The environmental argument is misleading
You may have heard about how Bitcoin spends tons of energy per transaction due to Proof of Work. Many people rally against cryptocurrency in general because of these arguments, which are true (for PoW coins!)
However, one mistake many people make is to associate the entire cryptocurrency space with Bitcoin, believing that all cryptocurrencies are inherently energy-wasters and horrible for the environment.
Let me explain why cryptocurrency isn't the coal-burning, oil-guzzling polluter that it is often portrayed as.
Proof of Work
Once upon a time, there was an incredibly smart person (or group) who went by the pseudonym Satoshi Nakamoto. Satoshi here found a way to solve the double-spend problem using computational work, and released the Bitcoin whitepaper, introducing both blockchain technology and the Bitcoin Core implementation.
It all relies on cryptographic hash functions. I'll break this down.
A hash function is a program that turns text into another “hashed” form, examples include MD5 and CRC32, usually used for checksumming.
Cryptographic hash functions are just hash functions, except they are extremely secure. They are one-way, meaning you cannot get back the input from its output, the best way is just to guess and check. Cryptographic hash functions make up the backbone of all of Internet security, examples including SHA256 and Blake2b.
Miners take transactions sent to them by users of the Bitcoin network, and arrange them into a block. (the block in blockchain!) Now comes the hard part: this miner needs to find a special nonce, that when hashed with the rest of the block, the resulting number starts with a certain amount of zeroes, determined by the difficulty.
There is no better way than guessing and checking, so this miner has to guess and check numbers billions of times, even trillions, just to find this specific special nonce. That is what wastes so much energy and that is what secures the Bitcoin network.
Proof of Stake
Many (and I mean many) blockchains use Proof of Stake or some derivative form of it, such as Avalanche, Cosmos, and Polygon. These chains require validators (not called miners anymore) to stake a certain amount that can be “slashed” for bad behavior.
I'm no expert on PoS, so you should check out the Ethereum Foundation article for more details.
And so...
Bitcoin will probably not fade away, but new, more secure, faster and more efficient chains will overtake it like Avalanche. Ethereum, one of the biggest blockchains, is switching from Proof of Work over to Proof of Stake. Bitcoin will probably never switch. Who knows?
The climate crisis is a big issue, but we shouldn't condemn a new revolutionary technology because a few implementations are bad.
tags are down here to not bother anyone #blockchain #consensus #pos #pow #environment