DLT Environmental Impact | UCL Blockchain
Despite the increasing awareness of the potential environmental impact of Proof of Work blockchains, and the opportunity presented by Proof of Stake in this regard, the differences in the environmental impact of various PoS systems are not fully understood. This paper seeks to shed light on the energy consumption of some of the most important DLTs in the space.
Despite the increasing opportunity for digitisation and looming disruption, currently, application areas and progress of DLT adoption in this area are not well understood. This report seeks to shed light on where DLT is being applied functionally in global physical supply chains and within certain sectors.
Researchers at UCL’s Centre for Blockchain Technologies have released a pre-print looking at the environmental impact of Distributed Ledger Technology (DLT). This study fills a gap in the literature by developing a model to compare different configurations of Proof-of-Stake consensus mechanisms in various DLTs such as Ethereum 2.0, Algorand, Cardano, Hedera, Polkadot and Tezos.
It is already established that blockchains resorting to Proof of Work, due to the computational effort they require by design, entail a much larger energy footprint than Proof of Stake networks. However, the exact energy consumption characteristics of PoS-based systems and the difference between them are not widely understood. This study builds an energy consumption model and, by applying it, studies the environmental impact of six important DLTs. The study furthermore compares their energy consumption with that of Bitcoin and VisaNet, and lays the ground for important future work in the discipline.
