crypto: Crypto industry moving away from PoW model to address environmental issues

Synopsis

Separate parties verify the records and transactions stored on a blockchain in the first generation of cryptocurrencies, which is known as ‘proof of work’ or the PoW model.If prices and user acceptance of the crypto asset continues to rise, the quantity of energy needed by cryptocurrency mining is likely to rise as well.

Crypto players have been under criticism for high energy requirements for mining of tokens. Although crypto trading is paperless, the process of mining consumes a lot of energy and machinery to perform sophisticated algorithms to authenticate each transactionCrypto players have been under criticism for high energy requirements for mining of tokens. Although crypto trading is paperless, the process of mining consumes a lot of energy and machinery to perform sophisticated algorithms to authenticate each transaction.

Separate parties verify the records and transactions stored on a blockchain in the first generation of cryptocurrencies, which is known as ‘proof of work’ or the PoW model.

If prices and user acceptance of the crypto asset continues to rise, the quantity of energy needed by cryptocurrency mining is likely to rise as well.
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Market players said that it is high time that the world moves towards a better model and replace the ‘profit at all cost’ model with something better like ‘benefit to all’ following the growing use cases, and its veracity.

Pratik Gauri, Co-founder & CEO of 5ire, said it has been repeatedly reiterated, and it is becoming abundantly clear that we will not get out of the current environmental crisis by simply ignoring it.

“For the past 15 years, we have worked to test and implement the idea around a ‘For benefit’ economy, and it is heartening to know that it has been recognized for its value and universal application,” he added.

In an attempt to move towards a cleaner future, the market for sustainable or ‘green’ cryptocurrencies has exploded in recent years. Such tokens have a low carbon footprint, completing the transaction with quite less energy.

Vijay Pravin Maharajan, CEO & Founder, bitsCrunch said that with changing times, the world’s investing techniques are gradually transitioning from gold to stock trading to cryptocurrencies.

“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 amount of computing resources needed to verify transactions,” he added.

The proof-of-stake (PoS) technique of authenticating cryptocurrency transactions and minting new coins is a non-computing-intensive alternative to cryptocurrency mining.

Cryptocurrencies, especially the oldest ones such as Bitcoin and Ethereum, are often accused of leaving too much carbon footprint. But the industry is merely 13 years old and has understood the environment crisis early on.

Sumit Ghosh, CEO & Co-Founder, Chingari, powered by GARI said other crypto projects including Solarcoin, Powerledger and Cardano have already started using consensus algorithms that are energy efficient.

“Amidst all these concerns, crypto projects have identified the environmental challenges at a very early stage of the journey,” he adds. “Crypto projects have identified the issue quick enough, and will address them soon.”

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Updated: 06/05/2022 — 06:00