Green energy & cryptocurrency: Are they compatible?
Can cryptocurrency be environment friendly?
Bitcoin as we know is the most popular cryptocurrency right now. You could also say it is the “daddy” of cryptocurrencies, since it was the very first one. However, Bitcoin is also quite taxing on the environment, especially when we talk about the mining aspect. Saying that it consumes a lot of energy is honestly an understatement. So, is it possible for cryptocurrencies to be environment friendly? Let’s find out with Bholdus, and the BHO token!
Bitcoin mining - rewarding yet perilous
The mining industry for bitcoin is quite rewarding. For every 10 minutes of mining, a miner is rewarded 6.25 bitcoins. Considering its value right now, that’s a lot of money! However, as of right now, the mining industry is consuming more power than the entirety of Argentina, and the amount is still growing. It is estimated that by the end of next year, its energy consumption will be equal to all the solar panels on Earth! And that is despite the fact that miners are usually installing machines where the electric cost is cheap, such as in China.Bitcoin, among some other cryptocurrencies, uses the “Proof of Work” (PoW) mechanic for validation. Basically, Bitcoin uses blockchain technology, and that technology is the defining trait of crypto. Blockchain is like a public ledger, and records are available to every node - or device - on the network, and changes made must be approved by all the nodes. Hence, the validation process is very safe, but also quite power hungry, as powerful computers are needed to solve complex equations in the process. Due to that, even China, the country where the majority of mining happens, have started to close down all the mining facilities, due to said consequences to the environment.
The alternative, and BHO
However, many other altcoins (coins other than Bitcoin) work on alternative or hybrid approaches. Besides the PoW above, there is also the “Proof of Stake” (PoS) system, which requires every participant in the network to cooperate. In a PoW system, all participants compete with each other to solve the puzzle but only winners are allowed to produce a block and receive the reward. While in a PoS network, only predetermined validators need to produce blocks at a time. If Bitcoin employed this PoS mechanic, its energy consumption would reduce 10 thousand times!
Furthermore, there is also an extension to PoS, which Bholdus and BHO employ: Nominated Proof of stake (NPoS). This ensures higher security and higher performance for the network. You can refer to page 17-18 of our Whitepaper, available on Bholdus.com, for more detailed description.
So, in conclusion, it is possible for a cryptocurrency to be environment friendly! We at Bholdus always strive to get the most benefits to our customers, while ensuring the safety of our planet, including the environment. Hopefully you learn something informative. Stay tuned for us in the next bits!
Are Green Energy And Cryptocurrencies Really Compatible? | by JuanSC * | Geek Culture | Jul, 2021 | Medium