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Since the advent of Bitcoin, the consensus mechanism that secures the world’s biggest cryptocurrency, Proof of Work, has received rigorous scrutiny. Beyond its ability to administer the bitcoin network, PoW has been criticized for its energy-centered system of achieving consensus. Research shows their energy consumption rivals the electricity used by some small countries. If the high energy use feature of bitcoin’s proof of work is eliminated, the cryptocurrency would, undoubtedly, rise to become the new ‘money.’
Scientists at IBM Research, the Research and Development wing of the tech giant, said they have discovered how to make Proof of Work (PoW) an energy efficient consensus mechanism. That, according to the scientists, will increase security and scalability for the network.
How? The research paper claims the Internet of Things (IoT) would be ideal for eliminating PoW’s energy consumption. Bitcoin mining involves solving complex mathematical puzzles. Miners have to rely on powerful GPUs and ASICs, which end up consuming a tremendous amount of electricity because all nodes have to be involved in the solution generation process.
IoT devices, from small sized body sensors to automobiles, differ in the way they consume energy resources. The IBM Research posits that not all nodes on an IoT network need to be involved in the mining process. Researchers used a simulated blockchain environment (a testnet) to divide nodes into small groups of 250 to 1,000. By doing so, they used an algorithm to select what fraction of each group should be engaged in the mining process based on the amount of energy each node uses, as well as the security parameters required to do so. According to the researchers, this approach yields optimum outcomes.
Dubbed “Hybrid IoT Blockchain,” the research paper theorizes that:
“Efficiency in IoT can be defined as an optimal utilization of hardware resources and energy. Therefore, in order to achieve that, the IoT devices on the blockchain should optimally utilize resources and energy to maintain and progress the blockchain.”