Minding Modern Mining: An Analysis of the Energy-Intensiveness of Proof-of-Work Consensus Mechanism and its Violation Against the Right to a Balanced & Healthful Ecology

Abstract

In the recent Chainalysis Global Crypto Adoption Index 2022, the Philippines ranked second as the leading adopter of cryptocurrency worldwide. The emergence and development of cryptocurrency in the Philippines have resulted in an increase in cryptocurrency mining. This mining process validates crypto transactions through a blockchain by employing a Proof-of-Work consensus mechanism. This mechanism requires significant computational power and energy consumption to solve mathematical algorithms or complex puzzles, generating coins with specific values that can be exchanged for legal tender. Consequently, the coal-based Proof-of-Work consensus mechanism leads to the burning of more fossil fuels to generate electricity, thereby increasing atmospheric greenhouse emissions and exacerbating the current climate crisis.

Considering a number of studies and statistics on the impact of energy-intensiveness of Proof-of-Work Consensus Mechanism in 2018 to 2020 akin to climate change, therefore a sense of urgency then to conduct this study. This paper aims to (1) to prove that the Proof-of-Work consensus mechanism, in relation to cryptocurrency mining, is energy-intensive and contributes to the worsening climate and human rights crisis; and (2) to show that the process of Proof-of Work consensus mechanism and its impacts on ecology violates the right to a balanced and healthful ecology under the 1987 Constitution, alongside international environmental commitments, principles, and legal frameworks.

A method triangulation was used in this study, viz, case study, content analysis and comparative approach. To prove the insufficiency of current laws and policies, the gathered information and materials were analyzed to bridge the literature gap by examining provisions governing environmental laws, constitutional law, human rights law, and technology. The findings then indicate that: (1) among all the consensus mechanisms, Proof-of-Work is the most energy-intensive; the process itself and its impact violate the right to a balanced and healthy ecology under the 1987 Constitution; and (2) there are insufficient frameworks in the Philippines addressing the ecological impacts of the Proof-of-Work consensus mechanism. Therefore, legislative measures are recommended to shift to a proof-of-stake consensus mechanism, a greener and more energy-efficient method for cryptocurrency mining.