Let’s face it, not everyone understands crypto. To make matters worse, several misconceptions have emerged over the years, allowing baseless and unfactual narratives to cloud people’s perspectives of cryptoassets. Over the past year, the industry has especially caught flak for its energy consumption. Such has caused people to wonder, “ is crypto bad for the environment and a complete waste of energy?” Not only is it up for debate as to what is a productive use of energy (did you know American household Christmas lights consume more energy than El Salvador uses in a year?) but not all blockchains are created equal. In this article, we show how energy efficient Solana is relative to peers by comparing Samoyedcoin’s (SAMO) energy usage against other dog coins.
Breaking Down Crypto’s Environmental Impact
It’s true. In addition to SAMO transactions costing a fraction of a penny and settling in real-time, the technological advantages of Solana means that SAMO is also lightyears ahead of its peers in terms of energy efficiency; it also means that SAMO stands as the most sound form of dog money in all of crypto! But don’t just take our word for it, let’s dive into how SAMO stacks up against Dogecoin (DOGE) and Shiba Inu (SHIB).
First and foremost, we must distinguish the underlying technology of each coin. As alluded to earlier, SAMO is a Solana Program Library (SPL) token deployed on the Solana blockchain. Meanwhile, DOGE runs on the Dogecoin blockchain (similar to Bitcoin), and SHIB exists on the Ethereum blockchain. What DOGE and SHIB have in common is that both exist on a blockchain that utilizes a Proof-of-Work (PoW) consensus mechanism. In contrast, Solana uses a more sophisticated consensus mechanism known as Proof-of-Stake (PoS).
What Makes Solana Greener?!
So what’s the difference, you ask? First, we should note that the purpose of a consensus mechanism is to allow networks of computers to work together and stay secure. To coordinate and maintain a decentralized system, like Bitcoin or Solana, network participants must agree on the correct condition of the system and who owns what coins. Without a consensus mechanism, these computers cannot reliably agree on what transactions have already happened and which transactions are new and legitimate.
Now, not all consensus mechanisms are the same. However, they’re all designed to ensure that incentives are aligned and network participants are rewarded for being honest about the transactions they process. In the case of PoW, hardware and computational power are used by network validators (also known as “miners”) to propose a new group of transactions (also known as a “block”). In exchange for this service, validators get rewarded with coins, also known as “block rewards.” But for PoS, validators only have to lock up a certain amount of value to be eligible to propose a new block and earn the block reward. This process of “locking up value” via cryptoassets is known as “staking.” Said differently, PoW relies on computational hardware (energy) to secure its network, while PoS relies on staked assets (coins or tokens).
Now that’s out of the way, it should now be obvious that blockchains that use the PoS consensus mechanism are innately less energy intensive than those that use the PoW consensus mechanism. With that said, let’s see for ourselves just how different these consensus mechanisms are in terms of energy consumption!
The Data Doesn’t Lie
According to the latest Solana’s Energy Usage Report, two Google searches use 2,160 Joules (a standard unit of energy) of energy. In comparison, a single Solana transaction consumes roughly 2,700 Joules. This means that not only does Solana use a menial amount of energy per transaction, but that a single SAMO transaction consumes less than 3 Google search’s worth of energy.
However, if we shift attention to DOGE, we’ll see that a single transaction on the Dogecoin blockchain consumes 430,000 Joules. The comparison gets even crazier when considering SHIB, which consumes nearly 690 million Joules. Needless to say, not all dog money is created equal…
But let’s take things one step further. If one were to ascribe to the idea that money merely reduces down to trust and dog money has a future, it makes sense to consider just how much energy each of these chains consumes per, for example, 100,000 transactions. In the graphic provided below, we’ll see just for ourselves how inefficient DOGE and SHIB are as a form of dog money.
While 100,000 SAMO transactions consume 51 kWh, a bit more energy than the daily average U.S. household, DOGE consumes more than 12,000 kWh per 100,000 transactions – nearly 415x more energy than SAMO! This also means that if DOGE were to process 1.3 million transactions, DOGE would consume as much energy as the New York Stock Exchange (NYSE), one of the world’s largest marketplaces for securities and other exchange-traded investments, does in a single day.
For better or for worse, it doesn’t stop there. If we turn our attention to 100,000 SHIB transactions, we’ll see that SHIB uses a jaw-dropping 19.9 million kWh worth of energy. Not only is that 25 days’ worth of energy in Liberia, a country in Western Africa with around 5 million people, but nearly 830,000x more energy than SAMO and almost as much energy as Finland consumes in 2.5 hours (22.7 million kWh).
That’s A Wrap!
As we can see, the notion that crypto is hazardous to the environment is just flat-out wrong. Some blockchains (like Solana) are substantially more energy efficient than others. On top of that, the applications, communities, and ecosystems built on top of these energy-efficient blockchains leave an appreciably smaller environmental footprint than peers. So the next time you come across a crypto noobie or veteran who, at one point or another, dipped their toe into the realm of dog money, remind them that you cannot teach an old dog new tricks! Thanks to the technological advances of Solana, SAMO is, without a doubt, the hardest form of dog money in the game, with near-instant, virtually free, and eco-friendly transactions.
|Disclaimer: This information is general information and is intended for educational purposes only. The information contained herein is not intended to constitute legal, tax, accounting or investment advice. Information, opinions and views are solely the author’s own and should not be used as the basis of any investment decision. When making investment decisions, contact a licensed investment professional who can ensure the suitability of your investments. Do your own research.|