The International Monetary Fund (IMF) has taken a big step forward in recommending the creation of an environmentally friendly payment system, conducting research on the energy consumption of different Crypto consensus mechanisms in the ecosystem.
It is a fact that Crypto, which uses the PoW proof-of-work consensus mechanism, has high energy consumption.
PoW poses a serious threat to the environment due to the emission of carbon-containing smog, which increases the preference for Crypto assets that use non-PoW mechanisms.
The IMF elaborated on the environmental impact of different Crypto consensus mechanisms , and intends to use this to work out the best mechanism for the design of central bank digital currencies.
In addition, the IMF discussed policies to improve Crypto’s environmental impact and advised developers to opt for non-PoW protocols.
The IMF compared the energy efficiency of several non-PoW protocols with that in the traditional financial system and gave the former a high rating.
The IMF pointed out that the core design structure of non-PoWCrypto applications and payment systems are more user friendly.
The IMF noted that BTC is a popular protocol that uses the PoW mechanism.
The annual energy consumption of BTC is estimated to be around 14.4 billion kilowatt-hours (TWh). The protocol can reduce the energy cost per transaction with its scalability solution, but its total energy consumption is still high.
The International Monetary Fund recommends that central banks focus on developing environmentally friendly CBDCs . The process to achieve this can integrate the different steps of the experimental phase, and the CBDC must choose the appropriate platform and hardware.
At the same time, CBDC design proposals should remain below the carbon footprint of the central bank’s existing system.
The IMF study estimated the annual energy use of the global payment system at about 4.73 billion kilowatt-hours, which is equivalent to the annual consumption of some regions such as Bangladesh and Portugal.
The organization emphasized that the likelihood that policymakers will begin to mainstream Crypto technology depends on the environmental impact of its mechanism .
The IMF also suggested that CBDCs for top banks should have features such as greater resilience, offline capacity and compliance .
The Iota Foundation has partnered with Dell Technologies to create a system to track carbon footprints in real time.
The target will rely on sustainable energy from composting facilities and bioenergy. In its operations, it will track carbon emissions in near real-time.
The original text comes from bitcoinist, compiled and organized by the blockchain knight, the English copyright belongs to the original author, please contact the editor for Chinese reprint.
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