Why Proof of Work (PoW) is environment unfriendly?

Blockchain is a shared, decentralized, and immutable ledger that stores data securely and tamper-proof. It consists of a network of nodes, called blocks, that work together to maintain a distributed database.

To perform a transaction in a blockchain, miners validate a transaction and add it to the blockchain after validation, this is called mining. In return, they get a reward. The selection of a miner from multiple candidates, giving the reward, and other related operations are managed by consensus algorithms. Various consensus algorithms work in different blockchains. For example, Bitcoin currently uses Proof of Work (PoW), Ethereum uses Proof of Stake (PoS), etc.

Common reasons

Below are the main reasons for considering PoW as environment unfriendly:

• Energy consumption: PoW requires high computing power to solve complex mathematical problems. Miners have to compete with each other to solve these problems, and the one who solves it first gets a reward and adds the next block to the blockchain. A lot of computation and powerful equipment like special mining rigs or application-specific integrated circuits (ASICs) are required for this process. This high energy requirement is a big reason why it harms the environment.
• Heat generation: PoW mining rigs generate a lot of heat during the computational process. Miners often require cooling systems, such as air conditioning or specialized cooling units, to prevent overheating. These cooling systems require additional energy consumption. Also, the heat produced during this process causes global warming.
• Electronic waste: Miners continually upgrade their hardware to keep up with the increasing computational power required as mining becomes more competitive. This leads to a number of outdated mining equipment, resulting in electronic waste. The disposal of these devices can cause environmental risks if not handled properly.
• Energy waste: The computational puzzles in PoW are intentionally designed to be difficult and resource-intensive to solve. However, most of the computational effort used in mining doesn’t serve any useful purpose other than securing the blockchain. This inefficiency means that a lot of energy is used up without any real benefit other than keeping the network secure.

Recent updates

This energy-intensive behavior of Proof of Work (PoW) is one of the reasons for switching the Ethereum blockchain to Proof of Stake (PoS) in 2022, which is another commonly used consensus algorithm.