Input Output Global (IOG), the technology firm spearheading the research and development of Cardano, has offered an explanation as to why Cardano is frequently referred to as “the green blockchain.” According to IOG, this moniker is attributed to two primary factors: a significantly reduced energy footprint and a unique staking mechanism, as outlined in a Twitter thread and a blog post by IOG.
Bitcoin, the pioneer of cryptocurrencies, has faced considerable criticism for its environmental impact. According to IOG, Bitcoin’s proof-of-work (PoW) protocol is notorious for its high energy consumption. Current estimates suggest that Bitcoin mining consumes approximately 99.37 terawatt hours (TWh) of electricity annually. This is equivalent to the total energy production of countries like Malaysia or Sweden.
In contrast, Cardano operates on a proof-of-stake (PoS) consensus mechanism, which IOG claims is far less energy-intensive than the PoW protocols used by Bitcoin and other cryptocurrencies. In a PoS system, network participants run nodes, and the blockchain selects a node to add the next block based on the node’s stake and other parameters. IOG explains that this process eliminates the need for block producers to spend excessive amounts of time and computational power to solve random puzzles, a characteristic of PoW mining protocols.
IOG further highlights the energy efficiency of Cardano’s PoS system by noting that a Cardano node can be run on a low-powered processor, such as a Raspberry Pi. This is in contrast to PoW mining protocols, which require powerful, expensive, and energy-intensive hardware to produce blocks. As a result, IOG posits that Cardano and other PoS protocols are being recognized as green alternatives to PoW blockchains.
Moreover, IOG points out that the low power overhead of PoS makes it feasible to run on renewable energy. IOG states that several stake pools are already running on 100% renewable energy, further enhancing Cardano’s sustainability credentials.