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Crypto Climate Change: How Proof-of-Stake Coins are Getting Even Greener

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Giuseppe Ciccomascolo
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Key Takeaways

  • A CCRI report compares PoS and PoW climate impact.
  • The study reveals significant disparities in energy efficiency among PoS networks.
  • Is Avalanche the best solution to tackle climate change?

From the launch of the first cryptocurrencies to today, the energy impact of mining and beyond has played a focal role in the debate on the world of cryptocurrencies. The Crypto Carbon Ratings Institute (CCRI), a crypto-climate impact research firm, annually assesses the environmental impact of various cryptocurrencies and blockchain ecosystems.

In the latest version of its “PoS Benchmarking Study,” CCRI offers relevant information on the energy consumption and associated carbon emissions of leading Proof-of-Stake (PoS) blockchain protocols, with a particular focus on the performance of public blockchain Avalanche.

PoS vs. PoW: Who Wins Climate Game?

Compared to the high power consumption associated with Proof-of-Work (PoW) protocols like Bitcoin, PoS blockchain networks have emerged as environmentally superior alternatives.

The 2023 PoS Benchmarking Study highlights the diversity in energy efficiency and carbon footprint among PoS systems, presenting an evaluation of Algorand (ALGO), Avalanche (AVAX), Cardano (ADA), Cosmos (ATOM), Ethereum ( ETH), Polkadot (DOT) and Solana (SOL).

The study’s most surprising revelation is that Avalanche, among its competitors, stands out as a beacon of energy efficiency. It uses only 8.2% of the energy consumed by Ethereum and only 0.00034% of that used by Bitcoin.

Crypto Climate Change: how crypto world is tackling climate change
How green is the crypto world?

The carbon footprint of PoS networks ranges from 71 to 2,088 tons of CO2e (tCO2e) per year, with Avalanche’s electricity consumption and carbon footprint equal to the energy consumption of 44 US households each year, or equivalent emissions to 29 return flights from Munich to San Francisco.

Surprisingly, Avalanche’s power consumption actually decreased by 4% compared to the previous year’s report, despite the accelerated rollout of subnets.

But Are PoS Networks All the Same?

This annual study also sheds light on disparities in the energy efficiency of PoS networks, highlighting the role of network design choices, hardware requirements, network decentralization, and consensus variations. The study reaffirms the importance of energy efficiency parameters in assessing environmental impact and transparency for investors, users, and regulators.

Emin Gun Sirer, founder of Ava Labs, highlighted Avalanche’s commitment to sustainability, describing it as a revolution not only in scalability but also in energy efficiency. He said: “Sustainability remains one of Ava Labs’ top priorities.”

“Avalanche’s novel protocol is a revolution not only for its scalability and time-to-finality, but energy efficiency as well,” said Emin Gun Sirer, founder of Ava Labs. “Sustainability remains one of Ava Labs’ highest priorities.”

Electricity consumption per year
Electricity consumption per year [kWh] and node count of analyzed
platforms’ lower bound, upper bound, and base layer chains
The study goes further, indicating that the electricity consumption per transaction of PoS blockchain networks like Avalanche can even be lower than that of Visa transactions, as demonstrated in a study by University College London (UCL).

Beyond transaction efficiency, PoS networks, with their low carbon footprint, have the potential to support the global transition to a low-carbon future, as highlighted in a recent World Economic Forum (WEF) report .

Benchmarking CO2

Christian Stoll, co-founder of the Crypto Carbon Ratings Institute, highlighted the importance of benchmarking CO2 emissions as a first step towards maintaining progress in energy efficiency and measuring climate impact.

“Benchmarking CO2 emissions is the first, vital step to maintaining progress towards energy efficiency, as well as gauging overall climate impact,” said Stoll, adding that “Besides tracking climate benefits, these metrics can be a very useful tool for providing transparency to investors, users, and regulators.”

In addition to collaborating with CCRI in assessing the climate impact of the Avalanche Protocol from 2021 , Ava Labs is taking further steps towards sustainability, including implementing a plastic-free policy for live events.

CCRI’s PoS benchmarking study reveals the potential of blockchain technologies to not only revolutionize financial systems but also generate positive environmental impact. Avalanche’s exceptional energy efficiency sets a new standard for blockchain networks, offering a sustainable, green solution for the future.

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Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors. Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
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