There is no further news that the United States has renewed its commitment to reducing carbon emissions and playing an active role in the work to normalize environmentally friendly practices on the global stage. This radical shift in policy-making will catalyze the adoption and creation of stricter approaches to climate change. There is no doubt that the United States’ involvement in the climate change talks points to the seriousness of this crisis and the tough decisions countries can make to achieve the environmental goals set in Paris, known as the Paris Agreement.
At the heart of this political and economic change is the growing influence of innovative technologies to ensure a sustainable environment. You expect that innovation will positively contribute to this movement. It makes no sense to invest trillions of dollars in the development of new technology without considering the long-term trend towards achieving the 2030 sustainability goals, especially with regard to environmental sustainability. Therefore, it is important to analyze the possibility of blockchain from a critical point of view for environmentalists.
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Is there a place for blockchain in an environmentally conscious society?
Blockchain has become one of the most respected technologies in the last two years due to the growing acceptance of digital assets. The ability to create a new system of monetary services pushed technology into the sacred realm of innovation that is powerful enough to drive the fourth industrial revolution. Currently, the most widely used use of blockchain technology – Bitcoin (BTC) – tends to attract unwanted publicity about its role in climate change.
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Bitcoin uses a process called mining to mint new coins. This requires miners to solve very complex problems using modern computers to create new blocks and receive new coins as a reward. It goes without saying that this mechanism plays a key role in protecting the network from tampering and dual use. Since Bitcoin relies on a decentralized approach to consensus, it is understandable that it sought to replace brokers with a contract verification system called Proof of Work. Here, an obligation to distribute computing power over the network increases the chances of becoming a stakeholder in an instant.
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Although this approach is commendable, it is not environmentally friendly. The enormous amount of energy required to maintain the Bitcoin network has been thoroughly tested. The carbon footprint of the global Bitcoin mining industry is comparable to New Zealand. Another negative environmental factor appeared in Proof of Work in 2019, when researchers found that Bitcoin mining accounted for 0.2% of the world’s electricity.
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How can blockchain get greener?
It is noteworthy that the growing and booming blockchain industry has developed many other consensus models. These options are intended to address the limitations of the evidence on the work mechanism. Thus, they are more in line with the environmental movement. Some of the models that have been discussed over the years are evidence of effort, practical Byzantine fault resistance, fire resistance and weight resistance. Instead of requiring miners to solve problems, these models choose the least energy-intensive tasks to secure blockchain networks and verify transactions.
For example, PoS elevates participants who are financially committed to the ecosystem to the role of auditors. Here, the algorithm selects validators from individuals or legal entities that have blocked the required number of coins in the blockchain.
Instead, evidence of weight weighs participants ‘resources or reputation when choosing auditors, while evidence of incineration assesses participants’ ability to copy coins – sending coins to an address that cannot be returned. In particular, all of these models deviate from the PoW approach to power consumption and auditors selected on the basis of their commitment to network health.
Blockchain must take green measures
Despite the downturn caused by the energy consumed by mining cryptocurrencies, the reports document the rapid transition of miners from unsustainable energy sources to renewable alternatives. Coinshares reported that the energy balance of Bitcoin mining reached 74.1% in 2019 due to the concentration of the mining sector in countries or regions with cheap water powered by water.