In order to reach the heights it has today, the crypto sector has experienced a series of significant changes over time.
In the beginning, crypto mining was carried out with modest computers and little-to-no complicated or high-powered tech. Bitcoin was generated (mined) using only general-purpose central processing units, or CPUs. The appeal of easy money drove an inflow of new participants, resulting in the quick development of the Bitcoin network – so much so that these first-generation miners were unable to keep pace with demand, leaving them outdated in less than a year.
Once outpaced, more powerful graphics processing units, or GPUs, were used to carry out mining endeavours. Chances are that you’ve seen images of gigantic, slightly dystopian, warehouses loaded from floor to ceiling with thousands of these devices, all linked together — a crypto mine.
As you can imagine, the amount of energy and resources required to carry out these operations increases year on year. In fact, the amount of energy used to mine and trade Bitcoin alone now averages at over 200 TWh per year — a figure comparable to the energy usage of the entirety of the nation of Thailand.
Is this just down to increased usage, interest, and desire to mine? Not quite.
Why Most Cryptos are Unsustainable
In order to understand why most cryptocurrencies require more energy to trade and mine, we need to understand how they work. By now, you’ll have almost certainly heard the term ‘blockchain’ — and herein lies part of the problem.
One of the hailing graces of cryptocurrencies is their perceived security. The world’s two biggest cryptos, Bitcoin and Ethereum, utilise a ‘Proof of Work’ or ‘Pow’ system, which essentially requires users to solve difficult digital equations in order to mine coins and add a new block to the blockchain in the process. While this was designed in order to prevent the security of these currencies from becoming compromised by unscrupulous individuals, an unfortunate side-effect is the massive amount of computing power required to beat other users to the punch on solving these equations, thereby earning a mined coin. The biggest, best, and most powerful stand to ‘win’, and with the blockchain increasing in size and complexity with every transaction, the computing power required to be successful in these cases also increases exponentially.
As you can imagine, this is an ever-growing problem and is far from sustainable.
Dagcoin is Different — Here’s How
Unlike blockchain-reliant cryptocurrencies, the architects behind Dagcoin have taken a different approach to confirming transactions on the ‘DAG-chain’. Dagcoin uses a proprietary system that is based on a small, static number of witnesses who confirm transactions. This means that no matter how many transactions are carried out over time, and how large the volume of information stored within the DAG-chain grows to be, executing energy-thirsty mining operations isn’t necessary, and never will be.
To find out more about how Dagcoin is working towards building a cleaner world with decentralised finance at the forefront, head to the sustainability page.