When we set out to build our blockchain infrastructure, we knew we had to find a balance between two key priorities: making sure the system stays open and secure while minimizing its environmental impact. To achieve this, we developed a unique approach that combines 95% Proof of Stake (PoS), 5% Proof of Work (PoW), and Recycled Proof of Work (rPoW). Let’s dive into how this system works and why it matters.

The environmental cost of blockchain

Blockchain technology can transform industries, especially agrifood, by providing transparency, security, and decentralization. But it comes with a major challenge - its environmental impact.  Traditional blockchain models, particularly those relying heavily on Proof of Work (PoW), consume massive amounts of energy. An amount so large that it’s comparable to the energy use of entire countries.

As a leading open public blockchain, we recognise our dual responsibility: providing optimal transparency and trust while protecting our network against known and emerging threats. But here’s the thing - this shouldn't come at the expense of the planet. That’s why we knew we had to find a better way, one that wouldn't make us choose between energy efficiency and security. 

What is blockchain and why do we need a consensus mechanism?

Before we dive into our solution, it’s important to understand what blockchain is. Blockchain is a type of record-keeping system. Imagine a digital book where every page (or "block") records transactions or important information (like ESG claims). Once a page is filled with data, it gets added to the end of the book, forming a "chain" of pages — hence the name "blockchain." But this book isn’t stored in just one place; instead, it’s copied and shared across a network of computers around the world. Because everyone has a copy, it’s very hard for anyone to tamper with the information.

But how do we ensure that the entire network is on the same page about what gets added to the blockchain? This is where a consensus mechanism comes into play.

It's the process that prevents false information from being recorded and ensures that only valid transactions are added to the blockchain. Two of the most common methods to achieve consensus are Proof of Work and Proof of Stake. They are both used to maintain security and integrity, but understanding their differences is key to recognising the importance of our approach.

Our approach

1. 95% Proof of Stake (PoS): The efficient backbone

The majority of our blockchain operations—95%—are powered by Proof of Stake (PoS). It is a protocol widely recognised as one of the most energy-efficient ways to run a blockchain. In PoS, instead of competing to solve complex puzzles (as in traditional Proof of Work), participants validate transactions based on the amount of cryptocurrency they hold and are willing to “stake.” This process is much less energy-intensive because it doesn’t require massive computational power. Think of it as a lottery where the more you stake, the higher your chances of being chosen to validate the next block.

However, this can lead to a situation where those who own the most coins could have more influence over the network - which can become a threat to decentralization. To mitigate this, we’ve incorporated additional layers of security and balance by using other methods like a small amount of Proof of Work and rPoW (recycled proof of work). 

Image source

2. 5% Proof of Work (PoW): Added security and fairness

While PoS is energy-efficient, we also recognize the unique benefits of Proof of Work (PoW). PoW is the original consensus mechanism used by Bitcoin, and it plays a crucial role in keeping blockchain networks secure and fair. In this system, computers in the network race to solve a complex mathematical puzzle. The first one to solve it gets the privilege of adding a new block to the blockchain and is rewarded with cryptocurrency. This process is very secure because solving the puzzle is difficult, making it tough for anyone to cheat. 

It's also an open system, meaning anyone can participate in validating and checking transactions. However, solving these puzzles requires a lot of computing power and electricity, just like playing a hard game over and over (plus, there can be a lot of competition for the rewards)

To address this, we’ve made the rewards for solving these puzzles very small (near Zero). This way, we keep the benefits of PoW—like security and fairness—without encouraging the high energy use that often comes with it. This approach helps us save energy while still keeping our network safe and open to everyone.

Image source

3. Recycled Proof of Work (rPoW): Maximizing use of resources

To boost efficiency, we’ve incorporated Recycled Proof of Work (rPoW). rPoW is an innovative way to use the existing computing power from the Litecoin (another form of cryptocurrency like Bitcoin) system to keep all the blockchains in our system secure. By reusing this power, we make sure that every blockchain in our ecosystem is protected equally, without increasing energy consumption.

At the centre of this system is the Komodo Notary Node Network, a decentralised way of managing security and enabling interoperability across different chains. Every ten minutes or so, we create secure copies (or backups) of blocks from different blockchains. These secure copies are then combined into the Komodo blockchain and locked onto the Litecoin network with just a single transaction.

This method is not only energy-efficient but also environmentally conscious. By reusing the energy that Litecoin has already used, we can secure many more transactions without adding to energy costs. This approach is far more efficient than securing each blockchain separately.

As of now, the rPoW system safeguards dozens of blockchains, collectively representing a market cap exceeding $1 billion.

4. Infrastructure

Because of the way we have developed our protocol, our network uses the same amount of energy as regular cloud services, like a typical website or online database. However, unlike those, we can enforce the right balance of security and decentralisation. Our data centres are focused on sustainability similar to the practices promoted by Google. 

The bottom line: A secure, open and sustainable blockchain

As technology continues to advance, it inevitably faces its share of growing pains. However, the more we understand and adapt, the better we can take advantage of it.

By combining 95% Proof of Stake, 5% Proof of Work, and Recycled Proof of Work, we’ve built a blockchain network that’s both secure, open and environmentally friendly. Here’s how:

1. Energy efficiency: Most of our operations run on Proof of Stake, which drastically reduces the energy required to maintain the blockchain.

2. Robust security: The small portion of Proof of Work ensures that our blockchain remains secure, fair and resistant to attacks.

3. Smart resource use: Recycled Proof of Work ensures that any energy we use is optimized, minimizing waste and maximizing efficiency.
   
   
   

Why this matters

We believe in creating technology that advances our capabilities and aligns with our commitment to a more sustainable world. Blockchain technology, in particular, holds transformative potential for the food supply chain. 

And by choosing Open Food Chain, you’re not just benefiting from a secure, open and reliable platform. You’re also supporting a vision of innovation that respects our planet. Together, we can build a future that’s both bright and green.