Harvard Business Review: Solar power and PoS could make cryptocurrency mining more sustainable

According to BTCManager on November 29, large amounts of energy consumption are a drawback of blockchain technology. However, a report recently published by Harvard Business Review revealed that some alternative mining energy sources with low or even zero energy consumption can pave the way for distributed ledger technology (DLT) to become a global disruptor.

Making cryptocurrency mining more environmentally friendly

The potential of blockchain technology has been recognized by private entities and governments around the world. While there are indeed some people who criticize the technology, the vast majority cannot deny the malleability of blockchain, and blockchain technology has become an ideal choice for some industries.

However, one of the pain points of blockchain technology is that it consumes a lot of energy. A recent report pointed out that Bitcoin mining alone could increase global temperatures by more than 2 degrees.

Furthermore, another report states that distributed ledger technology used more electricity in 2017 than the entire year’s electricity consumption of 159 countries, including Nigeria, Ireland, and Uruguay. This serious problem, in turn, could also pose a huge threat to the Paris Agreement on Climate Change.

Thankfully, the environmental concerns raised by Bitcoin mining can be addressed as long as cryptocurrency mining companies take steps to cut rising energy costs.

Solar Mining

A better option to address the climate threat posed by cryptocurrency mining is to use renewable, eco-friendly energy. A report published by Harvard Business Review suggests that solar energy could be a sustainable option for cryptocurrency mining activities.

The looming threat posed by cryptocurrency mining could be mitigated to a large extent if there were enough incentives for miners to adopt solar power. For example, Iceland-based Genesis Mining mines Bitcoin and Ethereum in the cloud using 100% renewable energy.

Furthermore, if necessary, the relevant governments can also impose fines on entities that do not switch to eco-friendly mining in the short term.

Switching from PoW to PoS

Satoshi Nakamoto used the proof-of-work protocol in Bitcoin: a number of computers compete to solve a series of complex mathematical problems, ultimately generating a "proof" that verifies blockchain transactions. In return, the winning system will be rewarded with Bitcoin.

However, as concerns rise about the economic and ecological sustainability of cryptocurrency mining, many new blockchains have turned to more environmentally friendly proof-of-stake systems that eliminate the element of competition between validation systems.

One huge advantage of the PoS system is its energy efficiency, as it allows each participating machine, or “validator,” to work on one problem at a time, rather than having a large number of miners competing to solve a single computational puzzle as in PoW.

The proof-of-stake system thus does away with the use of expensive, energy-intensive mining machines, which have been criticized in recent years.