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Analysts of the Crypto Carbon Ratings Institute found that the DPoS algorithm of the Tron blockchain requires several times less electricity than mining crypto assets on the PoW consensus.
CCRI commissioned by the Tron Foundation conducted a study and published a report on August 24 in which it claims that Tron’s low energy consumption requirements make it one of the most environmentally friendly blockchains in the cryptocurrency market. Tron’s delegated proof-of-stake (DPoS) consensus mechanism is helping to reduce its carbon footprint, analysts say , especially when compared to other cryptocurrencies such as Bitcoin with its PoW mechanism.
The DPoS algorithm provides that users verify transactions and maintain the network by placing their own TRX tokens on blockchain nodes. The report states that the energy consumption of blockchains on PoW, such as Bitcoin and Ethereum, is more than 83 million kWh and 22 million kWh, respectively. Although Ethereum plans to switch to a proof-of-ownership (PoS) consensus mechanism and abandon mining with its proof of ownership.
“Tron’s annual energy consumption was 162,868 kWh for more than 2.31 billion transactions. This is about 99.9% less than the power currently consumed by Bitcoin and Ethereum, “the report says.
According to the CCRI, Tron’s energy consumption is “equal to the energy consumption of 15 average U.S. households.” A key reason for consuming a large amount of blockchain energy on PoW is the verification requirements. To test PoW networks, users need a computer or hardware device capable of solving complex algorithmic problems, such as the SHA-256 hash function for Bitcoin and Keccak-256 for Ethereum.
Meanwhile, CCRI says, although PoS networks consume less power, when evaluating the effectiveness of such networks, more attention should be paid to other factors:
“For practitioners choosing the PoS blockchain protocol, there are other crucial factors, such as decentralization, network bandwidth, and functionality (e.g., smart contracts), which should play a vital role as decision criteria.”
In February, Polkadot was named by CCRI experts as the most environmentally friendly blockchain based on the Proof-of-Stake algorithm.
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