Crypto Goes Green, environmentally friendly nano network explained
Key insights:
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Around 15.5 million nanotransactions use the same energy as a single bitcoin transaction.
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Nano blockchain networks use open representative voting as a consensus mechanism, a variant of Delegated Proof of Stake.
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Nano launches its asset settlement network, designed specifically for CBDCs.
A recent report published by Allied Market Research noted that the global size of the crypto market is estimated to reach $ 4.94 billion by 2030. The report said that it would be a critical year for crypto and also for planet earth.
By 2030, the planet needs a global carbon transition with zero carbon, which is a challenge to achieve with global warming levels above 1.5 ° C, according to the IPCC’s climate change report. However, reducing the use of fossil fuels, improved energy efficiency and the use of alternative renewable fuels could possibly change this.
There has been extensive reporting of its high energy consumption when it comes to cryptocurrencies such as bitcoin (BTC). But this technology has the potential to decarbonize unreliable power grids and be a driving force to achieve climate goals faster.
As previously reported by FXEmpire, the energy consumption of proof-of-work (PoW) -based cryptocurrencies such as bitcoin remains high compared to the proof-of-stake (PoS) consensus mechanism. The report also emphasized how central banks’ digital currencies (CBDCs) can meet sustainability.
For example, the Nano network, an emotionless sustainable digital currency, uses the same energy production as a single wind turbine.
FXEmpire spoke with George Coxon, Director of the Nano Foundation, about how Nano prioritizes energy efficiency.
Why is sustainability and efficiency integrated into Nano, and what are the environmental goals?
I personally think we should all be concerned about the environment, social and corporate governance (ESG) and make appropriate decisions, either at the individual or business level, to deal with the climate crisis we are currently in.
Our goal with Nano is to provide the world with a global, decentralized digital currency that empowers the most marginalized without fees while remaining environmentally friendly. In the 6 years since its launch, over $ 42 billion has been processed through Nano without a single fee.
The argument about the energy use of bitcoin in the cryptocurrency area is not about who is right or wrong; it’s basically about progress. If there is a better solution, use it – this has always been the case with technological advances through the ages. Arguments about the energy consumed for the bitcoin network revolve around statements such as “it uses renewable energy, so it’s okay” or “It’s okay because the energy used is already created” – this is the creation of a positive feedback loop of support and errors .
The defense statements may not actually be incorrect; it really does not matter. My point is that if there is a technology that has burst onto the scene, whether cryptocurrency or not – that does not look towards a sustainable energy future for the world, then more innovation is needed to do so.
Nano has an energy footprint for a transaction of 0.00012 kWh (and is being further reduced with a new consensus algorithm that is being tested). At the same time, the entire nano-network uses the same energy as a single wind turbine – to put this in perspective, ie 15.5 million nanotransactions that use the same energy as a single bitcoin transaction.
Can you explain the low energy consensus mechanism that the Nano network uses?
The Open Representative Voting (ORV) consensus mechanism extends other designs by providing security with extreme efficiency using delegated, weight-based voting and minimal resource use.
These improvements result in low costs for handling transactions in volume and thus eliminate the need to stimulate participation with rewards in the chain. No rewards in the chain correspond to no transaction fees. On the other hand, participants in the nano-network are driven by external incentives, such as helping to maintain an immediate payment network that they can use for free.
This combination of design decisions – providing easy consensus and removing incentives in the chain – avoids other networks’ competitive, energy-intensive activities. The end result is a fast and energy efficient nano network. Unlike both PoW and PoS centralization over time, Nano does not.
Colin LeMahieu, Nano’s founder, has spent the last two years writing a new distributed consensus algorithm that is completely generic, suitable for all applications, written as a pluggable reusable software library (instead of a SaaS platform), and designed for scalability in large, open networks. We look forward to implementing it. It is currently under testing, and this will reduce the network’s energy footprint even further.
How can central banks’ digital currencies (CBDCs) be environmentally friendly, and what can be the benefits of designing a low-energy CBDC?
It depends on the underlying technology that central authorities choose to exploit, which is known to be in the air.
We happen to be launching our own asset settlement network, designed specifically for CBDCs (and more). This not only provides the opportunity for network isolation to geographical areas, but also commodity and currency interoperability with a focus on the end user. At the same time, we use incredibly low energy, as Nano’s technology is the backbone of the network.
As said before, all new technology, whether financial or not, must be environmentally friendly to have a place in the global future.
This article was originally posted on FX Empire
