Blockchain has great potential to improve transparency and sustainability in supply chains and natural resource management. But in order to collect the useful properties of blockchain and avoid high energy consumption, companies develop new eco-friendly solutions.
Initially, blockchain technology was the basis for cryptocurrency, and the financial sector was the first to test its capabilities. Blockchain is a decentralized database with data about transactions recorded in the blocks. A distinctive feature of the blockchain is that the data in the blocks cannot be changed, which plays a crucial role in the registration of contracts and rights.
The blockchain is the comprehensive solution
to improve the sustainability of global supply chains. It can prevent illegal activities by tracking the delivery of products to ensure that these goods have been produced without harming the environment or using slave labor.
Transparency is essential to influence consumer decisions, increase responsibility at all levels of the supply chain, and stimulate the emergence of new governance mechanisms. The blockchain is an ideal tool for decentralizing the management of natural resources - energy and water - and creating new mechanisms to attract investments to ensure low-carbon and sustainable economic growth.
The challenge with the most famous blockchains is that they require too much energy to work. Mining - the creation of new structures for the functioning of cryptocurrency platforms - requires a lot of energy, as well as special equipment to perform complex calculations and verify transactions. A significant part of the world's energy is still generated by fossil fuels, and mining plays its role in polluting the atmosphere.
The potential of blockchain is enormous. However, experts have to find a solution to reduce blockchain energy consumption. Some organizations are already working in this direction.
For example, the Ethereum Foundation
is now developing a new way to verify transactions that will reduce energy costs for each transaction by 99.95%.
There are variants of the blockchain architecture
that consume incommensurably less energy since other algorithms and their combinations are used to build new blocks. They do not require much computing power, buying video cards or ASIC-miners. For example, private blockchains
or mixed blockchains require a limited number of miners, and this is a more environmentally friendly and energy-efficient way to create a new block of transactions in the blockchain.
Also, many blockchain projects find a solution in the compensation of carbon dioxide emissions
. For example, such projects include reforestation, implementation of the best available technologies in the field of energy efficiency and renewable energy
sources, waste management
, reclamation of landfills, construction of wind farms, collection, and recycling of plastic. At the same time, many players in the cryptocurrency market
are trying to switch to the consumption of exclusively green energy. The Crypto Climate Accord
is aimed to reduce carbon dioxide emissions in the global crypto industry and achieve zero emissions by 2030.
The blockchain can improve global sustainability
Companies seek to reduce blockchain energy consumption
Green mining becomes a promising industry
Energy consumption can cease to be a problem when resource allocation is correct. For example, the Moonlite Project has developed a system of smart energy consumption based on artificial intelligence in Iceland. Moonlite plans to run on energy from renewable sources: hydro, wind, and geothermal.
The ghost town of Ocean Falls in Canada was facing the problem of overproduction of electricity. Only 30% of the energy produced was consumed by residents. So, miners organized an eco-friendly center called Ocean Falls Blockchain
The small town of Kazuno
in Japan uses hydroelectric power, wind power, and geothermal sources to produce electricity. Miner Garage took the opportunity to open a clean energy-based mining center in the city.
Chinese companies are striving to make mining more environmentally friendly also because of threats from the authorities. The Chinese government is concerned about the damage caused by mining, and blockchain companies and cryptocurrency miners that have consumed a large amount of energy are forced to stop their operation due to the recent ban on mining
In addition to increased energy consumption, mining requires cooling. Heat is inevitably produced by mining equipment and can harm the ecosystem. Companies are finding ways to prevent environmental impacts.
Canadians decided to use heat from ASIC miners. The average annual temperature in the province of Quebec is about 5°C, which affects the cost of heating. The Heatmine
company decided to kill two birds with one stone: to find a use for the excess heat from mining and reduce its cost.
heats water with heat from ASIC miners. First, the water is used for breeding fish and then used for watering plants in greenhouses. Another part of the energy goes to heating.
Green mining is becoming an increasingly promising direction for the development of the blockchain industry. The practice has shown that there are all opportunities to make cryptocurrency mining completely environmentally friendly shortly. The use of proper energy sources and the development of green methods of production will reduce its cost both for blockchain projects and the planet.
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