A Review on Energy consumption in Blockchain
P Gautham Prasad C Niteesha
dept. of Electrical and Electronics Engineering dept. of Electrical and Electronics Engineering
Amrita School of Engineering Amrita School of Engineering
Kerala, India Kerala, India
Yash Katyan V.Raja Chowdary
dept. of Electrical and Electronics Engineering dept. of Electrical and Electronics Engineering
Amrita School of Engineering Amrita School of Engineering
Kerala, India Kerala, India
Saurav Suresh Athira Jayvarma.s
dept. of Electrical and Electronics Engineering dept. of Electrical and Electronics Engineering
Amrita School of Engineering Amrita School of Engineering
Kerala, India Kerala, India
Abstract—Blockchain technology, a revolutionary innovation PoW, where all nodes validate transactions simultaneously.
with applications across various industries, has faced significant This design ensures transparency and security but leads to
scrutiny due to its substantial energy consumption, particularly substantial energy[1].
associated with Proof-of-Work (PoW) consensus mechanisms.
This paper delves into the intricacies of blockchain energy con- Consensus Mechanisms and Environmental Impact Stud-
sumption, examining the factors contributing to its high energy ies compare different consensus mechanisms to address
demand, the environmental implications, and potential solutions blockchain’s environmental footprint. While PoW is secure, its
to mitigate its carbon footprint. We analyze the energy efficiency energy costs are unsustainable. Transitioning to Proof-of-Stake
of different consensus mechanisms, including PoW, Proof-of- (PoS) significantly reduces energy usage, as demonstrated by
Stake (PoS), Delegated Proof-of-Stake (DPoS) and Byzantine
Fault Tolerance (BFT). And discuss emerging technologies that Ethereum’s recent transition, which decreased its energy con-
aim to optimize blockchain’s energy usage. By understanding the sumption by 99.98 percent . Hybrid approaches like Delegated
challenges and exploring innovative approaches, we can harness Proof-of-Stake (DPoS) and Byzantine Fault Tolerance (BFT)
the potential of blockchain while minimizing its environmental provide additional energy-efficient options][2].
impact. Integration with Renewable Energy Blockchain’s integra-
Index Terms—Blockchain, Energy Consumption, Proof-of-
Work, Proof-of-Stake, Consensus Mechanisms, Sustainability, tion with renewable energy sources, such as solar and wind
Environmental Impact power, offers a path toward sustainability. Smart contracts can
optimize energy trading, allowing prosumers to trade surplus
I. I NTRODUCTION power in decentralized networks. This approach supports grid
Blockchain, a decentralized ledger technology, revolu- flexibility while reducing reliance on fossil fuels[3].
tionizes industries like finance and healthcare by ensuring III. UNDERSTANDING BLOCKCHAIN CONSENSUS
transparency and security. However, its reliance on energy- MECHANISMS
intensive mining activities presents significant environmen-
A. Proof-of-Work (PoW):
tal challenges. This paper investigates the factors driving
blockchain’s energy consumption and evaluates solutions to Proof of Work (PoW) is a consensus mechanism that
enhance efficiency and sustainability. Key objectives include involves a competitive process where miners solve complex
exploring green mining practices, analyzing consensus mech- cryptographic puzzles to validate transactions and add new
anisms, and reviewing collaborative efforts for eco-friendly blocks to the blockchain. This process requires significant
blockchain systems. computational power and energy consumption, 1 as miners
compete to solve these puzzles. While PoW provides a high
II. L ITERATURE R EVIEW level of security, its energy-intensive nature has raised con-
Energy Consumption Patterns Blockchain applications, par- cerns about its environmental impact[4].
ticularly those using Proof-of-Work (PoW), are among the To solve these puzzles, miners use specialized hardware like
most energy-intensive technologies. Bitcoin alone consumes ASICs (Application-Specific Integrated Circuits) that consume
more electricity than several small countries, with an an- large amounts of electricity. As the network’s hash rate (total
nual energy demand of approximately 141–160 TWh. This computational power) increases, miners must continuously
is largely due to the computational redundancy required by upgrade their hardware to maintain competitiveness, leading
to a vicious cycle of higher energy consumption. Additionally, and Byzantine Fault Tolerance (BFT). In DPoS, token holders
the network’s difficulty level adjusts to maintain a consistent vote to elect a fixed number of delegates who are respon-
block generation rate, further increasing the computational sible for validating transactions and producing blocks. This
requirements for miners. approach significantly reduces energy consumption by limit-
ing the number of active validators. Additionally, DPoS can
achieve faster block times and higher transaction throughput
compared to traditional PoW and PoS mechanisms. However,
DPoS can be more centralized than PoW or PoS, as a smaller
number of delegates control the network. The voting mech-
anism can also be susceptible to manipulation and attacks,
which can compromise the security of the network. To mitigate
these risks, DPoS networks often employ additional security
measures, such as slashing penalties for malicious behavior
and regular elections to ensure the diversity of delegates.
IV. FACTORS C ONTRIBUTING TO H IGH E NERGY
CONSUMPTION IN BLOCKCHAIN
A. Hash rate
Fig. 1. Rough Comparison of Power Consumption of different Blockchain Explanation: The hash rate refers to the total computational
Architectures [3]
power of the network, measured in hashes per second.
Impact on Energy Consumption: A higher hash rate
B. Proof-of-Stake (PoS): necessitates more powerful mining hardware to compete for
Proof-of-Stake (PoS) is a consensus mechanism that selects block rewards. This increased computational power directly
validators based on the amount of cryptocurrency they hold. translates to higher energy consumption.
This approach reduces the need for extensive computational Why It Matters: As the network’s hash rate grows, miners
power, making it a more energy-efficient alternative to PoW. must continuously upgrade their hard- ware to stay competi-
Instead of competing to solve complex puzzles, validators are tive, leading to an exponential increase in energy consumption.
chosen randomly based on the size of their stake in the net- B. Network Difficulties
work. This process eliminates the need for specialized mining
Explanation: The network difficulty is a measure of how
hardware and significantly reduces energy consumption.
complex the cryptographic puzzles are. It adjusts dynamically
While PoS offers significant energy efficiency benefits (as
to maintain a consistent block generation rate
shown in Fig. 1.), it’s important to note that it may provide
Impact on Energy Consumption: A higher difficulty level
a lower level of security compared to PoW. However, ad-
requires more computational power to solve the puzzles,
vancements in PoS mechanisms, such as those incorporating
resulting in in- creased energy consumption
slashing penalties for malicious behavior, have helped to
Why It Matters: As the network grows and more miners
mitigate these security concerns.
join, the difficulty level adjusts upward to ensure security
C. Byzantine fault Detection(BFT): and stability. This adjustment, in turn, leads to higher energy
consumption.
Byzantine Fault Tolerance (BFT) is a class of algorithms
designed to ensure the reliability and security of distributed C. Efficiency of Mining Hardware
systems, including blockchain networks. These algorithms en- Explanation: The efficiency of mining hardware, such as
able a network of nodes to reach consensus on the state of the ASICs, determines the amount of energy required to perform
blockchain, even in the presence of malicious or faulty nodes. a unit of computation[5].
BFT algorithms are particularly well-suited for permissioned Impact on Energy Consumption:More efficient hardware
blockchains where the number of nodes is relatively small and can reduce the energy consumption per hash, making mining
well-known. By limiting the number of active nodes and em- more sustainable.
ploying sophisticated consensus mechanisms, BFT can achieve Why It Matters: The continuous development of more
high levels of security and fault tolerance while requiring less efficient mining hardware can help mitigate the energy con-
computational power compared to Proof-of-Work (PoW). This sumption of blockchain networks.
makes BFT a more energy-efficient and scalable option for
blockchain networks, particularly those with specific use cases D. Network Size and Transaction volume
and a controlled environment. Explanation: A larger network with a higher transaction
volume increases the computational load on the network.
D. Delegated Proof of Stake (DPoS): Impact on Energy Consumption:As the network grows,
Delegated Proof-of-Stake (DPoS) is a hybrid consensus more nodes need to process and validate transactions, leading
mechanism that combines elements of Proof-of-Stake (PoS) to increased energy consumption.
Why It Matters:The scalability of blockchain networks B. Energy Efficient Hardware:
is crucial to handling increasing transaction volumes without Advanced Chip Design: Developing more efficient mining
compromising energy efficiency[6]. hardware, such as ASICs (Application-Specific Integrated Cir-
cuits), can reduce energy consumption.
Cooling Technologies: Implementing advanced cooling tech-
niques can optimize the energy efficiency of mining opera-
tions.
C. Layer-2 Scaling Solutions:
Off-Chain Scaling: By processing transactions off-chain,
layer-2 solutions can significantly reduce the computational
Fig. 2. Innovations in Mining Technologies load on the main blockchain.
Rollups: These solutions bundle multiple transactions into a
single transaction, reducing fees and energy consumption.
V. A DDRESSING THE E NERGY C ONSUMPTION
Sidechains: Sidechains can handle specific types of transac-
C HALLENGE
tions, relieving the main chain and improving efficiency.
To mitigate the energy consumption of blockchain, various
D. Alternative Consenus Mechanisms:
strategies are being explored:
Proof-of-Stake (PoS): This mechanism selects validators
Energy-Efficient Consensus Mechanisms: Shifting to based on the amount of cryptocurrency they hold, reducing
more energy-efficient consensus mechanisms like Proof- of- the need for energy-intensive mining.
Stake (PoS) can significantly reduce energy consumption. Proof-of-Authority (PoA): This mechanism relies on a pre-
Layer-2 Scaling Solutions: By offloading some of the selected group of validators, often organizations or individuals
computational load to sidechains or layer-2 protocols, the with a strong reputation.Delegated Proof-of-Stake (DPoS):
energy consumption of the main chain can be reduced. This hybrid approach combines elements of PoS and PoA,
Renewable Energy Integration: Utilizing renewable en- where token holders vote for delegates who validate transac-
ergy sources to power mining operations can reduce the carbon tions.
footprint.
Hardware Optimization: Continuously improving mining
hardware efficiency can minimize energy consumption. Net-
work Optimization: Implementing network
optimizations to reduce redundant computations and im-
prove overall efficiency.
VI. E NVIRONMENTAL I MPACT AND S USTAINABILITY
The Energy Consumption Challenge, Blockchain
technology, particularly Proof-of-Work (PoW) consensus
mechanisms, has faced significant criticism due to its
energy-intensive nature (as shown in fig 3). The process
of mining, which involves solving complex computational
Fig. 3. Power Consumption across various hardwares [3]
puzzles to validate transactions and secure the network,
requires substantial computational power and electricity
consumption. This energy consumption has raised concerns E. Blockchain Interoperability and Efficiency:
about its environmental impact, including greenhouse gas Cross-Chain Communication: Enabling seamless
emissions and climate change. To address these concerns, communication and data transfer between different
various strategies are being explored to make blockchain blockchains can reduce redundancy and energy consumption.
more energy-efficient and sustainable[7]: Smart Contract Optimization: Optimizing smart contract
code can improve their execution efficiency and reduce gas
fees.
A. Renewable Energy Integration:
Direct Utilization: Mining operations can be powered While significant progress has been made in improving
directly by renewable energy sources like solar, wind, or the energy efficiency of blockchain, further innovation and
hydroelectric power. technological advancements are necessary to fully address
Energy Purchase Agreements (EPAs): Blockchain compa- the environmental challenges. By embracing sustainable prac-
nies can purchase renewable energy credits (RECs) or sign tices,exploring alternative consensus mechanisms, and opti-
PPAs with renewable energy providers. mizing blockchain protocols, we can harness the potential of
this revolutionary technology while minimizing its impact on
the planet.
VII. CONCLUSION
While blockchain technology offers immense potential, its
energy consumption, particularly in PoW-based systems, re-
mains a significant challenge. By understanding the factors
contributing to high energy consumption and exploring in-
novative solutions, we can harness the power of blockchain
while minimizing its environmental impact. The transition
to more energy-efficient consensus mechanisms, the adoption
of sustainable practices, and the development of innovative
technologies are crucial steps toward
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VIII. I NDIVIDUAL C ONTRIBUTIONS OF E ACH MEMBER :
P.Gautham Prasad: Prepared comparative analysis and
case studies and made presentation.
C.N.S.Niteesha: Researched consensus mechanisms and
energy-efficient models and made presentation.
Yash Katyan:Examined the Sustainability in blockchain tech-
nology and edited the final document.
V. Raja Chowdary: Studied Current trends in bitcoin mining
and efficiency of different hardwares and edited the final
document .
Saurav Suresh:Studied the traditional and blockchain energy
consumption.
