In a world where we are all aware of our energy consumption and spend huge amounts of money on reducing CO2 emissions, how responsible is it to devalue the equivalent power consumption of a small country to maintain a blockchain? And how is this regulated at Gulden?
Does a blockchain always need the equivalent power consumption of a small country, or is one windmill enough?
A regular blockchain is not very energy efficient. In fact, the POW (proof of work) protocol which miners work with is based on generating as much computing power as possible, and therefore a high energy consumption! On the other hand don’t dismiss the energy use of a fiat currency like a Euro, with all its bank offices that need to be lit and heated, the central computers that manage and control the cash flows, the hundreds of thousands of ATMs that need to be filled and that need to be switched on day and night. Is blockchain then perhaps a missed opportunity to take steps in the right direction? In other words: aren’t we just, by embracing crypto, replacing one energy-consuming structure with another?
Is there another way?
Yes! Gulden uses a second generation blockchain, called POW2. By cleverly combining the miners on the one hand and the witnessers on the other hand, a stable and secure network has been created that is way less dependent on just raw computing power.
Where a regular blockchain network needs a high hashrate (computing power) to protect the network against so called 51% attacks, the use of Guldens witness technology has raised the bar much higher (and the energy consumption correspondingly far lower). You can read more about this technique here.
Gulden, however, goes a step further.
By applying the SIGMA algorithm -which the Gulden miners use-, a lot less processing power is required. In addition, SIGMA does not require any expensive specialist equipment; a modern PC is all it takes. Because everyone with a desktop computer can mine Gulden, Gulden is also a lot more decentralized than regular networks with, for example, mining pools. If you have a roof full of solar panels, you could even mine CO2 neutral! More information about SIGMA can be found here.
In more concrete terms!
Gulden has a hashrate produced by the SIGMA miners currently (October 2019) totaling around 1100MH/s.
Calculations show that an average of 46kW of installed power is needed to create 1100MH/s of hashrate. This means that 402MWh is needed annually. (Witness accounts are mostly run on small Pi computers which consume a negligible amount of energy, so we leave those out of the equation).
Suppose you were to get power from a windmill for this. A small 2MW onshore wind turbine produces approximately 4000MWh of electricity per year.
In short, about 10% of a windmill is enough to run Gulden!
Not only for the environmentally conscious consumer, but also for companies that want to do business in an environmentally conscious and responsible way, applying the Gulden blockchain is actually a ‘no-brainer’ in that respect.
Another fact to consider is that the Gulden network is far from being maxed out. It can handle a lot more transactions on the same hashrate than it currently is. And even if more would be required, being a payment solution, Gulden is build with scalability in mind.