With Zilliqa, do more with your GPUs, miners!

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It’s hard to turn anywhere and not find someone talking about the influence of blockchain technology and the various virtual currencies supported by it. Popular cryptocurrencies like Bitcoin and Ethereum rely on armies of miners to process and confirm the transactions that make up the blockchain platforms of each.

While the payout for confirming blocks may be significant, the costs in terms of energy consumption are as well. One estimate provides data indicating that the Bitcoin blockchain currently incurs an energy toll fast approaching 28 TWh per year, while the Ethereum blockchain consumes around a third of that at close to 10 TWh per year. These numbers roughly correspond to the electricity consumption of medium-sized countries like Ireland, Bahrain or Georgia.

Why Bitcoin/Ethereum mining is costly?

The reason behind the high cost of mining has to do with the mechanism through which miners create blocks. The mechanism known as Proof of Work (PoW) pits processors against difficult math problems whereby proving the correctness of the solution and verifying it is very easy. However, deriving that specific solution is computationally intensive and hence energy consuming. In a PoW blockchain, every transaction is part of some block and the creation of each block requires huge computational effort.

While a PoW based system may be reliable as far as maintaining consensus is concerned, it is unfortunately not energy efficient. To create a block all miners work simultaneously, flipping hashes to crunch out the right answer to the problem. The rule of the game is that only one can succeed, so a majority of the computing power that goes into solving each block is entirely wasted. The resulting energy cost poses an obstacle to the long term efficacy of mining with PoW.

Zilliqa’s Edge

Zilliqa believes that there is a better way to mine. Zilliqa’s alternative methodology makes use of the merits of PoW coupled with a practical Byzantine Fault Tolerant (pBFT) protocol. Miners use PoW to establish their identities on the Zilliqa blockchain. Once the identities have been established, miners get assigned to a consensus group wherein multiple rounds of PBFT consensus can be run. Performing one PoW in turn writes multiple blocks to the chain, and thus provides greater and guaranteed rewards.

In Zilliqa, roughly 12 hours of PoW needs to be performed each month (at the beginning of each epoch) — this is where the graphics card is at full load. During the rest of the time, the graphics card will be running in idle mode where minimal electricity is consumed. The estimated electricity cost of mining on Zilliqa is about USD 2.8/month in Singapore. In contrast, the cost of mining Ethereum is estimated to be about 9 times more at USD 26.25/month as the graphics card needs to be mining consistently for every new block.

Miners on Zilliqa will hence consume less energy which would make mining much less costly than other PoW based blockchains. And most importantly, Zilliqa mining will have less impact on the environment.

Icing on the cake

Zilliqa comes with two other benefits for its miners and users. First, the total energy cost per transaction will be constant as the network expands. Compare this with blockchains such as Ethereum or Bitcoin where the total energy cost per transaction increases with the network size. Second, we expect the transaction fees in Zilliqa to be much lower than those in Bitcoin or Ethereum.

Zilliqa employs a technique called sharding, whereby the mining network is divided into several consensus groups, each capable of processing transactions in parallel. The use of sharding ensures that the throughput increases roughly linearly with the network size. This has two immediate benefits. Below we discuss these two advantages in further detail.

  1. Constant mining cost per transaction: The linear scaling property in Zilliqa implies that the following quantity: mining cost for the network /#transactions processed is roughly constant. To see this, consider the case where the network doubles its size. Then both the total mining cost and the number of transactions processed double. As a result, their ratio remains constant. This is clearly not the case with Bitcoin or Ethereum as the number of transactions processed remains at 3–7 tx/s even as the network size grows. As a result, the cost of processing a transaction becomes larger and larger as the network expands.
  2. Low fees per transaction for users yet high aggregated fees for miners: Due to the limited throughput in popular blockchains, miners tend to prioritize processing transactions ladened with higher fees to cover their costs of operation. However, those mining on the Zilliqa blockchain will be incentivized simply by the magnitudes of scale with which transactions will be capable of being processed. Zilliqa believes that an increase in the transactions processed per second will eventually drive down the competition for transaction fees, and the resulting climate will cause miners to adjust their expectations.


With Zilliqa, cryptocurrency miners will have a cost effective choice when they boot up their rigs. Zilliqa will harness the security that comes from PoW and yet will reduce the associated energy footprint and make mining more profitable.

It is clear that more nodes in the network yield better decentralization. However, a larger network in existing blockchain designs leads to a larger wastage in terms of electricity consumed per transaction by the network. With its sharding technology, Zilliqa can make the most of a large network while keeping the cost of processing a transaction to a constant value.

We thank one of our slack members @Julian Sarcher who pointed out the fact that linear scaling in Zilliqa implies the energy cost per transaction is constant.

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