DMD solutions vs. green or HDD mining
The blockchain industry is racing against time to find a solution to the resource waste challenge. While Bitcoin miners are targeting renewables, Chia is promoting so-called HDD mining (which can fry your hard drive). But DMDv4 goes further with its unique cooperative consensus model.
Environmentally-friendly Bitcoin mining doesn’t solve the key problem
Back in May, when Elon Musk announced that Tesla wouldn’t accept Bitcoin anymore, the price of BTC crashed. Musk’s reasoning: Bitcoin mining consumes too much energy, increasing the consumption of fossil fuels.
Some time later, he met with a few prominent North American miners, who later formed the self-styled Bitcoin Mining Council to promote renewable energy use. Musk tweeted that the initiative was ‘promising’, causing a BTC price rise.
In early July, the Council reported that the use of green energy in BTC mining increased from 36.8% in Q1 2021 to 56% in Q2. In particular, the energy trading firm Mercuria is now supplying BTC miners with renewable energy.
All this sounds very optimistic, but the talk about solar or wind energy detracts attention from the main problem: Proof-of-Work mining is incredibly energy-intensive, whichever type of energy one uses. With renewables, we can reduce the CO2 emissions and push away the moment when oil and gas are depleted. But there is no way to make mining use less electricity.
Of course, it’s the very nature of PoW that makes the Bitcoin network so secure in the first place. All miners compete to solve the same puzzles and check each other’s solutions for validity. The system is designed to be wasteful and safe at the same time. Perhaps Satoshi Nakamoto didn’t realize how huge the network would become — or perhaps he did and was OK with it. The takeaway: Bitcoin is wasteful and will remain that way.
Chia Proof-of-Space: how to fry an SDD in 40 days
Recently there’s been a lot of marketing hubbub around a new cryptocurrency called Chia. Instead of requiring a lot of computational capacity and electricity, it requires storage space: in fact, the consensus algorithm is called Proof-of-Space.
To mine Chia, one needs to allocate as many 100 GB ‘plots’ on HDD or SDD drives as possible. As Chia mining became very popular in Asia in spring 2021, retailers in some places (such as Vietnam) even ran out of hard drives.
However, this supposedly eco-friendly way of mining has a dark side: it damages and kills hard drives. HDDs aren’t designed to be written over so frequently, so they burn out. According to some reports, a standard 512 GB drive can die after 40 days, the standard lifespan (without mining) being 5 years. A 1 TB disk will last two months.
Those drives took a lot of resources to make, and when they break, they become non-recyclable computer waste. There’s nothing ‘green’ about this — especially since it takes more and more drive space to get the same amount of Chia as the network grows.
DMDv4: true cooperative consensus
When we started work on DMDv4, it was clear from the start that mining wasn’t an option. Proof-of-Stake wasn’t a solution, either: it’s still competitive and uses a lot of resources — not on a scale of a country, perhaps, but on a scale of a large city.
We chose an implementation of HBBFT (Honey Badger Byzantine Fault Tolerant consensus). It affords excellent throughput (DMDv4 can process 400 tps and higher), dynamic block time, and high security — all without mining. DMDv4 will have 25 validators (picked out of a pool of maximum 428 every 12 hours), so the whole network will require just 25 machines to operate. Compare this to the 150,000+ validators that Ethereum 2.0 already has — and imagine the difference in energy consumption.
Another step we took was to make the DMDv4 coin supply finite — quite scarce, in fact. The whole supply will be produced at once during launch, so there will be no energy spent generating coins. To solve the issue of lost coins (that could reduce the available supply), we’ve created a clever reinsertion system — read about it here.
When we talk about cooperative consensus, we mean that validators don’t compete for block rewards. Rather, the reward is shared among them equally — and they, in turn, share it with their delegators. In PoS networks, the higher one’s stake, the higher the chance to be selected as a validator. But in DMDv4, no more than 50,000 DMD can be staked on a single validator, preventing excess concentration of power.
As far as we know, DMDv4 will be the first network to implement a combination of HBBFT with a DpoS-based node selection mechanics. Cooperative consensus together with fair validator selection and remuneration makes DMDv4 one of the most efficient and decentralized blockchains on record — and truly sustainable and eco-friendly. Visit us at https://bit.diamonds/ to learn more!
