Financial Markets and Funds partner Neil Robson spoke with IT Pro regarding energy consumption issues with blockchain technology. Neil notes that the vast amount of energy consumed by Bitcoin as it confirms a financial transaction as legitimate is its "not so secret" dirty secret. He stated, "For Bitcoin, or other cryptocurrencies, to become sustainable and be a suitable investment for an environmental, social, governance (ESG) fund, it will be necessary for them to evolve or be re-engineered away from the proof-of-work model so that they use significantly less electricity."
One alternative to massive energy consumption on the blockchain is the proof-of-stake model, where miners are to stake their shares of any given cryptocurrency to validate each transaction. Neil added, "If cryptocurrencies were to evolve to a proof-of-stake, or other models, without the need for vast amounts of electricity, which Bitcoin probably never will, then maybe they could eventually become a sustainable investment for ESG investors." ("Could using blockchain kill your green credentials?," December 1, 2021)
London
