Energy usage has emerged as a pressing and contentious issue within the blockchain space. As the technology continues to gain prominence across industries, concerns regarding its environmental impact have grown in tandem.
The unprecedented growth of blockchain networks has raised questions about the sustainability of their energy consumption. With the world increasingly focused on reducing carbon footprints and combating climate change, the substantial energy demands of blockchain have propelled this topic to the forefront of discussions in both the crypto asset and broader technological spheres.
Consequently, understanding the significance of energy usage in blockchain has become essential in evaluating the long-term viability and ethical considerations of this transformative technology.
A reliable method of evaluating blockchain energy efficiency
These issues are considered in detail in the new white paper: A Comprehensive Approach to Blockchain Energy Efficiency: Evaluating and Improving Transactional Throughput and Mining Efficiency.
The white paper, which was written by Bryan Daugherty (Global Public Policy Director at BSV Blockchain Association) and Gregory Ward (Chief Development Officer at SmartLedger), introduces an innovative set of formulas tailored to evaluate energy consumption, transactional throughput, and mining efficiency in blockchain networks.
By integrating these metrics into an Adjusted Energy Consumption Rating, the duo offer a comprehensive and accurate assessment of a network’s efficiency and environmental footprint.
‘Our objective is to support the development of cutting-edge blockchain technologies while addressing environmental concerns and underscoring the importance of transactional throughput. In doing so, we aim to maintain the security offered by Proof of Work without compromising sustainability or promoting a false sense of eco-friendliness,’ said Daugherty.
‘To achieve this balance, we propose the creation of an energy efficiency reporting and rating system for transaction processors, modelled after the Environmental Protection Agency (EPA) emission standards. We also outline future milestones for a transition to 100% renewable energy sources.’
Daugherty explains that the framework also encourages sustainable practices within the blockchain industry without stifling innovation. Instead, the research-driven approach facilitates informed decision-making for regulators, investors, and other stakeholders, ensuring the enduring success and environmental responsibility of the rapidly evolving blockchain ecosystem.
The BSV Association is pro-regulation
Proof-of-work blockchains as they were originally designed, and as promoted by the BSV Association, aim to achieve scalability while ensuring security and interoperability within an energy-efficient system.
Enabling scalability in proof-of-work by increasing the number of transactions processed per block per second inherently leads to a notable reduction in energy consumption. As more transactions can be accommodated within each block, the energy expended per transaction naturally decreases, resulting in a more energy-efficient system overall.
The BSV Association is pro-regulation and believes that the global adoption of blockchain technology requires enterprises and lawmakers to become comfortable with legal compliance by industry participants.
To ensure the development of a regulatory environment that both fosters lawful conduct and facilitates innovation, the Association regularly engages with leading policymakers to advise on the development of positive policy.
We believe that regulation provides clarity on legal obligations, encouraging compliance, good governance, and accountability. It also fosters innovation and market development by providing a clear legal framework, building trust, and attracting investment.
Read the white paper now
To further encourage discussion around this important issue, the BSV Association has made Daugherty and Ward’s white paper available as a free ebook. Specifically, we aim to elicit a conversation and responses to the formula that offers a solution to non-environmental friendly cryptos and blockchains.
You can find a full copy of the ebook available for download here.