Energy Efficiency in Blockchain and Cryptocurrency Protocols

One of the largest debates around crypto mining and blockchain initiatives is that they consume too much electricity or energy, harming the environment. Realistically, the opposite couldn’t be more true, and the bigger picture is largely misunderstood. For one, all of the world’s Bitcoin mining now uses over 50% renewable energy to power production, making it the top industry in the world to utilize the most renewable energy. Two, each block that is mined is essentially cleaning the world, taking energy efforts from every other industry production that produces enormous amounts of waste around the world. The crypto asset class is consolidating all of the world’s energy into providing the most rewarding piece of financial sovereignty for all (Scarce money = Abundant goods). Think about all of the waste large corporations produce just based on maximizing profits each year and disregarding other variables that may harm the planet-- If you're interested in a documentary about this concept, watch Buy Now: The Shopping Conspiracy. Think about the resources needed to extract other commodities like oil, coal, gold, etc., which are inflationary, harmful to humans in many ways, and damage the planet. The financial services industry alone accounts for about 25% of the global economy, which could ultimately be replaced by Bitcoin and crypto-related products. Billions of hours of labor are dedicated to these unnecessary human-led financial services, including lending, investing, and banking, which are already being replaced by decentralized protocols. All of this aside, there is no energy wasted in the process of crypto mining, and it balances our power grids in times of highs and lows in the duck curve of energy use. Underutilized or spoiled energies can be captured by mining processes and turned into digital asset compute or converted into heating, electricity, etc. for countries worldwide.

MARA, the largest public bitcoin mining company in the world, is at the forefront of these advancements, building on what is to be considered the most revolutionary technology of our era and for generations to come. There are endless inefficiencies in our energy systems today, and mining operations can consume excess or stranded/spillover energies to mine more bitcoin or help stabilize power grids. This dual-purpose functionality provides unprecedented operational flexibility for utility companies, enabling them to optimize energy distribution and utilization. This impact extends far beyond cryptocurrency, offering solutions to the most pressing challenges in renewable energy adoption: intermittency and surplus production. Other than grid stability, this process incentivizes the development of renewable energy projects and utilizes energy that would otherwise be wasted. Learn more with this visual below.

According to Nasdaq.com, “You can expect Bitcoin’s energy use to trend towards infinity in the long term [with Point99 slated for 2034 and the last Bitcoin to be mined in 2140], and its environmental impact should trend towards zero.” Also, and very importantly, “Over 1 billion people have no access to the electrical grid but still have access to energy via physical fuels. Just like they don’t need the grid to survive, neither do bitcoin miners, many of whom are now using flared methane in remote oil fields to mine bitcoin. Of the 160,000 TWh of energy generated worldwide each year, 50,000 TWh is lost to inefficiency [or about a third which is staggering]..."

The majority of this information is relayed from Daniel Batten, a climate technology investor, advisor, and Bitcoin analyst. He found that “[based on a 50MW solar farm], using Bitcoin mining [in tandem] reduces CO2 emissions by 50,000 tonnes/year” and cuts down the ROI timeframe from 8.1 to 3.7 years.

Take a look at worldwide energy consumption in the chart below, most of which comes from gas, coal, and oil.

Then, take a look at the emission intensity across different sectors, showing that Bitcoin mining has the lowest intensity per kWh of any sector of the economy, with this trend projected to continue.

Point99 in 2034 is the inflection point of absolute scarcity where the last 200k Bitcoin to be mined will take 106 years - creation will be offset by lost Bitcoin and supply will become fixed. -- Michael Saylor of MicroStrategy

A new research paper published by Chemical Engineering Transactions covers the pairing of bitcoin mining with green hydrogen energy and it shows immense abilities in carbon offsetting, boosting renewable energy capacities and negative emission technologies. See their diagram below to learn more about the moving parts involved.

With all of this being said, Bitcoin still does consume a large amount of electricity, but comparatively to other resources and based on the revolutionary technology made available, it offsets some of these numbers: From plasbit.com, Bitcoin mining currently uses about 173 TWh of electricity per year, releases about 86 megatons of CO2 per year, and rig processes consume about 1.65 cubic kilometers or 660,000 Olympic-sized pools worth of water each year.

Now that we have covered some details behind energy usage and how Bitcoin/crypto mining is one of the ways we can lead the world towards zero waste and zero emissions, let’s delve into some specific top blockchain protocols taking eco-friendly carbon emission initiatives further, even in route to turn carbon-negative.

1. Ethereum (ETH)

   1. The merge from PoW to PoS reduced carbon emissions by up to 99.95% for the entire ETH blockchain

   2. Carbon footprint per transaction dropped from 109.71 kg to 0.01 kg

   3. Compared to Bitcoin’s roughly 173 TWh of electricity per year, Ethereum consumes about 0.0026 TWh/yr

2. Solana (SOL)

   1. Climate-focused and carbon-neutral

   2. PoH (Proof-of-History) aids in achieving consensus on top of PoS mechanism, improving transaction and processing efficiency

   3. Claims that a single transaction uses less energy than a single Google search - 0.00051 kWh per transaction

3. Polygon (POL)

   1. Leverages CO2-negative infrastructures to achieve carbon and climate neutrality

   2. Launched a Polygon Network Sustainability Dashboard to track location-specific carbon emissions

   3. 53% of validator set running on 100% renewable energy

4. Cardano (ADA)

   1. Ouroboros PoS network allows for some of the most energy-efficient transactions

   2. Claims to be up to 47,000x more energy efficient than Bitcoin - 0.5479 kWh per transaction

   3. Climate partnerships in technological innovation research and aims to be carbon-negative

5. Stellar Lumens (XLM)

   1. Facilitates cross-border transactions and essentially eliminates the nostro-vostro process - 0.00022 kWh per transaction

   2. Its Stellar Consensus Protocol reduces energy consumption and is committed to minimizing environmental footprint along with financial inclusion

   3. Partnerships in real-world financial solutions and leads eco-friendly practices

6. Hedera (HBAR)

   1. Hashgraph consensus algorithm enables high throughput with minimal energy use

   2. Carbon-neutral and can process 10,000+ tps in a single shard with none discarded - 0.000003 kWh per transaction

   3. Working with Crypto Climate Accord to go carbon negative through carbon offsetting and credit programs

7. Near Protocol (NEAR)

   1. Carbon-neutral and uses NightShade sharding scaling mechanism

   2. Claims to be 200,000x more energy efficient than Bitcoin

   3. Audited for carbon footprint offset and launched a forestation tracking solution called Open Forest Protocol with many other environmental initiatives

8. Algorand (ALGO)

   1. World’s first pure PoS (PPoS) mechanism, which means it selects miners at random regardless of their investment and it is possible to receive ALGO rewards simply by staking it in a wallet

   2. Commitments to offsetting carbon footprint with fast transactions - 0.0002 kWh per transaction

   3. Designed for sustainability initiatives and collaborating with carbon credit programs like CimateTrade

9. Storj (STORJ)

   1. Decentralized cloud storage that uses spare capacity of computers and servers to reduce carbon emissions

   2. Cofounded the Digital Sustainability Alliance

   3. Splits data into multiple pieces on its distributed network, reducing energy requirements for nodes

10. EOS Network (EOS)

    1. Can process millions of transactions per second (tps) with minimal energy

    2. developers for streamlining the creation and deployment of smart contracts

    3. Claims to be 66,454x more efficient than Bitcoin and 17,236x more efficient than Ethereum

11. Tezos (XTZ)

    1. Self-amending protocol which means it can upgrade itself without a hard fork, reducing resource consumption

    2. Continuous energy efficiency and sustainability improvements

    3. Claims to consume 2,000,000x less energy than PoW networks

12. Celo (CGLD)

    1. Carbon-negative non-profit blockchain ecosystem that builds DeFi tools and services and makes them more accessible

    2. Inclusivity is at its core with regenerative finance (ReFi), which promotes and restores sustainability within monetary infrastructures like community development programs

    3. Claims to process up to 7,000,000 transactions per ton of CO2 emitted by its architecture

13. Chia Network (XCH)

    1. Energy-efficient blockchain technology that uses Proof of Space and Time (PoST), which combines two consensus mechanisms without compromising network security

    2. Proof of Space harnesses unused disk space to farm new blocks, and Proof of Time adds time predictability and mitigates attacks

    3. Champion approach to sustainability for blockchain operations - 0.023 kWh per transaction

14. Powerledger (POWR)

    1. World’s first blockchain energy trading platform, creating a secondary market for small-scale energy and carbon credit generation

    2. Allows consumers and producers to trade energy in real-time and helps companies assess carbon-related risks with strategies to manage them

    3. Creates more efficient and reliable options for consumers and governments with track records in Thailand, Australia, and France

15. Iota (IOTA)

    1. Reengineered distributed ledger technology called Tangle

    2. Secures exchange of value data without fees for IoT (Internet of Things) and confirms two transactions for every transaction - 0.11 kWh per transaction

    3. One of the greenest cryptocurrencies available using DAG (Directed Acyclic Graph) architecture

16. Currency Of The Internet (COTI)

    1. Powered by a next-level cryptographic protocol called Garbled Circuits, uses Directed Acyclic Graph (MultiDAG) architecture, and leverages Trustchain ledger technology, which increases scalability to 100,000+ tps and boosts privacy with unique encryption dynamics

    2. Up to 250x lighter computation than other privacy protocols and up to 10x faster in transaction settlement

    3. Proof-of-Trust infrastructure with asynchronous confirmation of transactions and versatile across three distinct mainnets

17. Kaspa (KAS)

    1. PoW L1 hundreds of times faster than Bitcoin, with 1-second visibility and 10-second confirmation for transactions

    2. Uses an algorithm called kHeavyHash, which has the potential to use less energy over time, does not waste any blocks, and runs on a first-of-its-kind distributed ledger with Directed Acyclic Graph (DAG), making it one of the most advanced systems for efficiency, scalability, and decentralization

    3. Goals to achieve new levels of the blockchain trilemma: security, decentralization, and scalability

18. Bitgreen (BITG)

    1. Designed specifically to address eco-friendly environmental challenges, with a hybrid PoS/PoI (Proof-of-Influence) system

    2. Transactions enhance green stance with minimal energy usage

    3. Promotes activities like carpooling with global scale environment contributions

19. Nano (XNO)

    1. Lightweight protocols with ultra-efficient processing power and global green development in financial technologies

    2. Near-instant transactions on unique consensus mechanism, Open Representative Voting (ORV)

    3. Single transaction power equivalent to one light bulb in the same time frame

20. Solarcoin (SLR)

    1. Developed to incentivize solar energy via green blockchain on a decentralized P2P (peer-to-peer) energy market

    2. Fourth-generation blockchain using Energy Web Chain and Proof-of-Authority (PoA) consensus that claims to be 50x more sustainable than Bitcoin

    3. Notes that solar energy is now the [most inexpensive] fuel in 150+ countries

In conclusion, the crypto ecosystem is vast with extraordinary purpose in enabling the digital economy to function in the background of our lives as a decentralized programmable technology, instead of within the hold of central authorities. Energy conservation is at the forefront of the entire ecosystem and the aforementioned material goes to show that immense measures are being taken to drive the mission further as time goes on. With the evolution and combination of blockchain and AI being implemented more in data centers, network uptimes are consistent at 99.99% and at the speed of light.