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Innovating Proof-of-Work: How PoW Consensus Can Be Made Sustainable

The post Innovating Proof-of-Work: How PoW Consensus Can Be Made Sustainable appeared first on Coinpedia – Fintech & Cryptocurreny News Media| Crypto Guide

In recent years, the questions surrounding the impact of cryptocurrencies on the environment have taken center stage.

Several studies conducted in the past couple of years have indicated that mining, more specifically Bitcoin mining, uses a significant amount of energy and is among the top contributors to greenhouse gas emissions. 

Since the Bitcoin network is powered by thousands of computers worldwide, it is almost impossible to ascertain precisely how much electricity and other non-renewable resources it consumes.

However, the University of Cambridge recently published a report indicating that, on average, Bitcoin mining consumes around 121.36 terawatt-hours per year – more than the annual consumption of Argentina and more than the cumulative consumption of Big Tech companies Facebook, Microsoft, Apple, and Google.

Due to this increased consumption, some countries have banned Bitcoin mining altogether. There is no denying that Bitcoin and several other cryptocurrencies require a lot of energy, which leads to a ton of electronic waste (e-waste) that negatively impacts the environment. 

The Problem With PoW Chains

While it is important to address Bitcoin’s environmental impact, it is also equally important to understand why so much energy is consumed in the first place.

Bitcoin consumes such alarming amounts of energy because of the network’s consensus mechanism. The Proof-of-Work (PoW) mechanism Bitcoin employs to secure the network is the same solution introduced decades ago to prevent DDoS attacks and spam.

The PoW process depends on ‘mining,’ which involves validating and recording new transactions in the Bitcoin network. Since Bitcoin’s release, the mining process has become increasingly complex and competitive due to mining difficulty adjustments.

At the same time, the value of BTC has skyrocketed. On top of it, the total number of BTC that can be mined is hard-capped at 21 million units, of which over 90% are already in circulation.

The higher the price of BTC, the greater the competition between miners, and the harder the cryptographic equations become to solve.

To solve complex problems, devices need more computational power, which means higher energy consumption and equally higher greenhouse gas emissions.

Earning miner rewards by providing the required computational power to the PoW chains has become an industry in itself. With multiple organizations continuously increasing their computing power to generate higher rewards, the impact on the environment, too, is rising at an alarming rate.

This is concerning, especially for those who have realized the potential of blockchain and how it can transform existing business models for the greater good.

As such, several initiatives have been launched to make cryptocurrencies more sustainable. From signing up for Climate Change Accords to testing alternative mining technologies, crypto businesses are leaving no stone unturned to become carbon neutral.

While several existing PoW blockchain networks are looking for other alternatives like Proof-of-Stake (PoS) and other similar consensus mechanisms, Minima, a third-generation blockchain project, introduces a promising alternative to PoW that is not only energy efficient but far more inclusive and accessible than legacy chains.

Introducing The World’s First Ultra-Lean Blockchain

Designed to be highly compact while maintaining total decentralization, Minima removes the complex structure of thousands of miners to verify and record on-chain transactions, resulting in an ultra-lean blockchain protocol that can be operated from mobile phones and IoT devices. 

By introducing a TX-PoW consensus mechanism, Minima enables users to run full validating and constructing nodes right from their smartphones, thus eliminating the need to invest in specialized computers or mining rigs.

The TX-PoW-based protocol allows users to seamlessly and trustlessly perform small amounts of validation and recording and then sum up all of the smaller pieces into a full block equivalent to that of PoW chains.

Due to its unique mechanism, everyone can join the Minima network as a full node without putting up any substantial investment like those demanded by PoW mining operations.

Since each node can operate via smartphones and IoT devices, it cuts down energy consumption to a huge extent.

By extension, the lower the energy consumption, the lesser the environmental impact. At the same time, since each user can run a node, it eliminates centralized organizations from taking over the network, making Minima more inclusive and fair compared to existing chains.

The Minima blockchain protocol consists of two distinct protocol layers: layer 1, known as Minima, serves as the base verification layer, while layer 2, known as Maxima, operates as the transactional layer.

By design, these differentiated layers play critical roles in helping Minima offer faster transactions at low costs. 

Since each user on the Minima chain runs a full node on their devices, the network is truly decentralized, making it more secure and scalable than other networks.

As such, it is no hyperbole to claim that Minima is the first potential solution to the “Blockchain Trilemma” of maintaining the perfect balance between scalability, security, and decentralization.

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