypto sector.
Are you looking to learn more about the Pulsar Chain and sustainable PoW ecosystems? Click here to check out the project’s whitepaper. Join our Telegram community to chat with like-minded individuals.
Disclaimer: Readers should keep in mind that the information contained in this article does not constitute investment advice. The ideas and strategies presented should not be used to make any investment before assessing your financial situation and consulting a financial professional.