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Can Blockchain technologies clean up their act?
Ethereum may be finally reducing its dirty practices with a switch to a less energy intensive business model.
There is broad agreement among scientists that global warming has increased in direct proportion to the cumulative rise in the total amount of carbon dioxide in the atmosphere. We need to get CO2 emissions below net zero to stabilise the climate and preserve life for future generations. The dirty practices of crypto currencies have come under a lot of fire over recent years and finally, the industry is reacting.
The Proof-of-Work (PoW) model, favoured by coins like Ethereum and Bitcoin, may well have accounted for as much annual CO2 production around the world as the countries of Venezuela (83TWh) and Pakistan (96TWh) respectively. On 15th September, Ethereum moved away from its PoW model, towards a less energy-intensive Proof-of-Stake (PoS) model.
The PoW model essentially sets up a race to the finish line. There are huge financial gains to any group able to run a supercomputer and become the first to get a block mined and sealed. Energy and power requirements have soared as the network expanded and the rewards for mining grew.
A PoS blockchain approach, on the other hand, uses a combination of reputation to identify reliable and experienced miners. After that, though, the 'sealed' block is allocated randomly, a kind of blockchain lottery, and the winnings go to one lucky participating miner. The costs of running high powered but dirty hardware are no longer justified by unpredictable rewards.
Early signs suggest that the heavy hitters in the PoW business have not given up their bad ways and have switched instead to other currencies. The EthereumPoW network was set up in response to Ethereum's change and went from 0 to 80 terahashes on the 15th September, the day of the changeover.
It may still be good news for the planet, though. As energy prices rise, many smaller miners are being priced out of the PoW business, indirectly removing carbon production, and the rises in the value of new PoW currencies may prove to be temporary, encouraging more to switch to better models.
 See https://iopscience.iop.org/article/10.1088/1748-9326/aa98c9 for a full discussion of how they reached these conclusions
12 Feb 2024
11 Jan 2024