With cryptocurrency becoming more popular, energy use of Proof-of-Work (PoW), blockchains that are the biggest has been under scrutiny. Many of the most powerful people around the globe have expressed concern about the impact PoW has on the environment. In fact, entire countries have decided to ban cryptocurrency mining. So, what’s the alternative for a sustainable blockchain business? Can a PoS-based, energy-efficient blockchain be made? Let’s take a closer look.

What Proof of Work (PoW), Does

Blockchain technology requires a consensus mechanism to ensure that all nodes agree on how accurate each transaction is before additional blocks can be added to the chain. This consensus mechanism is called Proof of Work (PoW) on the Bitcoin network. PoW is based on a energy-intensive process called mining, in which participants (known collectively as miners), solve complex mathematical equations using vast amounts of computation power.

PoW-based crypto-blockchains consume so much energy, the Bitcoin blockchain has an annual carbon footprint similar to that of medium-sized countries. One Bitcoin transaction can consume as much energy as an American family for a period of 74 days. As an entire ecosystem of more than 13,000 cryptocurrencies emerges, it’s clear that PoW is no longer an option moving forward.

PoW and its Environmental Impact

Two-thirds (or more) of Bitcoin mining took place in China, where there was abundant cheap energy and favorable climate conditions. However, Chinese authorities banned all crypto mining in China, citing concerns about the environment. As crypto miners began to flee to friendlier jurisdictions, the impact of mining’s energy usage became even more apparent.

The power grid in Kazakhstan was soon feeling the pinch after a massive exodus from China’s miners fled. There were widespread power outages throughout the country, leading to unrest. The Kazakh government declared that they would cut off power to crypto miners in October 2021. The US is home to over a third of crypto mining. Congress began investigating the energy requirements of crypto mining. In December 2021, Senator Elizabeth Warren expressed her deep concern over its environmental costs, sparking repeated rounds of congressional inquiries and a Committee Hearing on “Cleaning up Cryptocurrency”. Last month, the EU rejected a ban on PoW cryptomining.

ESG investors are also restricted from investing in PoW-based Blockchains due to their high carbon footprint. Even previously, pro-Bitcoin advocates, like Tesla’s Elon Musk, had been vocally critical of the “rapidly increasing use of fossil fuels for Bitcoin mining and transactions”.

Scalability issues and sky-high fees

Many popular blockchains like Ethereum are not only limited by the high energy consumption of PoW-based Blockchains but also have issues with scalability and transaction times that can take a long time. Many Ethereum-based blockchain companies were forced to cease operations last year after the average transaction fee hit almost $70. UniLogin is one example of such a project. UniLogin posted a blog announcement that it would be closing down. The opening sentence simply stated, “Unilogin is out of gas”.

Decentralized finance is another example of traders becoming frustrated. They are priced out by popular platforms such as. This makes DeFi the perfect playground for whales. The Ethereum network is under strain from thousands upon thousands of decentralized apps (dApps), competing for the same throughput at a single base layer. So, what’s the solution?

PoW-based Blockchain apps must look for a better alternative. It should scale to mass adoption and be able to accommodate an adequate number of users. Blockchains, like Cellframe Network, adopt a different consensus method, Proof of Stake (PoS), that allows enterprises and developers to build dApps and blockchains that do exactly that — while using a fraction of the energy.

Proof of Stake (PoS).

In PoS, rather than miners lending computational power to the network, validators verify transactions based on the amount of the network cryptocurrency they own (their ‘stake’). As their network stake, validators can only validate the same amount of transactions. A validator can validate just 4% of blocks if they have 4% stake in crypto assets. They are thus able to preserve decentralization of the network and remove the need for complex calculations that require large amounts of energy. PoS requires no mining equipment.

Recent estimates suggest that Ethereum’s planned migration from PoW (to PoS) could reduce energy usage by 99.95%. This would mean PoS is approximately 2000x more efficient than PoW. PoS-based Blockchains are a good choice for blockchain companies that want sustainability and growth. However, energy output and speed are only a couple of factors to consider.

The Threat of Quantum Computers (NASDAQ:

The threat of quantum computers is a grave one that most current blockchains don’t consider. Quantum computers will one day be able crack public-key cryptography. This could potentially endanger every byte known to man. This attack will not be stopped by most blockchains. This highlights the need for PoS-based quantum-proof blockchains that are energy efficient — and secure against any attack by a quantum computer of any size.

Next-generation blockchains like Cellframe Network use quantum-resistant cryptography to ensure no algorithm is able to penetrate their network and the apps built on it. This makes them scalable, open-source platforms that are protected by post-quantum encryption. Blockchain companies can protect their brand’s future while leveraging fast, scaleable, and energy-efficient technology as their core.

Final Thoughts

PoW’s obvious flaws led to the development of energy-efficient PoS-based Blockchains that are more suitable for developers and enterprises. However, most PoS chains are not quantum-resistant and can’t offer long-term security against the threat of quantum computers. If blockchain companies want to be sustainable and last a long time, then they need a blockchain that can remain current in the future.

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