The growing prevalence of blockchain technologies has sparked heightened concerns about their energy usage and the resultant environmental repercussions. As the world grapples with the persistent spectre of climate change, it has become imperative to devise efficient and sustainable solutions across all industries, including the blockchain sector.
A significant hurdle lies in accurately gauging the energy consumption and environmental footprint of these networks to ensure that we can make enlightened choices and endorse best practices.
This was the focus of a presentation at the recent London Blockchain Conference presented by Tokenovate CEO Richard Baker and SmartLedger Chief Development Officer Greg Ward. The duo presented the Web3Co2 Energy Index, which aims to rebalance the view of how to measure energy consumption on the blockchain.
Why transaction volumes are a key business metric
The duo explained that when it comes to measuring throughput, transactions are the ultimate measure of performance. While blocks may be mined with varying densities and storage sizes, transactions are the key to understanding a protocol’s throughput capacity and its energy consumption.
Transaction throughput is an important concept in the world of software engineering and computer science. It is a measure of how quickly a system or network can process a given number of transactions. The model is used to identify bottlenecks or areas where performance can be improved. It also provides insight into the scalability of a system and its ability to handle large amounts of data.
Transaction throughput models are based on the number of transactions that can be completed in a given period. This metric is often used to compare the performance of different systems. It is also used to monitor system performance over time and to detect performance issues.
The transaction throughput model can be used to identify areas of the system that are not efficiently processing transactions. This can help identify and resolve bottlenecks that are slowing down the system. It can also be used to determine the maximum number of transactions that can be handled by a system. This can help to ensure that the system can handle the expected workload.
Transaction throughput models can also be used to evaluate the scalability of a system. This can help to identify potential issues that may arise when a system is scaled up or down. This can help to ensure that the system can handle the expected workload, even when the number of transactions increases or decreases.
Overall, the transaction throughput model is an important tool for assessing the performance of a system or network. It can help to identify areas of the system that are not efficiently processing transactions, and can also be used to measure the scalability of a system.
New white paper offers more insight
A new white paper, A Comprehensive Approach to Blockchain Energy Efficiency: Evaluating and Enhancing Transactional Throughput and Mining Efficiency, authored by Bryan Daugherty (Global Public Policy Director at BSV Association) and Gregory Ward (Chief Development Officer at SmartLedger), introduces a groundbreaking suite of equations specifically designed for the assessment of energy consumption, transactional throughput, and mining efficiency in blockchain networks.
By amalgamating these metrics into an Adjusted Energy Consumption Rating, the authors provide an exhaustive and precise evaluation of a network’s operational efficiency and ecological impact.
Daugherty underscores their mission, stating, ‘Our primary goal is to bolster the advancement of state-of-the-art blockchain technologies while conscientiously addressing environmental concerns and highlighting the pivotal role of transactional throughput. In doing so, we are dedicated to upholding the security inherent in Proof of Work without compromising sustainability or promoting a misleading notion of eco-friendliness.’
‘To attain this equilibrium,’ Daugherty elucidates, ‘we propose the establishment of an energy efficiency reporting and rating system for transaction processors, modelled on the emission standards of the Environmental Protection Agency (EPA). Furthermore, we outline future milestones aimed at transitioning to 100% renewable energy sources.’
Daugherty notes that this framework not only promotes sustainable practices within the blockchain industry but also fosters an environment conducive to innovation. Their research-driven approach empowers informed decision-making for regulators, investors, and other stakeholders, thus ensuring the sustained success and environmental responsibility of the ever-evolving blockchain ecosystem.