A recent study conducted by University College London (UCL) has analyzed the environmental impacts of six notable distributed ledger technologies (DLT). The findings highlight that Hedera Hashgraph exhibits the lowest energy consumption among these technologies.
The research, undertaken by UCL’s Centre for Blockchain Technologies, evaluated Algorand, Cardano, Ethereum 2.0, Hedera Hashgraph, Polkadot, and Tezos. The study focused on how second-generation consensus models, particularly Proof-of-Stake (PoS), compare to earlier models such as Proof-of-Work (PoW).
Dr. Paolo Tasca, executive director of UCL CBT, explained, “The advantages of Proof-of-Stake are well recognized, but our research reveals that not all PoS networks offer the same environmental benefits. This is crucial for investors and users when choosing a network. While the shift of Ethereum 2.0 to PoS is promising, it’s essential to monitor its environmental implications.”
To quantify energy consumption, the study developed a basic mathematical model for validator-based Sybil attack resistance schemes, revealing that energy requirements for different consensus protocols hinge on the number of active validators. As DLT networks expand, the report emphasizes the importance of prioritizing environmental sustainability. Factors such as the quality of hardware used by node operators and the architectural choices of DLT systems should be carefully considered in terms of their ecological impact.
The report concludes that the surge in DLT adoption since Bitcoin’s inception has catalyzed the creation of more efficient consensus mechanisms. PoS is regarded as a more environmentally friendly alternative to PoW. The mathematical model applied to six PoS-based DLT systems supports this claim, demonstrating that their energy consumption per transaction is significantly lower—by two to three orders of magnitude—than that of Bitcoin.
Notably, the study also revealed stark differences in energy consumption among the analyzed PoS systems, with permissioned systems consuming notably less energy per transaction than their permissionless counterparts, a discrepancy attributed to the management capabilities inherent in permissioned networks.
Dr. Leemon Baird, co-founder and chief scientist at Hedera Hashgraph, remarked, “This UCL study reaffirms our commitment to developing a sustainable future for the blockchain industry and validates the efficiency of Hedera Hashgraph technology. We designed our hashing algorithm with an emphasis on efficiency, establishing our network as the most environmentally sustainable public distributed ledger globally.”
He further noted that Hedera’s operations are already known to consume significantly less energy per transaction compared to Bitcoin and Ethereum, and this latest research demonstrates that Hedera outperforms other leading PoS networks in environmental sustainability. Additionally, Baird mentioned that Hedera has achieved carbon neutrality through regular carbon offset purchases, in collaboration with Terrapass, a third-party assessment provider. This initiative, endorsed by the Hedera Governing Council—which includes UCL—underscores their dedication to creating a sustainable decentralized ledger for the digital economy.
Recently, the London School of Economics joined the Hedera Governing Council. Dr. Carsten Sorensen, an associate professor in digital innovation at the LSE, expressed, “Joining the Hedera Governing Council marks a significant advancement in our research collaboration and knowledge sharing concerning digital transformation. Our goal is to enhance our understanding of how DLT and blockchain technologies can positively influence society and facilitate pioneering sustainable projects.”