We live in a society that are headed towards a greener and more sustainable future. This demands that development of new technology is in line with this vision of a sustainable society. Blockchain consume enormous amounts of power today, with big miningfarms running continuously to maintain the networks of the various blockchains. In the wake of traditional blockchains, new alternative and innovative technology rises, which focuses on a sustainable solution. One of the most promising projects in the realm of sustainable solutions is IOTA, which I will elaborate on later in the article.
Status Quo — Is blockchains sustainable?
Development of blockchains and the use of blockchaintechnology have had an exponential growth lately. This rapid growth may blind people, so that negative aspects of the technology are neglected or ignored. Did you know that the Bitcoin blockchain, as of today, has a higher power consumption than a selection of 159 countries in the world? According to this estimate composed by Digiconomist [1], the power consumption is equivalent to 0.13% of the total power consumption in the world. To put this into perspective, this would rank Bitcoin, if it were a country, as 61th in a list over countries with the highest power consumption.
The reason behind this high power consumption lies in how the technology behind Bitcoin operates. The blockchain technology behind Bitcoin utilizes something called “Proof-of-Work” to acquire consensus in the network. This mechanism is to make sure that the security of the Bitcoin-network is maintained. This “Proof-of-Work” is done by the so-called miners, which solves given mathematical problems for a reward.
So, what is the problem with this? Well, the problem appears when we look closer at how this reward system works. To solve these hard mathematical problems, a lot of computing power is required, which in terms also equals high power consumption. Nobody will do these calculations without a compensation. Of this exact reason, the system is made so that miners are given Bitcoins as a reward because they “mined a block” and thereby helped secure the network. Incentives like this makes this a rather valuable business case. This is one of the reasons as to why there are big miningfarms running continuously to solve mathematical problems all over the world today.
One Bitcoin transaction has the power consumption equivalent to what the average household has over the course of one month, according to an report from the dutch bank ING [2]
Nobody could foresee the high power consumption that the network has today, when the technology behind Bitcoin was first developed in 2008. The way the blockchain operates today is definately not sustainable, and can in time become one of the major contributors to global warming [3].
Fortunately, the development of these technologies has come far since then, and there are a lot of projects out there that aims to solve this problem. One of the most ambitious and innovative projects that claims to solve this problem, is IOTA, which I will elaborate on in the next part of the article.
IOTA — An eco-friendly alternative?
Fortunately, today there are alternatives to traditional blockchain that tries to solve the problem with power consumption. One of these is IOTA, with their new and innovative technology called the Tangle they are tackling this issue. In the Bitcoin network there are dedicated miners, as stated earlier in the article. However, in IOTAs Tangle, every participant is contributing to the validation process of the transactions, so that consensus is reached without the need for dedicated miners. Simply explained, before you can make a transaction, you have to confirm two random previous transactions in the network. This way, every participant of the network is its own miner with its own device.
Since this validation does not require any heavy computations, the network can be maintained by relatively small devices, with limited power and calculation capacity. This is also one of the reasons why IOTA is aiming at the growing Internet-of-Things market.
Unfortunately there are a lot of big investors in Bitcoin, with enormous amounts of money involved, which does not want to see IOTA succeeding. This is a conflict of interest that has made IOTA being under constant attack as of late. I hope environmentalists joins the fight before it is to late, and the industrial standards are set.
Definition: Sustainability
« The quality of not being harmful to the environment or depleting natural resources, and thereby supporting long-term ecological balance»
I believe that sustainable solutions like the one IOTA is proposing will be a vital part of the green movement in the coming years, and that IOTA will manifest itself as an eco-friendly alternative to todays blockchain.
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DISCLAIMER: I am not part of the IOTA Foundation and views are my own. You should do your own research before making investments.
