Bitcoin (Bitcoin) Is often used to criticize all blockchain-based projects. This is understandable, because Bitcoin is the first project to use the blockchain, arguably the most well-known and largest cryptocurrency by market value.
In the first half of this article, I will use Bitcoin as a proxy for all blockchain-based projects, because most people associate blockchain with Bitcoin. Since Bitcoin uses the oldest blockchain technology, for most new blockchain-based projects, any positive aspects of Bitcoin’s environment will be double correct.
Blockchain energy consumption
Bitcoin is under attack due to high energy consumption.The headlines point out that Bitcoin’s electricity consumption is Comparable to the total consumption of a country It is a popular criticism. Comparisons are useful, but they can have a deceptive framing effect. For example, the most frequently cited statistics in these compelling headlines are from the Cambridge Centre for Alternative Finance (CCAF).The same organization integral The transmission and distribution losses in the United States can power the entire Bitcoin network 2.2 times.Electronic devices always online in the U.S. Consume 12.1 times more energy than the Bitcoin network.
Therefore, the Bitcoin network uses as much electricity as a small country, or far less than a small part of the US energy budget. is it a lot? It depends on how you look at it.
Another criticism that is often used is that Bitcoin’s electricity consumption has grown so fast that only Bitcoin emits May contribute to global warming Above 2°C, or Consume All energy in the world by 2020. The latter did not happen. why? First, like most network-based technologies, Bitcoin follows the adoption curve defined by the innovation diffusion theory-the “S-curve”.
The explosive exponential growth in the first half of the curve slows down significantly in the second half. Second, even if Bitcoin’s growth slows, the huge and predictable improvements in computer efficiency will continue to reduce computing energy costs. Third, such predictions do not take into account Bitcoin’s evolving energy mix.
Blockchain energy mix
Almost all energy consumed by blockchain projects comes from electricity used by computers protecting the network. Bitcoin calls these “miners,” but newer blockchain projects can use more efficient “validators.” Electricity comes from many different sources, such as coal, natural gas, and renewable energy sources such as solar and hydropower. These sources will produce very different levels of carbon emissions, which largely determines their environmental impact.The two most prominent estimates of Bitcoin’s renewable energy range from 39% in this Report 74% in this area Report. Any one of these estimates is “cleaner” than the US energy mix, which Yes Only 12% comes from renewable energy sources.
There is evidence that Bitcoin’s public scrutiny is likely to ensure that energy from renewable sources will only Increase future.
Blockchain is worth
Bitcoin’s energy consumption and composition are not perfect, nor as terrible as often reported. In conversations about Bitcoin’s energy use, what is often overlooked is whether Bitcoin’s energy use is worthwhile. Many industries require energy or generate a lot of waste, but most people think that the environmental cost is worth it.Agriculture requires a lot of fossil fuels to be used for fertilizers and to power field equipment, not to mention Production Harmful runoff. However, despite the negative environmental impact, we recognize the overriding importance of growing food. We do not abandon agriculture, but strive to improve the agricultural environment.
Whether to allow the 1.7 billion unbanked people to be able to get Financial inclusion or supply As an alternative to predatory international money transfer services, I seem to know that Bitcoin is worth using energy. More clearly, the enterprise blockchain is an absolute public product.
Newer alternative blockchain technology use At least 99.95% less energy than the old one. Enterprise blockchain can use less energy because it can be customized for specific use cases. In addition to significantly reducing energy use, enterprise blockchain also helps organizations achieve sustainable development goals.
Blockchain is a key driver of renewable energy
Solar and wind energy Yes It is now cheaper than fossil fuels such as coal and natural gas. Solar and wind energy are now comparable to geothermal and hydroelectric power generation. Despite solving the cost issue, there are still several issues with renewable energy that hinder large-scale adoption. Geothermal and hydropower are restricted by geography. Solar, wind, and, to a lesser extent, hydroelectric power generation suffers from intermittent and grid congestion. Intermittent means that they are currently too unreliable. There is no sun at night, sometimes the wind stops, and there are rainy and dry seasons. Congestion on the grid is similar to car traffic. Due to geographical constraints, renewable energy sources are usually built in rural areas. However, densely populated towns require most of the energy. Just like a car in a traffic jam, electricity is delayed to reach its destination.
There are solutions, such as building battery storage and increasing transmission capacity, but these are expensive infrastructure projects. This is where Bitcoin and blockchain can help. Unlike Bitcoin miners, other blockchain projects can be built anywhere. They are profitable companies, so they can basically subsidize the construction of renewable infrastructure by always using the excess energy produced.
Another promising energy technology that is very suitable for blockchain Yes Person-to-person (P2P) electricity trading. These energy sharing programs provide power suppliers and consumers with opportunities to conduct energy transactions without the need for existing third-party intermediaries, and at the same time increase the level of renewable energy. Similar to renewable infrastructure, blockchain-based projects will stimulate the development of P2P energy networks.
Blockchain enables material procurement and provenance
Consumer demand for more ethically sourced products is steadily increasing. Companies must prove that their products are produced in a way that protects the environment and public health, and that they are ethical.Consumers are cautious about green bleaching and have to rely on About the information provided by the company. Blockchain-based projects are already changing this dynamic.
Everledger has created tools to increase consumers and businesses’ insight into the source of a given object. By combining blockchain, artificial intelligence, and the Internet of Things, Everledger digitally simplifies the compliance process and allows companies to show the true origin of their products.
Transparency and traceability are critical to fostering consumer trust in the food supply chain. Supermarket giant Carrefour and the world’s largest beer manufacturer AB InBev have collaborated with enterprise blockchain developer SettleMint to provide a digital traceability solution that uses dynamic QR codes attached to products during the packaging process.
Green financing is the use of loans to support sustainable companies and provide funds for their projects and investments.It is essential to close the USD 2.5 trillion annual SDG funding gap. This is estimated Become bigger. A good example of green financing is the green bond (GB) market. According to the Climate Bonds Initiative, US$269.5 billion of GB release In 2020.
Unfortunately, GB is not without problems, such as confirming that sustainability indicators are true, or that funds are used to support sustainability. Blockchain can store these data immutably, so the project can be verified to meet sustainability requirements. Blockchain can also help in other ways, such as tokenization.
Oi Yee Choo, Chief Commercial Officer of iSTOX, Singapore Digital Stock Exchange, Say In this interview: “Even in a market where there is a high demand for green bonds due to ESG consideration by investors, due to the small subscription scale, tokenization helps investors diversify their investment portfolios on different bonds. “
In terms of environmental sustainability, the blockchain industry is far from ideal at the moment. However, if it maintains its current development trajectory, the blockchain industry will not only become a model of environmental sustainability, but also an enabler.
The views, thoughts and opinions expressed here are only those of the author, and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Matthew Van Nickelke He is the co-founder and CEO of SettleMint, a low-code platform for enterprise blockchain development and Databroker, a decentralized data market. He holds an honours degree from the University of Western Ontario, Canada, and an international MBA degree from the Vlerick School of Business in Belgium. Matthew has been committed to financial technology innovation since 2006.