Crypto Carbon Ratings Institute analysts have found that the Tron blockchain’s DPoS algorithm requires many times less electricity than mining cryptoassets on the PoW consensus.
Commissioned by the Tron Foundation, the CCRI conducted a study and published a report on August 24 claiming that Tron’s low energy consumption requirements make it one of the greenest blockchains in the cryptocurrency market. Tron’s delegated proof-of-stake (DPoS) consensus mechanism helps reduce its carbon footprint, analysts say, especially compared to other cryptocurrencies such as Bitcoin with its PoW mechanism.
Crypto-Auditor informs that the DPoS algorithm involves users verifying transactions and maintaining the network by placing their TRX tokens in blockchain nodes. The report states that the energy consumption of PoW blockchains such as Bitcoin and Ethereum is over 83 million kWh and 22 million kWh, respectively.
Although Ethereum plans to switch to a proof-of-stake (PoS) consensus mechanism and abandon mining with its proof-of-stake.
“Tron’s annual energy consumption was 162,868 kWh for more than 2.31 billion transactions. This is approximately 99.9% less than the power currently consumed by Bitcoin and Ethereum,” the report said. According to CCRI, Tron’s energy consumption is “equivalent to the energy consumption of 15 average US households”.
The verification requirements are key reasons blockchains consume a lot of PoW energy. To verify PoW networks, users need a computer or hardware device capable of solving complex algorithmic tasks, such as the SHA-256 hashing function for Bitcoin and Keccak-256 for Ethereum.
Meanwhile, the CCRI says, while PoS networks consume less energy, other factors should be considered more when evaluating the performance of such networks: “For practitioners choosing a blockchain PoS protocol, there are other crucial factors such as decentralization, network bandwidth, and functionality (such as smart contracts) that should play a vital role as decision criteria.” In February, Polkadot was named by CCRI experts as the greenest Proof-of-Stake blockchain.