As with any new technology, Bitcoin has unintended consequences which could have a negative environmental impact.
Bitcoin miners are continually adding new “blocks” or transactions to the network – hence why it’s called blockchain. This process uses a lot of energy because of the computing power required. As a distributed system, Bitcoin’s energy use isn’t confined to a single data center, but, rather, distributed through every miner.
The Guardian’s Alex Hern recently observed Bitcoin uses as much CO2 per year as 1 million transatlantic flights!
As is, Digiconomist reports Bitcoin mining consumes more energy than the entire country of Bangladesh.
According to Digiconomist, the Bitcoin network is primarily powered by coal plants in China, due to their low costs, meaning Bitcoin mining is also taking advantage of lenient environmental regulation and, thereby, polluting at a very high level.
One solution is for countries to produce the energy required of Bitcoin mining through more green methods like wind and solar. Another solution is for a renewable energy company to contract with Bitcoin to provide all the energy its miners consume.
Blockchain can “go green” in various innovative ways.
Solar Bankers is a solar energy company using a blockchain technology called Skycoin to promote clean energy. Skycoin is an open-source blockchain used to create individualized cryptocurrency. Solar Bankers used this to create SunCoin, “the first peer-to-peer energy trading platform.” Users can generate solar energy in their homes and then use SunCoin to essentially trade solar energy credits. Rather than allow excess solar power to go to the power company, you can sell it to someone else using SunCoin.
Like cryptocurrency itself, Suncoin technology is disruptive and decentralized because it cuts out power companies. Solar Bankers was noted as having said, “The solar energy market is dominated by large utility companies that buy solar energy at a low price and sell it through the electricity grid at a much higher price, securing huge profits at the expense of the end consumers and small-scale solar producers.”
Utility companies have already proven to fear any rivalry; they’ve been driving up prices of solar credit through net metering agreements. Furthermore, some customers unknowingly fund anti-clean energy groups because utility companies financially support their lobbying efforts for obvious, self-serving reasons.
SunCoin blockchain uses an app which allows users to monitor their electricity consumption.
Solar Bankers will funnel users’ excess power generated to “community microgrids” which are series of nodes storing and transferring solar energy. Smart meters then monitor these microgrids and communicate with users’ apps. Recently, Solar Bankers initiated a pilot program in Turkey where the installation of such a microgrid is in the works.
All SunCoin transactions are recorded on Skycoin’s Skyledger, a blockchain platform working without the power-burning system of cryptocurrency mining. Instead of plying miners with coin incentives, Skyledger distributes cryptocurrency to people who operate nodes in a mesh network. In exchange for cryptocurrency, a user houses an antenna or other device which communicates with other members on the network. The user’s computer operates as a modem without having to consume any more power than it normally would to get online. With SunCoin, users will generate power through solar devices resulting in a circular, sustainable network. Skycoin users are participating in a free, environmentally friendly Internet called Skywire which could potentially replace the current Internet.
Another sustainable use for blockchain technology is exhibited in Moyee Coffee which uses the digital ledger system to monitor supply chain transactions for coffee beans.
Hopefully, this will eventually inspire supply chain transparency for all sorts of businesses across various industries. The agricultural industry in particular is notorious for unfair labor and environmental practices worldwide. By using blockchain to document every step of a product’s supply life from farm to market, Moyee can guarantee the quality and sustainability of its product. Fittingly enough, Moyee Coffee uses a blockchain solution called FairChain.
Although right now blockchain enthusiasts have already witnessed some of the environmentally harmful effects Bitcoin and other types of cryptocurrency can create, blockchain technology can promote sustainability, whether through innovative uses like Moyee Coffee or by improving regulation so renewable energy sources are more widely adopted. It will be exciting to see how Bitcoin news and blockchain news in general take shape as users and policy makers demand an effort to go green.