2017 has been a record-breaking, awe-inspiring rollercoaster ride for cryptocurrency valuations increasing by more than 2000% in some cases.
With all the hype and global attention on Bitcoin and other cryptocurrencies, ICOs (Initial Coin Offerings) were attempting to tokenize just about everything in 2017. However, in this culture of tokenization, what everybody has failed to observe is that with price spikes in crypto valuations comes energy spikes in transactions processing. Consider the following:
- In September 30, 2017, 1 Bitcoin transaction could power 7.5 homes in the US for a day;
- By of December 31, 2017, 1 Bitcoin transaction could power 10.5 homes in the US for a day.
This trend should cause severe alarm and provide us all with reason for concern. Furthermore, with a tidal wave of ICOs forthcoming this year, all intending to take advantage of the hype and frenzy that is frothing within the crypto community, the consumption of electricity to process all these transactions is only expected to rise exponentially.
A Proof-of-Work (POW) system (or protocol, or function) is an economic measure to deter denial of service attacks and other service abuses such as spam on a network by requiring some work from the service requester, usually meaning processing time by a computer.
On the contrary, Proof of Stake (PoS) concept states that a person can mine or validate block transactions according to how many coins he or she holds. This means that the more Bitcoin or altcoin owned by a miner, the more mining power he or she has.
While we all look forward to proof of stake to evolve, nevertheless, the most sought after, pioneer proven currency remains Bitcoin, which continues to operate on a proof of work methodology. This is why the network is voraciously consuming electricity for the foreseeable future.
This situation is extremely reminiscent of the heated debate experienced between our dependence on fossil fuel consumption versus our shift to renewable energy consumption as a civilization. This debate has been ongoing for over two decades now, and our dependence on fossil fuels is anticipated to continue for the foreseeable future similar to our dependence on proof of work.
In lieu of this culminating impending crisis, one company has taken measures to solve this head on. 4NEW Limited, a UK based Waste to Energy treatment plant, launched its pre-sale in the fall of 2017. 4NEW successfully raised USD $30.5MM from US private equity funds in a conventional round of funding, achieving their soft cap requirement. Now with the funding for the plant secured, 4NEW has allocated all its electricity output into its coin, namely KWATT. The plant has a capacity of generating 300 million kilowatts per annum. With a total coin supply of 300 million, each KWATT Coin will be backed by 1 kilowatt of electricity.
This electricity will be applied towards the mining of bitcoins and other cryptocurrencies. So while blockchain network protocols take time to evolve into a more energy efficient network, we can have a sustainable mechanism via which cryptocurrencies can transact in an environmentally responsible fashion with zero impact to the climate as is the case with dependence on fossil fuel generated electricity.
Furthermore, for the first time, we have a utility company solely dedicated to providing energy to blockchain networks; With the people holding the power to allocate this energy in their desired location via a voting structure only available to the KWATT coin holders. Needless to say, 4NEW has successfully tokenized electricity, the most sought-after commodity for our civilization with applications not just within the crypto community but also mainstream utilization.
Video Link: https://www.youtube.com/watch?v=UjqcsBQkAwE
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What do you think about using waste energy, such as that harnessed by 4NEW, to mine Bitcoin and other cryptocurrencies? Will it help reduce Bitcoin’s potential environmental impact? Let us know in the comments below.
Images courtesy of 4NEWShow comments