This Week in Crypto

Crypto things you didn’t know you didn’t know.

Blockchain is Becoming Eco-friendly.

One of the biggest drawbacks for blockchain and cryptocurrency development is the huge amounts of energy it takes, and the resulting release of carbon emissions. Some creative approaches like carbon offsets can provide short-term solutions, but they are really just corrective measures for a very big problem. As a result, some blockchain networks are shifting from a “proof-of-work” (POW) model to a “proof-of-stake” (POS) model. In POW, miners are incentivized to stack up hardware to solve as many hash computations as possible, which demands massive amounts of computational power and energy. 

In proof-of-stake, however, crypto owners can “stake” their coins; then the blockchain protocol selects a validator who adds the new block of transaction to earn the financial reward. In POS, validators don’t need special equipment to solve the equations, thus leading to lower energy usage. While POS has not been proven to be as secure yet, it still offers a fantastic value proposition to be more environmentally friendly.