Bitcoin is the forerunner of modern blockchain technology. It has, rightly or wrongly, become synonymous with blockchain itself. The energy consumption issues of blockchain are serious enough to warrant a look at how we can reap the benefits that blockchain has to offer while reducing the need for huge amounts of power.
We talked with Dr. Bernardo David, an assistant professor at the Tokyo Institute of Technology and Ph.D in Computer Science from Aarhus University. The current focus of his work is on the theoretical and practical aspects of secure multiparty computation. David is also involved in the development of the Cardano blockchain, a project of IOHK for which he is a research fellow.
“Fortunately, it turns out that we don't have to sacrifice security in order to improve on energy efficiency.”
In a meetup organised by Binary District, David will be speaking on PoS blockchain protocols at Primalbase Amsterdam on July 19. The topic of his talk is ‘How to reach consensus without compromising security?’
A Field of Exciting Open Problems
David’s interest in cryptography has taken him across the world, from his native Brazil to Japan via Denmark, where he obtained his PhD.
“I started doing research on cryptographic protocols about 10 years ago, when I was doing my Bachelor's degree at the University of Brasilia back in Brazil,” he says. “Cryptography is a very interesting field with lots of exciting open problems, so I found it very attractive as a young researcher.”
“In 2011, I had the opportunity to spend some months visiting the cryptography research group at NTT Corporation (the main telecom company in Japan) and fell in love with Japan. After that I did my PhD at Aarhus University in Denmark and, by the time I was finished, I heard it would be possible to take up this position at Tokyo Tech, working at a lab funded by IOHK.”
David was also a visiting researcher at the Cryptography Research Group of Bar Ilan University in Israel.
Crypto Has a Dirty Secret
One of the criticisms leveled against cryptocurrencies is that they are far from green. Dire predictions are being made about Bitcoin itself.
For example, CNN tech quoted Eric Holthaus as saying, “Bitcoin is slowing the effort to achieve a rapid transition away from fossil fuels.” More worryingly, he also said that Bitcoin may consume as much power as all of the US by mid-2019.
“This is certainly causing a big environmental problem, especially as miners seek cheaper and at times dirtier sources of energy.”
David explains that: “Bitcoin uses a proof-of-work based protocol that requires energy intensive ‘mining’, so of course it results in huge energy wastes. It's a waste because you have all these miners computing tremendous amounts of hash functions to try and mine a block but only one of these computations is actually used to generate a block, while the rest is wasted. This is certainly causing a big environmental problem, especially as miners seek cheaper and at times dirtier sources of energy.”
Source: Bitcoin Magazine
There is No Need for Trade-Offs
The key to improving blockchain’s energy consumption is the use of Proof of Stake instead of Proof of Work model that many public blockchains utilise.
“Fortunately, it turns out that we don't have to sacrifice security in order to improve on energy efficiency,” David says. His view is that it is possible to eliminate energy waste by using Proof of Stake.
He goes on to explain the technical aspects of how it would all work. “In a proof-of-stake based blockchain, it is the coin holders (or stakeholders) themselves who generate each block, without depending on third party miners or needing to do energy intensive computations.”
“Basically, each stakeholder is chosen to generate a given block with probability equivalent to the amount of coins they hold in that chain, in a lottery-like process where each coin you hold works like a ‘lottery ticket’.”
A New Role Model for Blockchains
It is here that David has an interesting role to play. He is a member of the team that developed the Ouroboros proof of stake algorithm. Cardano, which utilises Ouroboros, has put strong emphasis on academic research.
In fact, the founder and CEO of IOHK, the company behind Cardano, said at the launch of the project, “The vision for Cardano was that it would pull together academic research and bright ideas from computer science to produce a cryptocurrency capable of much more than its predecessors.”
So, as David explains, “Ouroboros was the first proof-of-stake based blockchain protocol to achieve strong security guarantees that can be mathematically proven. The first challenge in constructing such a system is to clearly define a security model that mathematically explains what it means for the system to be secure and specifies which attacks it should be able to withstand.”
“Such a model must be defined in such a way that it corresponds to the real world operation of the protocol and takes into consideration the real world threats the protocol will be exposed to. After designing such a model, you still need to come up with a protocol that can be proven to be secure in your model.”
“In the Ouroboros protocol, we employ a mix of well established cryptographic techniques along with a new approach to prove that the resulting protocol is secure, according to a meaningful security model. The final protocol only requires the stakeholders to perform very simple operations that could even be done on a smartphone, without any energy waste or vast computational resources.”
Source: Waves Platform blog
Ouroboros Gets a New Boost
The Ouroboros team have not rested on their laurels. They have now introduced Praos, which further improves on the security and the efficiency of the algorithm. In the original Ouroboros model, all stakeholders were required to run a protocol for generating the randomness used in running the ‘lottery’ which selects the stakeholder that generates each block.
The protocol required extra computation and extra information to be posted on the blockchain, which had an additional cost attached to it. The original Ouroboros could also be proven secure only in networks where all users/nodes were synchronised, meaning that they had to have a common clock, and all the messages were delivered within a fixed delay.
Now that Ouroboros Praos has been introduced, there are certain improvements that have been made.
“In Ouroboros praos, we introduce a more efficient method to generate the randomness in such a way that virtually no extra computation and information has to be added to the main blockchain protocol,” David explains. “This improved protocol results in slightly ‘biased’ randomness, but we prove that this does not affect the security of the protocol.”
“Moreover, we improved the protocol in such a way that it remains secure even against very powerful adversaries that can immediately corrupt each node running the protocol (effectively hacking any node of their choice as long as they do not control more than half of all of the coins in the system) and introduce arbitrary delays in message delivery in the network.”
“The bottom line is that, in Ouroboros Praos, we can prove security in a model that is much closer to the real world attacks and internet infrastructure the protocol will be subjected to, as well as making it more efficient.”
Blockchain is Here to Stay
Blockchain is unwieldy sized, and many existing blockchains are power hungry beasts. There is hope, though, that like every other technology, incremental improvements over time will help in the evolution of a refined tech that could be used in our daily lives.
“I believe that cryptocurrencies (and specially blockchain technologies) are here to stay.”
David, for one, thinks cryptocurrency will likely be adopted by mainstream society. “I believe that cryptocurrencies (and specially blockchain technologies) are here to stay,” he said.
“Apart from enabling decentralized, censorship-free store and exchange of value, blockchain technologies have the potential to be applied to a number of important real world problems. For example, you can use them to run smart contracts, to do decentralized lotteries and games, to keep track of reputation information and a broad range of further applications.”
Privacy is the Key to the Future
David’s current focus is on developing efficient and secure protocols for ‘multiparty computation (MPC)’. These protocols allow users who do not necessarily trust each other to run a computer program and then take input information that users want to keep private.
The end result is that even though each users gets the output of the program, no party is given information about the input that they made.
Explaining his future plans and ambitions, David says, “My goal is to develop MPC protocols that can be efficiently combined with smart contract mechanisms in order to determine how money gets distributed based on private information held by the participants of the contract.”
“This will enable a number of applications, such as truly secure decentralized cryptocurrency exchanges and privacy preserving smart contracts that take private information as input without ever revealing it.”
Blockchain’s energy consumption is a very real problem. It’s easy to think of emerging technology as clean and energy-efficient by default, but the reality is that the computational power needed to run a blockchain is huge. So huge, in fact, that finding cleaner solutions has quickly shot to the top of the to-do list for the field
The Proof of Work mechanism for Bitcoin alone uses the same amount of energy that a country like Switzerland uses in a year, for example. Bitcoin already accounts for 1.5% of the total electricity consumed in the United States, and we are still a long way from it actually being used as currency. There will be no functional blockchain without efficient scalability, not unless we want one our most exciting industries to be one of our most environmentally disastrous.
Illustrations by Kseniya Forbender
To contact the editor responsible for this story:
Margarita Khartanovich at [email protected]