The Environmental Impact of Blockchain

Recently, much attention has been paid to blockchain technology due to its effect on the environment, especially in applications whose functions require much energy, such as cryptocurrency mining. The majority of the work behind the blockchain networks, including but not limited to Bitcoin, is driven by a consensus mechanism through huge utilization of computational resources, which solves complex mathematical problems and validates the transactions, thus great amounts of energy are consumed, producing a huge carbon footprint. For instance, the mining of Bitcoins has been compared to the extent of energy consumption of entire countries, straining worldwide power grids, and contributing to green gas emissions.

While demand for cryptocurrency and decentralized applications continues to increase, so does environmental damage, and debates about sustainable solutions are in increasing demand. Luckily, some blockchain networks are already migrating to more environmentally friendly consensus mechanisms, such as Proof-of-Stake. Unlike PoW, however, PoS does not require intensive computation; hence, it uses up to 99% less energy than PoW. A good example is Ethereum, which just recently changed its consensus algorithm to PoS; thus, this network became way greener.

Other projects take to carbon offsetting, green energy supplies, and energy-efficient blockchain designs to mitigate environmental damage. Bright as these new advances might be, large-scale use of such eco-friendly practices is yet to be observed. While blockchain technology is currently under development, consideration of the ecological impact caused by the technology in the future will have to be weighed against the technological advancement itself so that blockchain presents a viable solution in a sustainable future.

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~ Nesaty