The Case of Blockchain vs Nature; a Real Concern or a Glorified Illusion?

Time and time again, Bitcoin, or more specifically its Proof-of-Work (PoW) mechanism, has been chastised for being unsustainable. Currently, there are multiple methods to maintain a blockchain, but one of the most prominent and secure consensus mechanisms is PoW, and it also guarantees the highest amount of decentralization thus far. That said, PoW consensus, or crypto mining, has been criticized for two main reasons; its high energy consumption and its waste generation. Recent researchers have taken a closer look at these claims, and they have found some interesting results. ?

Energy Intensive or Energy Efficient??

This article will only target the financial aspect of blockchain, in other words, cryptocurrencies and their creation. Consequently, cryptocurrencies will be pitted against traditional banking as it is the backbone of the current financial systems of the world.??

Multiple entities have examined cryptocurrencies and traditional banking’s carbon footprint. Their findings were inconsistent with one another, but all of them arrived at the same conclusion; traditional banking’s footprint doubles that of Bitcoin as reported by Galaxy Digital. It is worth noting that the global market size of traditional banking is estimated at around USD $82.8 Trillion whereas the cryptocurrency’s peak was at USD $2.8 Trillion, so a colossal difference is to be expected. Also, after some number crunching, the throughput of traditional banking is astronomically larger than that of blockchain as it turns out that the former pushes through 15 times more money than the latter for the same amount of energy consumed. So, currently, traditional banking remains more energy efficient than PoW. That said, PoS still represents a significantly more sustainable alternative to both (99.5% less energy consumed than PoW).

Filling the Landfills?

It is common to hear that cryptocurrency mining generates massive amounts of waste in the form of broken hardware that can hardly be salvaged. In reality, this problem is not really specific to any field in particular. Indeed, the number one industry in terms of waste generation is the construction industry as it has accounted for an estimated 600 million tons of waste in the US alone. Further, plastic is also all the way at the top with an estimated 381 million tons of waste yearly. The textile industry is also guilty of large waste generation as an estimated 92 million tons of clothing waste ends up in landfills yearly. And finally, the gaming industry generates upwards of 50 million tons of electric waste yearly, when we take into account both computers and console gaming. How about Bitcoin? Well, the answer is a measly 30,700 tons of e-waste generated per year. So, the argument that mining floods landfills holds little to no weight.??

Blockchain towards a Greener Future?

As we have seen thus far, blockchain’s impact on the environment is not nearly as severe as it was originally thought to be. That said, there are even more positives that may yet arise from this technology, and it can be placed at the forefront of the fight against greenhouse effects and other detrimental pollution.??

First and foremost, as unfortunate as this reality is, some unscrupulous individuals take advantage of charity, and they create foundations meant to help the environment but end up repurposing funds from contributors. Blockchain can be used in order to verify the transactions that go in and out of a charity’s account. For example, many foundations accept donations to plant trees around the world, this whole process can be tracked with proper blockchain integration, guaranteeing that donors are contributing to the betterment of the ecosystem.

Another example of blockchain being utilized in the fight against pollution is CERN’s partnership with ClimateTrade who have created a marketplace on the Algorand blockchain to invest in proven green programs. Thus, they can reward those who are exerting efforts to achieve a sustainable future all the while reducing emissions as Algorand uses PoS consensus.??

Furthermore, blockchain can significantly reduce the waste generated through poor supply-chain management. Foodtrax is a dApp that aims to do just that in the food industry. These are but a few methods to utilize blockchain to help reduce environmental hazards, and a lot more creative uses of the technology are available.??

Conclusion?

All in all, blockchain and cryptocurrencies have been under fire for their detrimental effects on the environment, but it is becoming clear that these claims do not paint a complete picture. Further, power generation as a field is undergoing major revolutions, and the scientific community is on the verge of a breakthrough in nuclear fusion. As it stands, nuclear power is the safest and cleanest option currently available in the world, and as it gains more adoption despite the negative political stigma, blockchain’s carbon footprint would become negligible.??