It is alarming to think but in some cases operations such as blockchain mining use as much energy as an entire city. But as the industry evolves – blockchain providers are obliged to build solutions with massively reduced carbon footprints, and as such – this shift may help providers achieve sustainability goals as well as to meet more stringent regulations that are likely to be introduced.

So by utilising emerging mechanisms for verifying blockchain transactions – such as Proof of Stake (PoS) validation protocols, businesses can greatly reduce their CPU/GPU data usage, therefore bringing down their blockchain related energy consumption, and in doing so you can add more value to a product, especially when it comes to enterprise grade consumers with bigger reputations and moral compliances to adhere to.

How verified transaction energy usage differs in the blockchain

One of the most popular uses cases for blockchain technologies are decentralised applications (Dapps). The front-end facing applications create a smart contract (transaction), which then must be verified. If the verification process is successful, it gets added to the transaction block. A transaction can only be added to the chain when a set of criteria is met. The verification process depends on the protocol sourcing a network of computers to execute the action.

Energy inefficient Proof of Work (PoW) protocol

In a network operating Proof of Work (PoW) protocol mechanisms, the transactions are validated by a mining node. The verifying nodes that operate in a PoW based network are solving a mathematical problem. They mostly use the computing power of a GPU or CPU to solve these problems. Very often, mining nodes use 100% of the available compute power. This method requires servers to be equipped with very powerful GPUs, which needs to run continually.

Energy efficient Proof of Stake (PoS) protocol

The adoption of Proof of Stake (PoS) blockchain validation protocol mechanisms are accelerating across the industry. When a blockchain is operating a PoS consensus mechanism, the transaction verification process is managed by a network of validators who run infrastructure equipped with the operational cryptocurrency of the network itself. They are driven by a common interest in maintaining network security and transparency. These “validators” operate a pool of staking nodes, which delegate a portion of their coin assets insuring the legitimacy of the transaction.

Crucially, the PoS nodes are not necessarily using a full resource capacity to compute these transactions, making it a much more sustainable blockchain ecosystem. As a result, many commentators anticipate an easing of the restrictions put in place by cloud service providers.

As a result of PoS – many commentators anticipate an easing of the restrictions put in place by cloud service providers.

The IT industry is experiencing a strong trend towards redundancy, security, transparency, and safety. If not already, blockchain-based technologies are going to be part of a fourth industrial revolution. The secure, decentralised databases that blockchain technologies offer draws criticism on sustainability grounds. This is because some types of blockchain databases utilise a large amount of power to compute and verify the data in that they are running a PoW consensus mechanism. In response to these concerns, many blockchain providers are now adjusting their data verification protocols to PoS to reduce energy consumption and meet green targets.

Further energy considerations beyond verifying transactions

Building a sustainable blockchain database is one thing, but building one that is efficient, cost-effective, and compliant is another. This requires careful planning, and an understanding of how underlying infrastructure impacts the success of your blockchain company.