We are in the age of climate change. The big global issue must be addressed quickly to prevent the worst. The topic of a sustainable economy is becoming more and more urgent. Many states, cities, companies as well as private individuals have committed themselves to sustainability.
Cryptocurrencies are not an end in themselves, they can make meaningful contributions. As I have stated several times, cryptocurrencies can help solve current problems to stop climate change. In this context, mention should be made of the use as secure, fast data and payment medium in the IOT, in the entire smart world, in the transformation of the energy industry and in the entire process to Industry 4.0. That’s why I’m committed to Deposy. Deposy is a deposit system with an innovative approach to waste management. Cutting-edge IOTA/Tangle technology enables a better protection of our climate and environment. Deposy is a system with a positive social impact in communities as well as in global use.
But cryptocurrencies also consume energy themselves and that is why their use in a sustainable world is often controversial.
There are now hundreds of cryptocurrencies in existence and the technological backbone of many of these currencies is blockchain, a digital ledger of transactions. The competitive process of adding blocks to the chain is computation-intensive and requires large energy input. Experts have developed a method a methodology for calculating the minimum power requirements of several cryptocurrency networks and the energy consumed to produce one US dollar’s (US$) worth of digital assets. From 1 January 2016 to 30 June 2018, it is estimated that mining of Bitcoin, Ethereum, Litecoin and Monero consumed this average to generate one US$, respectively:
- Bitcoin: 17 MJ
- Ethereum: 7 MJ
- Litecoin: 7 MJ
- Monero: 14 MJ
Bitcoin vs. Ethereum
When “mining”, generating bitcoins, computers solve computational problems in competition. Those who create this first and create a new block that stores new Bitcoin transactions will be rewarded with bitcoins. The more computing power involved in this process, the more complex the invoices become.
In view of the multiplication of the bitcoin price in recent years, the computing power used is growing exponentially. In the early days, regular consumers with their home PCs scrounged, but today professional operators of server farms dominate the business. They use hundreds of thousands of high-performance processors (miners) specialized in the mining of bitcoins.
The energy demand of the Bitcoin system is breathtaking. It currently consumes about 67 terawatt hours per year. That’s more power than the entire Swiss economy needs: 0.3 percent of global consumption. And it is getting more and more extreme.
Ethereum mining consumes a quarter to half of what Bitcoin mining does, but that still means that for most of 2018 it was using roughly as much electricity as Iceland. Indeed, the typical Ethereum transaction gobbles more power than an average U.S. household uses in a day.
Developersare already working on new code for the blockchain behind the cryptocurrency. The main point of the innovation is the change of the hashing algorithm from the energy-hungry proof-of-work (PoW) to the less power-consuming proof-of-stake (PoS).
Currently this is Bitcoin and Ethereum Mining a huge waste of resources, even if you don’t believe that pollution and carbon dioxide are an issue. Even if you pretend that most of the power for mining is from renewable sources, that’s a huge waste of energy and has nothing to do with sustainability.
Sustainability with IOTA
Fortunately, today there are alternatives to the traditional blockchain, which has tried to solve the problem with power consumption. One of them is IOTA, with their new and innovative technology called Tangle, they are solving this topic. IOTA has long been in terms of energy consumption where Ethereum wants to go. The reason is that IOTA does not require the energy-intensive mining of blocks. The total number of IOTA’s is already available from the beginning.
The energy consumption at Blockchain is caused by Miner. In IOTA’s Tangle, however, each participant contributes to the process of validating the transactions so that consensus is achieved without the need for miners. Simply stated, before you can make a transaction, you must confirm two random previous transactions on the network. In this way, each participant in the network is a separate miner with its own device.
Since this validation does not require heavy calculations, the network can be maintained by relatively small devices with limited power and computational capacity. Of course, the IOTA nodes and transactions also consume computing power and thus generate power consumption, but this is negligible compared to that caused by traditional blockchain technology.
This is also one of the reasons why IOTA can target the growing market with sustainability. This is more important today and IOTA is very well prepared for the future with regard to this topic
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