Cryptos are exploding the Web3 space, and that is something undeniable. In contrast, there is also a concern widely prevalent in the country regarding cryptos. They are the energy consumption of the computers for mining the assets that live on the blockchain, causing a serious climatic impact.
Crypto organizations in line with addressing this issue are bringing about major adaptations to reduce carbon emissions with the motive of going eco-friendly.
On account of Earth’s day 2022, crypto enterprises have played their fair part in approaching the concerns about carbon emissions, which will be the blog’s talk. Stay tuned to grasp the tweaks added to the blockchain to ensure sustainability.
Bitcoin mining - Picking up its pace toward green energy
Bitcoin was the first to explode in the crypto space, which marked the beginning of the Cryptocurrency era. Since its inception in 2009, its growth trajectory has been splendid, with the investors paying keen attention to it. Interestingly, there can ever be only 21 million Bitcoin in circulation, accounting for its demand.
But as a matter of fact, the drawback of this value-holding coin is that it consumes a lot of energy to be mined as it functions on the Proof of Work mechanism. So, there were increased objections to Bitcoin for this reason.
To overcome that, Bitcoin is turning towards operating on renewable energy. And yet another good news is that there is a 1% increase in the utilization of renewable energy from the previous year’s value as per the data provided.
Currently, the Bitcoin mining industry uses 58.5% of renewable energy. So, one of the greater performers of the crypto space has taken a huge step in moving toward a sustainable blockchain space.
Ethereum - In the making of functioning on Proof of Stake consensus mechanism
A consensus mechanism determines how the nodes of the network validate the blocks. It verifies the correctness and ensures only a single new block is added to the blockchain.
There are various types of consensus mechanisms, among which, let’s discuss the Proof of Work and Proof of Stake mechanisms in detail.
Proof of Work: PoW uses computational mathematical algorithms to validate the transactions. These mathematical formulas require a lot of computational power to do calculations and create blocks for the transactions, called mining.
The mining process requires a lot of energy and results in environmental degradation.
Proof of Stake: As an alternative to PoW, the PoS or Proof of Stake mechanism came into effect. In this method, the user has to stake the coins and participate in validating the blocks. Depending on the coins the user stakes, they are selected to approve the blocks and rewarded with cryptocurrencies. This solves the problem of high energy consumption, unlike in the Proof of Work.
Ether, which runs on the Ethereum blockchain, excellently performs in the market but uses the PoW mechanism.
Therefore in an approach to going eco-friendly, announcements have been made to transform Ethereum to employ the Proof of Stake mechanism.
As blockchain technology is finding growing use-cases, many new ways are found adjacently to overcome its downsides. Doing so not only increases the profitability of the digital coins but also helps in the process of going mainstream.
That is what sustainability move of cryptocurrency exactly aims at 100% utilization of renewable energy. This is captivating many new companies to rope into this culture.
Blockchains are decentralized and rely on smart contracts to validate the transactions. As there are smart contracts to dictate the terms for a specific action to be performed, manual intervention can be avoided.
Thus, this is all directed toward making Web3 more efficient and advantageous than the previous versions.