Blockchain, a V8 technology as the world goes green
Published On: 27th December 2018
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All emerging technologies have emerging challenges to overcome. For the IOT, its security and scalability; for Machine learning, it’s probably the privacy and ethical concerns, and for blockchain, it’s the energy consumption (among others). Let’s be honest, Blockchain is an energy hungry beast, and it is certainly one of the areas that any business considering a blockchain implementation (whether in the crypto currency space or further afield) should look at.
A recent report by the economist estimates that Bitcoin (leading blockchain implementation) consumes 22 terawatt hours (TWh) per year, close to that of Ireland!
[And Bitcoin is not the only game in town, with roughly 1600 cryptocurrencies available today]
However, it’s not necessarily the energy consumption that’s the primary challenge but rather the fact many bitcoin transactions are powered by coal-fired power plants, which flies in the face of the recommendations given in the IPCC report on climate change.
So why is blockchain so energy hungry?
It all comes down to the consensus mechanism, the way in which transactions are authenticated using what is called the “proof of work” algorithm.
The whole point is the amount of work done by the algorithm proves the data in a new block is valid, and this involves the miner solving complex cryptographic problems in a brute force manner. This takes a lot of computing power which takes a lot of energy.
This is becoming a real problem., Norway has announced, that it be will removing subsidies for blockchain mining in Jan 2019 and similar actions have been taken by China, Canada and the US .
So, what happens Next?
[That’s a good question and I don’t have the answer]
We could look at ways to incentivise existing blockchain miners to use renewable forms of energy and reduce the carbon footprint. To do this, we need to ensure that renewable energy is cost effective enough to tempt away miners from fossil fuels. However, the decentralised nature of blockchain will make this difficult to enforce.
[Miners will go where the cost is cheapest, because that’s how they make money]
We could look at making the consensus algorithm more energy efficient, and this is the route Ethereum are taking, working to move from a “proof of work” to a more efficient “proof of stake” protocol. There are some concerns however, that “proof of stake” is not as secure and Ethereum’s work is currently behind schedule.
Whatever happens, it clear that blockchain has a few challenges to overcome if it is to remain a viable technology in a greener world.
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Sean Gulliford heads up our Connected Devices team. He holds a B.Eng(Hons) in Digital Systems Engineering, a M.Sc in Machine... Read More From Sean Gulliford
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