Crypto Industry Makes a Shift from PoW Model to Solve Environmental Issues
Cryptocurrency players have been criticised for their excessive energy requirements for token mining. Even though crypto trading is paperless, the mining process requires a lot of energy and technology to run complex algorithms to authenticate each transaction.
In the first generation of cryptocurrencies, the 'proof of work' or PoW model requires separate parties to validate the records and transactions maintained on a blockchain.
If cryptocurrency prices and consumer acceptance continue to rise, the amount of energy required for cryptocurrency mining will also rise.
According to market participants, it is high time the world shifted to a better model and replaced the 'profit at all costs' model with something better, such as 'benefit to all'.
It has been frequently said, and it is becoming abundantly evident, that we will not be able to escape the current environmental problem by just ignoring it, according to Pratik Gauri, Co-founder and CEO of 5ire.
He said, "For the past 15 years, we have worked to test and implement the idea of a 'For benefit' economy, and it is heartening to know that it has been recognised for its value and universal application."
The market for sustainable or "green" cryptocurrencies has exploded in recent years in an attempt to move towards a cleaner future. These tokens have a reduced carbon footprint, requiring less energy to complete the transaction.
The world's investing practices are gradually shifting from gold to stock trading to cryptocurrencies, according to Vijay Pravin Maharajan, CEO and Founder of bitsCrunch.
"The new tokens use a technique known as 'proof of stake,' which ensures faith in a more traditional currency, that is, money. This consensus approach reduces the number of computing resources needed to verify transactions," he added.
Proof-of-stake (PoS) is a non-computing-intensive alternative to cryptocurrency mining for authenticating cryptocurrency transactions and minting new coins.
Cryptocurrencies, particularly the oldest ones like Bitcoin and Ethereum, are sometimes accused of having an excessive carbon footprint. However, the industry is only 13 years old and has recognised the environmental crisis early on.
Other crypto projects, such as Solarcoin, Powerledger, and Cardano, have already started employing energy-efficient consensus methods, according to Sumit Ghosh, CEO and Co-Founder of Chingari, powered by GARI.
He said, "Amidst all these concerns, crypto projects have identified the environmental challenges at a very early stage of the journey. Crypto projects have identified the issue quickly enough, and will address it soon."
Source: Economic Times