Redefining Blockchain Energy Use: How Kadena's Scalable POW Outperforms Traditional Crypto Mining

Bitcoin and Proof-of-Work (PoW) mining have garnered a reputation for being energy-inefficient. While regulators are attempting to curtail all mining activity in the United States, it is important to note that not all Proof-of-Work blockchains are the same. Kadena’s Chainweb is the only PoW blockchain that is an energy-efficient and scalable alternative to existing PoW blockchains.

Bitcoin Has a Reputation for Being Energy-Intensive

When Bitcoin first came online in 2009, the world had its first taste of an open financial system that moved away from the Federal Reserve's centralization. With Bitcoin’s rise, the world finally experienced an alternative to inflationary economics that had persevered following the decoupling of the dollar from gold in the 1970s.

While Bitcoin has set the trend for crypto-economic incentives to come online, Bitcoin and other PoW networks are known to be energy inefficient. This is due to the need for mining, a core component of participating in this new economic system, which requires large amounts of computational power (or electricity) to operate these networks. As a result, there has been a surge in mining to the point where reporters and governmental organizations argue that it impacts global electricity usage.

The United States government estimated that 0.6% to 2.3% of the nation’s electricity use in 2023 was due to just 137 mining operations (EIA, 2024). As a result, the United States is seeking ways to mitigate the surge in electricity use from mining.

However, this argument is based on the false assumption that all Proof-of-Work networks are equally energy inefficient. This is not the case for Kadena because:

• Efficient Mining: Kadena offers more available blocks for miners to mine on, leading to less energy wastage due to less competition
• Energy-Efficient Transactions: As Kadena scales to more chains and provides higher throughput, the energy usage of each transaction decreases, making each transaction highly energy-efficient

More Efficient Mining

In the case of Bitcoin, a single-chain network, all miners must direct their mining power to the same block. Since only one miner can win the block, the rest of the miners' energy is wasted.

Currently, Kadena, a multi-chain network consisting of 20 chains, has more blocks for miners to mine and process transactions. Kadena miners don’t have to compete for just one block but 20 different blocks, which means less energy from miners is wasted.

Kadena’s Scalability Leads to More Energy-Efficient Transactions

Since Kadena is the only scalable PoW network where there is theoretically no limit on transactions per second (tps), the energy efficiency of each transaction is maintained as we grow to more chains. To calculate the energy per transaction on Kadena’s network, we must make two assumptions for this example:

• The hashrate of Kadena’s network used at the time of this article is 769.57 PH/s (petahash per second)
• All miners on the network are of 1 type:
  • The most efficient: KA3 with a hashrate of 0.166 PH/s and power of 3154 W (Watt)
  • The least efficient: BM-K1 with a hashrate of 0.0053 PH/s and power of 835 W

*In reality, the hashrate of Kadena’s network varies every few seconds, and the network consists of a variation of up to 16 different miner types listed here.

First, we divide our network’s total hashrate by the hashrate of 1 type of miner, which equates to the total number of miners currently needed to secure the network. Next, we multiply the total miners by the power of each individual miner to get the power consumption of the entire network. After converting the power consumption of the entire network to kWh (kilowatts-hour), we divide that value by the number of transactions per year, giving us the amount of power per transaction (kWh/tx).

Below are the results of our calculations based on the assumptions above compared to Bitcoin, Visa, and Mastercard. As Kadena scales to more chains and the TPS increases, each transaction becomes more energy-efficient.

With its high energy use and single-chain configuration, Bitcoin consumes a lot of power per transaction. In comparison, Kadena's power usage per transaction decreases significantly as the number of chains increases, showcasing superior energy efficiency, especially in the KA3 (100 chains) and KA3 (1000 chains) configurations. Visa and Mastercard have much lower power per transaction, likely due to their non-blockchain infrastructure.

From here, we see that even in the scenario, at 20 chains with 1000 TPS, or 3.6M transactions per hour, the energy consumption per transaction is less than Bitcoin. Once Chainweb scales to 1000 chains, the energy consumption per transaction is less than both Visa and Mastercard.

So, the energy consumption will be the same as the number of chains on Kadena increases. Additionally, the energy efficiency of processing transactions will increase once we scale to multiple chains.

Conclusion

Mining has garnered a reputation from regulators, especially in the United States, for being energy-intensive. As regulators attempt to limit all mining activity, not all Proof-of-Work blockchains are designed the same.

Kadena’s Chainweb is an energy-efficient and scalable alternative to existing PoW blockchains. It is competitive with the energy output of Mastercard and Visa as the number of Kadena’s chains scale up (as measured by energy per transaction).

Citations

[1]: Bitcoin Energy Consumption Index, Digiconomist
[2]: Beyond Bitcoin: Evaluating Energy Consumption and Environmental Impact across Cryptocurrency Projects, by Ali Khosravi and Fanni Säämäki