It is no secret that the mining of Bitcoin wastes a huge amount of energy required for computers to solve mathematical problems. Over time, mining is becoming increasingly difficult, and accordingly, the computational power necessary for this grows together with the volume of energy. At the moment, only one Bitcoin transaction spends enough energy to power nearly 32 households in the U.S. during the day. Annually, Bitcoin consumes 61.56 terawatt hours. This energy is enough to meet the annual energy needs of the whole of Switzerland. Thus, the carbon footprint of Bitcoin is about 30,162 kilotons.
Is It Possible to Minimize Damage to the Environment?
Cryptocurrency miners rarely think about environmental problems, preferring to base themselves in countries with the lowest possible production costs, like China, where cheap electricity is produced by coal stations, which leads to a deterioration of the overall carbon footprint of Bitcoin. Do not forget that Bitcoin is the very first, but by no means the only cryptocurrency in the world. And it is simply impossible to calculate how much energy is wasted on the mining of altcoins!
Nevertheless, some mining corporations are still thinking about reducing their carbon footprint. For example, Qarnot is building equipment that redistributes the thermal energy generated by computers to heat homes and offices. This technology is suitable only for countries with a cold climate, however, since, in hot areas, the heat generated will require additional energy to cool the building. In general, the question of the use of heat generated by the crypto industry has been raised for a long time. The application and diversity of the proposed solutions are impressive.
According to experts, if mining does not find alternative operating methods, it can turn into a serious threat to the environment, comparable with the production capacities of factories. "Due to the fact that technologies do not stand still, I think that in the near future an alternative method of extracting energy for Bitcoin production will reduce the impact on the environment. Examples of alternative energy and ways of extracting it already exist. There are more emerging with each passing day, and they are all becoming increasingly effective. I think that this trend will also be introduced into mining," Oleg Kuznetsov, the creator of the VKontakte community EcoSphere: Ecology + Technology = Life, shared his opinion with DeCenter.
How Can Blockchain Help the Environment?
On the other hand, if we consider blockchain separately from mining, then it can already become an indispensable tool in the matter of redistributing existing energy. Since conventional power systems are centralized, they can be inefficient and create an unused surplus, while in some parts of the world affected by natural disasters or poverty, power outages can leave people without access to the most basic resources. A power system based on a peer to peer blockchain can reduce the need to transmit electricity over long distances, thereby reducing losses inevitably occurring during transportation. Some companies are already actively developing in this area.
For example, Transactive Grid, a company founded by ConsenSys and LO3 Energy, is working on SunContract, a peer to peer trading platform for renewable energy sources.
Moreover, blockchain in general, and cryptocurrencies in particular, can serve as an incentive for people to participate in material recycling through recirculation. Recirculation is a program that provides participants with remuneration in the form of tokens in return for recycling cans, bottles, and plastic containers. Such installations are already operating in different parts of the world.
Social Plastic is a project that turns plastic into currency and creates collection centers in third world countries. By leaving garbage at one of these points, people can use various services like phone chargers or get free food. At the moment, they are working on a blockchain application that will allow people to exchange plastic for tokens.
Blockchain can help to track the logistics of a product from the point of its production to the consumer's receipt. When tracking food, the customer will be able to buy exclusively local products grown nearby. This will reduce emissions of carbon dioxide, as the distance from the manufacturer to the store shelf will be reduced multifold.
The Foodtrax project, developed by the Blockchain Development Company, is designed to track the full food supply chain.
The total impact of each product on the environment is difficult to determine, and its carbon footprint does not affect the price at all. It is therefore unprofitable for companies and consumers to produce and buy products with a low carbon footprint.
If using blockchain can create a system that helps in tracking and controlling the carbon footprint of each product and making access to this information as transparent as possible, it may help in the formation of product prices in view of the carbon tax. Therefore, manufacturers will have an incentive to reduce the negative impact of their production on the environment, and buyers will purchase goods that are safe for the environment.
It is difficult to say how the relationship between the environmental and crypto industry will develop in the future, but it is already clear that blockchain it is a tool that people can use to both destroy the environment and help rid it of pollution and reduce waste of resources.