University College London, one of the top universities in the United Kingdom, recently published a report on September 8 that compared multiple consensus protocols such as Proof of Work (PoW), Proof of Stake (PoS), and other Distributed Ledger Technologies (DLTs).
The results of the study revealed that Hedera Hashgraph, a DL Technology and a public network, has outperformed other Distributed Ledger Technologies in terms of the lowest energy consumption.
The research paper had compared the energy consumption of second-generation consensus models such as Proof-of-Stake. The six DLTs including Algorand, Cardano, Ethereum 2.0, Hedera Hashgraph, Polkadot, and Tezos, were examined during the study.
Ultimately, the study found that the DLT of the Hedera Hashgraph has the lowest energy output 20.95 mWh/tx, followed by Argoland (4.427W h / tx), Polka Dot (115.6W h / tx), and finally Ethereum 2.0 (2.862W h / tx to 557.5W h / tx).
Dr. Paolo Tasca, Executive Director at UCL CBT, said in a press release:
“… through this research we have found that not all Proof-of-Stake networks are created equally. This is something that both investors and adopters need to be wary of when selecting their network of choice. While it’s fantastic to see that Ethereum 2.0 will be Proof-of-Stake, looking at these results it’s clear that we need to remain vigilant of its potential environmental impact.”
The research was conducted by formalizing a basic consumption model for PoS blockchains which allowed researchers to quantify the energy consumption per transaction based on common input variables. The variable inputs included “the number of validators and the throughput characteristics of the system.”
The study revealed that the energy requirements of various consensus protocols depend on the number of active validators. They also found that DLT networks have a “race to the bottom” where some validators use the cheapest energy sources to run their hardware.
Researchers warned in the report that there is an urgent need for the modernization of PoW systems and a shift towards PoS. They recommended the practitioners use appropriate, energy-saving hardware.
The paper noted:
“Given the enormous challenges posed by climate change, avoiding unnecessary energy consumption needs to be a high priority. Our work shows that PoS-based systems can contribute to this and could even undercut the energy needs of traditional central payment systems, raising hopes that DLT can contribute positively to combatting climate change.”