On Campus: University of Waterloo Analyzes A More Sustainable Blockchain
Earth Day 2020 came with renewed appreciation for the delicate balance between humans and the world we inhabit. We have only to look at the startling heat maps tracking pollution over major cities before and during the COVID-19 outbreak to witness our irrefutable impact to the planet.
The roles that blockchain and cryptocurrency play are equally undeniable. In fact, University of Waterloo Electrical and Computer Engineering Professor Anwar Hasan says that Bitcoin has an energy footprint equivalent to a country the size of Austria.
This is because of the enormous energy burden required by Bitcoin’s Proof-of-Work algorithms. It’s clear that a more sustainable scheme for blockchain and cryptocurrency holds significant advantages for the planet.
Proof of Work
Originally designed in 1993 to prevent denial of service attacks, Proof-of-Work is used by Bitcoin to validate transactions within its blockchain. This is achieved when miners compete against one another to solve complex computational puzzles.
As these puzzles have grown more complex over time, the computational power and energy required to solve them has increased exponentially. The result is a burdensome drain on energy sources.
It also has catastrophic effects on the environment. Research shows that Bitcoin mining is responsible for producing roughly 22 megatons of carbon dioxide every year, a carbon footprint equal to the entire city of Las Vegas.
Energy Savings with Ripple
In partnership with Ripple’s University Blockchain Research Initiative (UBRI), Professor Hasan and Research Associate Crystal Roma are analyzing blockchain to identify ways cryptocurrency can be made more environmentally sustainable.
As part of this research, the team has published a paper quantifying the cost of running an XRP validator node at roughly $62.84 USD per year based on average wall energy. This stands in stark contrast to a 2018 report that found the price of mining just a single bitcoin could range from $531 to $26,170, depending on the cost of electricity in a given country.
“Energy consumption is a big issue for blockchain, and it’s important that we identify better alternatives that can replace Proof-of-work algorithms,” said Professor Hasan.
It’s his hope that this research will help others understand the low-cost advantages of running an XRP validator compared to Bitcoin Proof-of-Work, and that it will encourage more participation in the Ripple network by businesses.
UBRI and University of Waterloo
Beyond this work on improvements to blockchain sustainability, Professor Hasan has used UBRI to enable key research activity through conferences and new fellowship opportunities. He also plans to leverage funds for more training and research to address other blockchain challenges, including transparency in medical insurance to prevent fraud as well as scalability and privacy efforts that can protect blockchain against the potential of future quantum computer-powered attacks.
To learn more about UBRI, please visit our UBRI website and look for monthly Insights posts in the On Campus series.