If you’ve paid any attention to blockchain news in the past year, you know it has tremendous potential to impact the world positively. Although cryptocurrency can enable democratized access to services such as medical care, financial services, and energy, it’s also responsible for immense energy consumption and potential climate impact.
Cryptocurrency and blockchain have the power to make positive change and finding new energy sources for perpetuating their usefulness is a worthwhile endeavor.
Exact figures and statistics remain unknown, but, a recent New York Times article was able to estimate that “the computer power needed to create a single digital token consumes at least as much electricity as the average American household burns through in two years, according to figures from Morgan Stanley and Alex de Vries, an economist who tracks energy use in the industry.”
The article also describes how the computer network utilized to power the bitcoin network consumes as much energy daily as some medium-sized countries! Alex de Vries, an economist tracking energy use in the industry, estimates that each individual bitcoin transaction “currently requires 80,000 times more electricity to process than a Visa credit card transaction.”
Founder of Ethereum, Vitalik Buterin, has voiced concern about the climate impact of his own technology and is now aiming for less-intensive network practices.
“I would personally feel very unhappy if my main contribution to the world was adding Cyprus’s worth of electricity consumption to global warming,” he elaborated.
As the industry continues to expand, each individual transaction on the blockchain becomes increasingly energy-intensive to compute. The mining process makes cryptocurrency’s foundation energy-intensive and environmentally unsustainable. According to the bitcoin energy consumption index, the digital currency already consumes 0.15% of the world’s energy, exceeding the electricity consumption of Ireland.
According to the 2017 US Energy Information Association report, global energy demand is projected to grow by 28% by 2040 even without factoring in the impact of mining cryptocurrency.
Furthermore, the International Energy Agency estimates that in 2017, 17% of the world’s population was without access to electricity, making cryptocurrency’s consumption seem decadent and excessive.
Can the world really risk undermining our collective carbon-reduction efforts for an industry that is considered speculative and experimental? Especially considering the present rates of global warming and the difficulty transitioning to clean energy, we need to make cryptocurrency go green sooner than later. But how?
Blockchain computation and the requisite server farms are distributed versus centralized.
Since you can mine cryptocurrency anywhere, it is most profitable where energy is cheapest. We should push for cryptocurrency regulation to encourage not the cheapest, but, the cleanest energy.
Other companies have taken similar measures like the Facebook hydroelectric data center in the Arctic, where the location allows for large fans to pull in outside air to naturally cool the thousands of servers inside. A dozen hydro-electric plants also operate on nearby rivers to provide a renewable power source. The resulting system is 10% more efficient and uses 40% less power than traditional data centers.
Bitcoin expert, Andreas Antonopoulos, has suggested surplus energy from traditional renewable-energy plants could be harnessed to power blockchain computation.
offer clean-energy sources to the cryptocurrency enterprise and another source of potential revenue.
This would effectively make blockchain computing a renewable subsidy. But there’s a catch: “one of the fundamental issues, and potentially environmental costs, of wind and solar technologies is the fact of their intermittency—they require energy storage in some form or another,” says clean energy expert Caitlin Sparks.
One alternative to renewable-energy plants for powering cryptocurrency activity could be waste-to-energy technologies.
Globally, we generate 1.3 billion tons of waste each year with an estimated 4 billion tons by 2100, according to Ede Ijjasz-Vasquez, a senior director with the World Bank. It is possible already to convert waste, whether agricultural or municipal waste, into energy or fuel.
Several experiments with the technology have already been launched such as anaerobic digestion, pyrolysis, and gasification. “It’s an obvious triple win, solving the waste, energy, and climate crises in one package,” Sparks confirms.
Though blockchain and cryptocurrency have the power to revolutionize how we use money and other record transactions, we must remain mindful going forward in how we power this potential revolution.
(For more commentary on cryptocurrency and the potential of blockchain, read Meet Bitcoin Super Hero, J. Christopher Giancarlo.)