To optimize energy consumption

Several options are being considered to address this worrying environmental challenge.

In 2012 the ‘Proof-of-Stake’ (PoS) Consensus mechanism was created as PoW. With the new mechanism Computing power is no longer a determining factor Validate transactions. While in PoW all compute nodes are doing their best to solve the math operations required to mine cryptocurrencies, in PoS Validator nodes are randomly selected and prioritized those that meet a range of requirements. This method relieves the amount of energy required to generate new cryptocurrencies.

“’Blockchain’ is an emerging technology that becomes more efficient with increasing development. We have examples such as the migration from PoW to PoS or the emergence of private ‘blockchains’ with efficient consensus mechanisms ”, explained Francisco Maroto, Head of Blockchain Discipline at BBVA.

Ethereum is a platform developed in open source code that uses blockchain technology and has the ability to create and execute so-called “smart contracts” that enable secure and efficient transactions without intermediation.

More and more cryptocurrencies are choosing to operate PoS. For example the ether Network, the infrastructure that supports not only “Ether” – the world’s second largest virtual currency by market value after “Bitcoin” – but also many other “Blockchain” -based digital projects, has committed to Ethereum in the coming months 2.0, a new version of its ‘blockchain’ that uses the PoS consensus and thus reduce its energy consumption by 99 percent.

By its very nature, “Bitcoin” is unlikely to transition to PoS in the same way as Ethereum. However, the announcement by the Chinese authorities could signal a step in the right direction: mining operations in this country could begin looking for new locations to resume operations. Regions in which their mining activities are based on renewable sources and they have less of an impact on climate change. “Many actors in the ecosystem are increasingly concerned about the sustainability of their activities and prefer renewable energy sources,” said Maroto.

In fact, North American miners have made a commitment to Elon Musk for development more sustainable solutions for their work.

Sustainability and “Blockchain”

“Blockchain” technology has enormous potential for use in sustainability-related projects. “At BBVA we are exploring the possibility of contributing to a number of energy and sustainability-related initiatives that use blockchain, such as carbon footprint platforms,” ​​says Francisco Maroto.

BBVA recently issued the first structured green bond using “blockchain” technology to negotiate its terms, simplifying processes and speeding up negotiation times. The proceeds will be used to finance green projects under the BBVA bond framework for sustainable development goals (SDGs).

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