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Limitations of Blockchain Technology – Security Boulevard

The elephant in the room is the viability and sustainability of blockchain technology. Cryptocurrency mining, for instance, requires specialized rigs that consume electricity. In certain estimates, at the time of writing, the bitcoin network’s energy consumption came in at 41 globally if it was a country. This means the bitcoin blockchain consumes more energy than Switzerland and Czech Republic.

Most of the energy consumption is related to mining. The security and integrity assurance come from cryptographic primitives that combine with the restriction related to the block’s structure (number of leading zeros for the generated hash). This is articulated as the proof of work. The difficulty associated with the evidence of work increases over time based on the consensus framework of the network. This impacts only the public blockchain, as private blockchains can function with low proof of work requirement.

There are potentially three paths forward. The first is to keep the difficulty level for the block generation constant. Unfortunately, this might not resolve the energy consumption problem. Why? Generating the block to be appended to the blockchain is not a linear search problem; it is more like a lottery. You might get it in a first hash generation or might not get it even after millions of hash generations.

The second options floated around is increasing the computational power. It is correct that the computational power increase of Graphical Processing Units (GPUs) have grown faster than Moore’s Law. Furthermore, an argument can be made, and it has some weight in its rationality, that the improved GPUs will consume less energy than their previous versions. This is true, and it might in the future be used as a potential path to reduce the energy requirements of the blockchain network. However, it is still an open-ended question, and we do not have (Read more…)


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