Bitcoin.ℏ: Making Proof-of-Work Cryptocurrency Low-Energy

Disclaimer: Bitcoin.ℏ, available at bitcoin.org.ht, is entirely separate from Bitcoin.org. These are distinct projects and should not be confused.

Among the most energy-intensive operations in the technology industry is the proof-of-work mining process for Bitcoin. Strong specialized hardware is needed for mining in order to solve cryptographic puzzles. A block of transactions is added to the blockchain by the first miner to solve the puzzle; the miner receives newly created Bitcoin as payment.

Energy problem with proof of work

With each transaction using hundreds of kilowatt-hours of energy estimates, Bitcoin’s annual energy consumption is higher than that of some midsized nations. An estimated 60 megatons of carbon emissions are produced annually by mining. Bitcoin.ℏ solves this problem by completely eliminating mining from the equation. It functions on the Hedera Hashgraph, a public distributed ledger that employs a consensus algorithm independent of proof of work.

Through virtual voting and Hedera's “gossip about gossip” protocol network, users can come to an agreement without using a lot of processing power. Consequently, the amount of energy needed for one Bitcoin is orders of magnitude less than Bitcoin, with a transaction value of about 0.0000003 kWh. 

Performance is not sacrificed for energy efficiency. Unlike Bitcoin, which typically only allows seven transactions per second, Hedera can handle up to 10,000. Transaction fees are fixed at $0.001 cents, and settlement happens in a matter of seconds. 

As a result, secondary scaling solutions and the excessive fees frequently connected to crowded proof-of-work networks are no longer necessary. Another aspect of the design is security. In order to protect against future attacks by quantum computers, Bitcoin.ℏ integrates quantum-resistant features. Long-term resilience is the goal of this precaution, even though actual quantum threats are still speculative. 

The environmental advantages and high throughput are highlighted by those who also cite Hedera's low energy consumption as a compelling case for wider adoption. The established reputation for decentralization and security network effects, and Bitcoin's established position, make one wonder if these benefits are sufficient to overcome them. The difficulty lies in gaining market acceptance, rather than proving technical prowess. More sustainable practices are already being adopted by the cryptocurrency industry in general. 

Industry-wide switch

By switching to a proof-of-stake model, Ethereum has cut its energy consumption by more than 99%. Renewable energy sources like solar and wind power are being incorporated into the operations of some Bitcoin mining companies. It is unlikely that the proof-of-work approach will be abandoned by the Bitcoin protocol, so its energy requirements will continue to be high.

An alternative strategy is what Bitcoin.ℏ offers and what builds a cryptocurrency from the ground up without the structural inefficiencies of proof of work. It blends low cost, high throughput energy efficiency and security considerations for the future. It will depend on user adoption, integration into payment systems and stakeholders willingness to consider alternatives that deviate from accepted norms whether this model can challenge Bitcoin's dominance.

Bitcoin.ℏ at least shows that cryptocurrencies do not have to be associated with high energy usage. Blockchain-based systems can be redesigned to satisfy environmental and technological objectives without hurting the trifecta of security, decentralization and scalability.