The crypto industry of today is dedicated to several goals, including mass adoption, the development of Web3, but also the reduction of carbon emissions to the absolute minimum. Many chains, such as Avalanche, have developed their technologies in a way that will make their carbon footprint as small as possible. However, according to a recent study conducted by the Crypto Carbon Ratings Institute (CCRI), the chain whose carbon emissions are the lowest is actually Polkadot.
Polkadot uses a proof-of-stake protocol which does not require energy-intensive mining, unlike many other NFT platforms. In addition, Polkadot has the smallest carbon footprint among proof-of-stake blockchains according to @bloomberg. https://t.co/T4ZldzO5g7.
— Polkadot (@Polkadot) July 21, 2022
Polkadot is the greenest of them all
Energy usage in the blockchain industry has been a matter of discussion and debate for years now, even more so since 2021, after Elon Musk announced in May that Tesla will stop accepting Bitcoin payments due to the project’s massive carbon footprint. Ever since then, the focus on making crypto as green as possible has been one of the industry’s priorities.
Now, the CCRI report written by Lena Klaaßen, Ulrich Gallersdörfer, and Christian Stoll revealed that Polkadot’s is the most eco-friendly chain. The report revealed details about other chains, as well, such as the fact that Cardano uses the lowest energy per node per year. Meanwhile, Solana requires the lowest amount of electricity per transaction.
The report also detailed how much power different blockchains require, as well as the economic value secured in each platform’s financial apps. The so-called total value locked is $18,454 per kilowatt hour for Avalanche. Meanwhile, Solana’s TVL is $4,395. However, both pale in comparison to Polkadot, where the TVL is only $19.18.
The answer, of course, lies in their choice of a consensus algorithm. Bitcoin, for example, is slow and overly wasteful when it comes to energy as it uses PoW, which requires large quantities of computing power and electricity to solve complex mathematical equations. These mining puzzles require too much power. On the other hand, PoS-based systems require validators to lock their funds for a certain period of time and propose or vote on new blocks. At this point, pretty much every PoS-based network consumes only 0.001% of what Bitcoin’s network requires.
Energy concerns are growing
Musk and Tesla are not the only ones who voiced these concerns, either. They have been pointed out by crypto skeptics for years, and now, countless researchers, experts, and even the Bank of America itself, have pointed out Bitcoin’s excessive power requirements.
The CCRI report itself added that the PoS networks use little enough energy that other factors should be given more attention during their evaluation. The CCRI researchers named some of them, including decentralization, network throughput, functionalities such as smart contracts, and alike, should increase in relevance as decision criteria.
For the time being, it is unclear whether or not something can be done about Bitcoin’s massive power requirements. Elon Musk himself stated last year that Tesla would be willing to reconsider returning support for the coin provided that the developers address these concerns. However, as of right now, PoS chains have a clear advantage over BTC in a world that is naturally attracted by the idea of the crypto industry going green.
To learn more visit our Investing in Polkadot guide.