Electricity Consumption of a Distributed Consensus Algorithm

Abstract: The colossal electricity consumption of proof-of-work cryptocurrencies such as Bitcoin and Ethereum has caused critical examination of how consensus in blockchain-solutions is designed. Stellar is a decentralized, open-membership payment network built on blockchain technology, with the goal of enabling money to flow between banks, businesses and people across the global financial infrastructure, while minimizing latency and transaction fees. This study seeks to obtain a generalized estimate of the electricity consumption of the Stellar network, leading up with theory on the protocol's consensus algorithm employing federated voting in quorum systems. By dividing the electricity consumption of a single node into four core primitives and applying measurements on a basic validator node, an electricity consumption estimate for running a validator node is constructed. This is then extrapolated to the entire network to obtain a generalized estimate of the electricity required for a single transaction: 0.222 Wh, which turns out to be less than that of Bitcoin by a factor of 10^7, and similar to that of VISA. The results are followed by a discussion on the validity of said estimate, and areas of improvements for the method used, before concluding that by decoupling high electricity consumption from decentralized trust, Stellar provides a blockchain implementation that is not limited by electricity consumption to become an integral part of the global financial infrastructure.