In the era of digitalisation, the focus has sharpened on the environmental consequences of rising carbon dioxide (CO2) emissions associated with Bitcoin transactions. This issue has gained prominence due to a global community increasingly committed to sustainability and carbon neutrality.
This issue is unpacked in more detail in the new eBook – The next era in miner economics: Embracing coopetition and infrastructure. The ebook was written by Bryan Daugherty (Global Public Policy Director at BSV Blockchain Association) Gregory Ward (Chief Development Officer at SmartLedger), and Kurt Wuckert Jr (Chief Bitcoin Historian at Coingeek).
The proof-of-Work (PoW) consensus algorithm
Concerns around power and usage primarily centre around Bitcoin’s energy-intensive proof-of-work (PoW) consensus algorithm. PoW requires miners to dedicate substantial computational power to validate transactions through complex mathematical problems, resulting in high energy consumption.
BSV presents an appealing solution to this environmental challenge by advocating for unrestricted block sizes. By accommodating a significantly larger number of transactions per block compared to traditional Bitcoin networks, BSV fundamentally transforms the dynamics of Bitcoin mining.
This shift leads to substantially improved operational efficiency, subsequently reducing energy consumption per transaction. The ripple effect is not limited to easing computational demands but also entails a substantial decrease in CO2 emissions associated with the mining process.
Download the eBook – The next era in miner economics:
Embracing coopetition and infrastructure
A case for larger block sizes
Moreover, the increased block size in BSV isn’t a one-dimensional solution; it adeptly addresses multiple concerns concurrently. It navigates the intersection of environmental sustainability and enhanced transaction capacity and scalability, offering a two-fold advantage – bolstering environmental efficiency while fostering improved scalability in the ever-evolving digital currency landscape.
BSV’s integration of larger block sizes positions itself as a prudent and forward-thinking response to some of the most pressing challenges facing the PoW mining industry today. With these innovative measures, BSV sets the stage for a greener, more sustainable future in blockchain technology, demonstrating that technological progress can coexist with our planet’s well-being.
A misconception around proof-of-work
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.
Notably, proof-of-stake networks such as those promoted by Ethereum cannot accurately be classified as blockchains. Instead, they are distributed ledger networks that imitate the structure and processes of genuine blockchains while lacking security and scalability.
By comparison, the BSV blockchain is a public permissionless blockchain that adheres to the original Bitcoin protocol rules, which utilises proof-of-work consensus.
As such, it presents a viable alternative to Bitcoin Core (BTC), as well as to other proof-of-stake blockchain protocols, and should be considered as a benchmark for proof-of-work-based blockchains, instead of another energy-consuming proof-of-work-based Bitcoin implementations (e.g. BTC).