Wildfires, Energy Crises, and the End of Utility-Free Blockchains: Why Sustainable Solutions Matter
Canada’s 2023 wildfires are a vivid illustration of the effects of climate change and spell trouble for utility-free blockchains’ ability to access the energy they require to process transactions.
Carbon released by Canada’s wildfires—exacerbated by years of drought and record heat waves—exceeded the total output of several countries. The fires were the product of carbon already pumped into the atmosphere, underscoring the need to reduce future emissions.
Installation of renewable energy facilities is at an all-time high in the U.S. with nearly all new energy capacity consisting of solar, battery storage, wind and nuclear projects. Twelve gigawatts of solar projects were built in H1 2024.
That’s a drop in the bucket compared to China, which is deploying around 10 gigawatts of new wind/solar capacity every two weeks.
But China is still building coal-fired electricity plants and America is producing record amounts of crude oil—and fracking requires huge amounts of fresh water, which is also in short supply—complicating both nations’ climate goals.
Without significant reductions in fossil fuel consumption and corresponding increases in clean power generation, there will come a point when tough choices must be made about what we need to keep running vs. the useless stuff we can switch off with minimal impact.
Artificial intelligence (AI) has taken on national defense implications, making it an arms race no country wishes to lose, so AI data centers will continue to be allocated scarce energy resources.
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But block reward mining for utility-free blockchains like BTC? Pull the plug. Hodlers will holler, but their voices will be drowned out by the hundreds of millions who have more pressing needs, like keeping their homes heated/cooled/lit/etc.
Bernstein analysts recently declared that institutional investors’ interest in BTC block reward miners is based on the expectation that these operations will eventually convert to AI data centers, which is not only more profitable but has a more secure future.
BTC mining isn’t profitable because its artificially constrained bandwidth prevents it from handling a high volume of transactions, lowering transaction fee revenue. This limitation also prevents BTC from being anything more than a speculative token generator.
Utility-focused blockchains—those that can scale to encompass projects ranging from remittances to supply chain tracking to ensuring accurate data for training AI models—will have the edge over BTC mining operations as the energy situation worsens.
All countries need to ramp up renewal energy infrastructure. We need a new global Marshall Plan or the plan that led to the development of the U.S. interstate highway system (remember kids, the internet was once called the ‘information superhighway’).
The effects of climate change will get worse before they get better. The same could be said for BTC mining. Tough times demand tough choices. Invest accordingly.
To learn more about enterprise blockchain utility and the future of the internet, there’s no better place than the London Blockchain Conference. Next year’s event promises to be the biggest and best to date. Don’t miss it.
Sports Trader
2 个月Very informative