Decentralized technology comes with lots of promising things in terms of its applications, especially in the fields of trade (not trading, mind you!), supply chain and document management. Yet, it is still at its infancy in its stage of development and has several weaknesses.
One of the criticisms often leveled against the decentralized technology is the amount of electricity it consumes, corresponding with the carbon footprint it releases to the Earth. Mining activities in blockchain — in which network participants extract a valid and verified ledger of data and information by solving some algorithmic mathematical operations — take lots of time involving lots of computers stored in the warehouse.
Yet, there are new innovations in the decentralized technology industry which can help make things better by producing some cryptocurrencies and decentralized technologies which are more efficient in their operations, thus friendlier to the environment.
The weaknesses with PoW and PoS
But before we get into the subject of how blockchain technology can be better in terms of energy use, let us address the reason why most block mining activities are highly energy-intensive.
Most mining activities which take place today usually happen in the financial domain, whereby the miners try to get as much reward and transaction fees as they can from the blocks which they successfully mine. As a result of this motivation, most of the miners who belong to the network use more than one computer in order to automate as many mining processes as possible. That’s one thing.
Another problem also lies with the proof-of-work (PoW) and proof-of-stake (PoW) consensus mechanics applied in these cryptocurrencies.
PoW identifies the fastest account on the blockchain to solve a mathematical problem which is essential to validate a transaction.
Meanwhile, PoS is the blockchain account which controls the majority of funds in his account, which matches the set of rules given by data already present in the blockchain. It is understandable that the account has more at stake in the integrity of the blockchain and more to lose when it gets hacked, thus dedicating more effort toward maintaining the blockchain’s security.
Yet, the PoW and PoS involve lots of trials and errors in the mining process, which extends the time in which the miners conduct their operations. Understandably, the inefficient and even slower processes involved with the PoW and PoS result in more electricity consumed in these operations.
An innovative solution: the proof-of-participation
Thankfully, there are some cryptocurrencies and decentralized platforms which have managed to reduce their energy consumption by focusing on use cases beyond the financial sector (such as in logistics, supply chain and document management purposes). They have also usually come up with different consensus mechanics which ensure a more efficient mining process than the PoW and PoS.
Among the new blockchain consensus mechanics is called the proof of participation, which is developed with the DecBC project. The proof of participation measures the rate of activities among all the nodes in the blockchain to ensure that all transactions conducted in the blockchain are genuine. The proof of participation also ensures that all miners (those who have created blocks or records of transactions which occur simultaneously in the network) have arrived at a consensus.
In order to accomplish the functions mentioned above, the proof of participation assesses the amount of blocks and transactions propagated by these miners. These blocks and transactions also have to contribute to the well-being and integrity of the blockchain.
By conducting such operations, the proof of participation comes up with refined codes and algorithms which reduce the amount of trials and errors involved with the mining activities. The fact that the proof of participation has been used mostly in use cases beyond simply crypto trading but instead to manage documents and goods distribution has also explained why it works more efficiently, thus consuming less energy.
This is a great milestone and we hope that as the blockchain technology evolves and jumps beyond its financial uses, it can come up with more efficient mining processes and thus emits less carbon footprint.