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Blockchain is good or bad for the environment?

At the dawn of the Industrial Revolution, humanity faced for the first time one of the greatest dilemmas of its history: are the benefits of technological progress worth the environmental damage it causes? This dilemma has finally become the cornerstone of our current age, as humanity has grown increasingly dependent on its latest technologies. Then, electricity and fossil fuels have reshaped the world we lived in, while today, in less than two decades, interconnection has changed the way we think and live forever.

Blockchain technology is among the most controversial inventions brought by the digital revolution. Its vast potential is still largely unused, with too much attention focused on mining crypto-currencies rather than using them for more … enlightened purposes. The immense amount of energy required to fuel the mine has made the blockchain the villain in the endless battle of technology against nature. However, some brilliant minds have come up with some curious and interesting solutions to use this technology for even a better planet. Let's take a look at some of the pros and cons of blockchain technology and its environmental impact. (To learn more about cryptocurrency, check that Cryptocurrencies is the true future of the world economy?)

Extraction and its implications

The mines generate a lot of electricity, actually equal to more than 20 European states combined. The mining network is powered by countless incredibly powerful computers that require a lot of energy to make their cryptographic efforts profitable. Electricity accounts for 90% of the cost of extracting cryptocene, and all of this "necessary brain power" continues to increase, to the point that today the encrypted extraction accounts for about 1% of global energy consumption. It sounds disturbing, is not it? Well, actually things are not as bad as they seem.

With the exception of China, almost 80% of this energy comes from renewable energy sources produced in "green factories" in the United States and Europe. Since blockchain is a new source of profit that can be claimed by virtually anyone, many "minor players" on the global scene have jumped on the bandwagon. The mining sector has created a race for innovation in the energy sector, with the reopening of old power plants in Africa, windmills everywhere, the salt water used to create energy and so on. Much of this green energy would be wasted if not used, since it is not possible to reduce wind, solar energy or waterfalls when energy demand is reduced. The energy that powers cryptocurrency mines comes largely from an excess of energy that many nations do not know how to discharge. We have just found a smart way to use something that would otherwise be wasted.

Efficient energy consumption

Efficient energy consumption is much more important than decreased energy consumption. Even if we ignore the additional burden on global energy grids caused by encryption, consumption levels will grow by 28 percent over the next two decades, no matter what. Humanity needs more energy, it's just that simple. Instead of demonizing this new 1% that made its appearance in 2017, we should focus on the remaining 99 percent, and understand how to produce it more efficiently and with reduced environmental impact.

And here blockchain and decentralization come to our rescue. A new energy network based on the blockchain known as Eloncity has been proposed as a futuristic and innovative solution to improve the efficiency of the system. The idea is to move from the uneconomic and cumbersome centralized energy supply to a much more efficient and intelligent energy storage system based on a network of intelligent micro-networks. The centralized feeding mode is affected by a substantial distribution of energy and service costs that largely exceed the cost of the energy itself. Small regional networks and local decentralized power plants have been tested around the world as a new solution to reconstruct the value of energy. Energy resources are optimized and dynamically integrated to maximize the use of resources, help consumers manage their electricity usage habits, and adjust their consumption based on changing prices. energy and store the surplus of energy.

Improve supply chain management

When the Volkswagen fuel emission scandal emerged in 2015, it was not the first nor the last time that corporate social responsibility attracted media attention. The health of entire countries and the environmental stability of large regions have been jeopardized by outbreaks of serious risks such as toxic insecticides present in food products in South Korea and Europe. Current supply chain management systems are not able to adequately monitor all phases of the supply chain to understand when the problem occurs and how to manage it. In addition, each supply chain management system is tailored to the needs of each company, without the flexibility and transparency that must be monitored by neutral third parties. (For more information on supply chain management, see Big Data: Logistically Speaking.)

What would happen if we could prevent it using IoT sensors and blockchain technology by monitoring the supply during each phase? Whether it's cars, medicine or textiles, TEMCO offers a new blockchain-based solution. Their proposed technology goes beyond supply chain management and transparency and brings to the table an innovative way to analyze supply chain efficiency and reduce alternative costs – both organizational and environmental. The use of intelligent contracts within all phases of the supply chain process will provide real-time information to consumers about the reliability of their management standards. All will be connected, from producers, warehouses, transport companies, distributors, to final consumers. In fact, more transparency is designed to make companies more responsible for the environmental impact of their choices and their carbon footprint. A similar solution is proposed by Waltonchain, which uses RFID tags (radiofrequency identification) to track products during each phase and store physical items on the chain.

Conclusion

Fortunately, blockchain technology seems to provide a positive solution to one of the long-standing problems of humanity: environmental damage. Not only is it much more sustainable than initially thought, but it has become a driving force for the use of healthier and more environmentally friendly energy sources. It can bring efficiency to the table, help human beings solve some of their problems with other new technologies and reduce their environmental impact.

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