Earth Day 2020 brought a renewed appreciation for the delicate balance between people and the world in which we live. We just have to look at the amazing heat maps that track pollution in major cities before and during the COVID-19 outbreak to see our irrefutable impact on the planet.
The roles that blockchain and cryptocurrency play are equally undeniable. According to Anwar Hasan, professor of electrical engineering and information technology at the University of Waterloo, Bitcoin has an energy footprint that corresponds to a country the size of Austria.
This is due to the enormous amount of energy that Bitcoin’s proof-of-work algorithms require. It is clear that a more sustainable system for blockchain and cryptocurrency offers significant benefits for the planet.
Proof of work
Proof-of-Work was originally developed in 1993 to prevent denial-of-service attacks. Bitcoin is used by Proof-of-Work to validate transactions within its blockchain. This is achieved when miners compete against each other to solve complex math puzzles.
As these puzzles have become more complex over time, the processing power and energy required to solve these puzzles has increased exponentially. The result is a stressful load on the energy sources.
It also has catastrophic effects on the environment. Research shows that Bitcoin mining is responsible for producing around 22 megatons of carbon dioxide per year, a carbon footprint equivalent to the entire city of Las Vegas.
Energy saving through ripple
In collaboration with Ripple’s University Blockchain Research Initiative (UBRI), Professor Hasan and research fellow Crystal Roma are analyzing the blockchain to find out how cryptocurrency can be made more environmentally friendly.
As part of this research, the team released a paper that quantifies the cost of running an XRP validation node to be approximately $ 62.84 per year based on average wall energy. This is in stark contrast to a 2018 report that found that the price of mining just a single bitcoin could range from $ 531 to $ 26,170, depending on electricity costs in a given country.
“Energy consumption is a big problem for the blockchain and it is important that we identify better alternatives that can replace proof-of-work algorithms,” said Professor Hasan.
He hopes this research will help others understand the cost-effective benefits of an XRP validator versus Bitcoin proof-of-work, and that it will allow businesses to participate more in the Ripple network.
UBRI and University of Waterloo
In addition to this work to improve blockchain sustainability, Professor Hasan has used UBRI to enable important research activities through conferences and new scholarship opportunities. He also plans to allocate funds to more training and research to address other blockchain challenges, including transparency in health insurance to prevent fraud, as well as scalability and privacy efforts that can protect blockchain from the potential of future quantum computational attacks.
To learn more about UBRI, please visit our UBRI website and look for monthly Insights posts in the On Campus series.