Many researchers have studied the impact of cryptocurrencies on the environment. According to estimates from Digiconomist, the power consumed by the entire Bitcoin network has been more than many countries like Peru, New Zealand, and Hungary. That’s comparable with CO2 emissions of 20 megatonnes — or roughly 1m transatlantic flights.
To understand the reason for these data presented it is important to understand what is Proof of Work.
Proof of Work is the algorithm that guarantees the consensus in the network (in the case of Bitcoin and other cryptocurrencies) through the solution of a cryptographic problem. A new block is created when the solution to the problem is found. This process is known as mining.
However, there are many people, known as miners, competing with each other to be the first to “solve the problem” and get the reward. To be the best in this competition, you need to invest in powerful hardware. For this reason, there are many companies that have created very specific mining machinery, known as ASIC’s. These machines dominate the mining market and are much more efficient than ordinary computers, however, these machines also consume a lot of energy.
This enormous expense of energy is practically indispensable to keep the network extremely safe in the Proof of Work model.
Nano: Delegated Proof of Stake
In the case of Nano, the consensus model is Delegated Proof of Stake. This consensus model was created by Daniel Larimer after he realized that Bitcoin mining was too wasteful of energy.
Delegated Proof of Stake uses real-time voting combined with a social system of reputation to achieve consensus. It can be seen to be the least centralized consensus protocol compared to all others as it is the most inclusive and every token holder can exercise a degree of influence about what happens on the network. In this model, there is no competition like in the Proof of Work, the amount of coins delegated to you defines your weight in the network. Besides that, many more improvements to the Nano protocol are being made, which willmake the network even more efficient and increasingly cheaper to run a node.
Nano is green
For each transaction, Nano uses only 0.000112 kWh. So, operating at 7,000 transactions per second, the entire Nano network could be powered by a single wind turbine.
Throughout its lifetime a LED light bulb uses about 212.5 kWh. This means that a simple LED light bulb consumes the same amount of energy as is necessary to transact 1,900,000 times in the Nano network. A simple hot bath consumes 97.2 kWh. This energy is enough to transact 870,000 times in the Nano network.
When we compare Nano’s energy expenditure with a simple day-to-day situation we can realize how efficient the network is. Besides that, the trend is for computers to become more and more efficient, not only in terms of “power” but also in energy consumption.
The future of the cryptocurrencies is green.