On June 10, blockchain technology company EMURGO explained how the Proof-of-Stake (Pos) consensus used by Cardano ($ADA) provides a “more energy-efficient alternative for users and enterprises” than the Proof-of-Work (PoW) consensus used most notably by Bitcoin.

In its blog post, EMURGO, which has developed Yoroi wallet for Cardano, started by pointing out how energy-hungry Bitcoin’s PoW algorithm is:

As the Bitcoin price climbs, more people enter the mining race to profit from it. Now, as the number of miners rises, the network needs a way to balance the influx and make sure conditions remain stable. To do it, Bitcoin’s PoW algorithm has something called the mining difficulty. As it becomes more difficult, miners have to complete more difficult calculations to get their Bitcoin rewards…

These harder calculations demand more powerful hardware and a greater quantity of it to complete. In turn, more demanding machinery uses a lot more electricity. As we can see from the chart above, Bitcoin’s difficulty has kept climbing steadily over the years. Even more electric power will have to be used in the future to keep the Bitcoin network secure. Nowadays, Bitcoin uses approximately 121 Terawatt hours of electricity.

It then went on to list the main two advantages of PoS consensus over PoW consensus:

  • The hardware requirements to become a validator in PoS are far cheaper than becoming a miner in PoW.
  • The modest hardware requirements in PoS consume 1,900 kWh annually. A far cry from the demanding electric consumption required by PoW mining farms.

EMURGO argues that PoS, as used by Cardano, is “more sustainable because the hardware investment is much lower, and the electricity consumption is considerably lower than PoW,” noting that “a full PoS blockchain can be completely secured using 1/10 or even less of the electric power a PoW equivalent.”


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