“To support the speed, finality and sustainability required for business, we knew mining would be unsustainable because of its cost and (slow) transaction processing speeds,” said Chris Ferris, chief technology officer of open technology at IBM.
Blockchain developer R3 has built its own energy-efficient blockchain for major financial institutions. They developed the permissioned blockchain Corda to accommodate banking regulations around protecting sensitive customer data.
Some major financial institutions are betting on its success. Equity investors include Bank of America, Barclays, UBS and Wells Fargo.
The major players face competition from a sea of fintech startups and university researchers. “These days every geek has an ICO white paper in their hands and they’re pushing (their algorithm). More than half of them are broken,” Sirer said.
Sirer’s team at Cornell is developing a green blockchain algorithm called proof-of-useful work, in which the next computer to validate a block and collect new coins is chosen based on energy expended performing a useful function in the real world.
“For example they might be trying to do protein folding. ‘Look, I worked for 10 minutes and solved so many protein fold efforts and that should entitle me to add a block to the end of the blockchain,'” Sirer said.
His team faces competition from MIT professor of engineering Silvio Micali. Launching its currency in May, his startup Algorand developed a public blockchain that runs on a version of proof-of-stake, which drives electricity consumption to almost zero, Micali said. The blockchain can process thousands of transactions every few seconds, he said.
The money Algorand saves in electricity costs are then passed on to those who transact using the blockchain, resulting in much lower fees than when transacting with bitcoin, Micali said.
In the race to business-friendly blockchain, Micali welcomes competition from the corporate giants of America. But on a fundamental level, he said, “I care about the planet.”