When the symbolic mania for unavailability broke out at the beginning of the year, many climate-conscious artists spoke out against Ethereum’s energy consumption. In May, Elon Musk later derailed Bitcoin (BTC), claiming that the energy consumed by Bitcoin was the reason Tesla pulled back on its plans to accept BTC as payment for its electric cars.
Both events sparked a wave of debate inside and outside the blockchain community. The arguments focus on two areas in particular: Bitcoin’s energy consumption and its dependence on fossil fuels harm the climate compared to renewable energies and, secondly, the advantages of one blockchain platform over another – often with a focus on consensus models and the promotion of proof- of -use as a greener option.
Each argument is filled with arguments from both sides. If the IPCC is right, drastic measures cannot be overstated to remedy some of the damage. To do this, the focus must be on the positive applications of the blockchain.
Related: Expert Answer: How is Elon Musk affecting the crypto space?
Use the power of the blockchain
An important aspect of the importance of the blockchain is its ability to generate huge amounts of otherwise wasted energy – aggregated and reactivated for additional use. Wasted community resources are in line with the principles of a circular economy and help eradicate a throwaway culture and recycle existing resources as much as possible. And computing power is an example.
Whether on a private laptop or a commercial server outside of office hours, there is a huge amount of wasted computing power lying around on the hardware, especially when it is not in use. At the same time, there is a tremendous need for computing power that is being met by companies like Amazon Web Services, who are constantly building new data centers to meet this need.
Related: No, Musk, don’t blame Bitcoin for dirty energy – the problem lies deeper
Blockchain networks, like Cudos’ decentralized cloud computing platform, divert redundant computing power from inactive computers and make better use of it, reducing waste. Other networks like Filecoin or Bluzelle focus on hosting services, but the principle remains the same.
Power grid hierarchy
Other projects use the concept to decentralize the energy network. Brooklyn Microgrid is a hyperlocal initiative that enables solar “consumers” (producers and consumers) to sell their surplus by turning it into a microgrid for other participants to buy. This is the kind of “Act local, think global” project that proves that anything is possible when you’re ready to start from scratch.
In Vienna, the government previously funded an initiative that enables citizens to earn token-based rewards for identifying sources of waste heat that can be returned to the energy grid. A slightly different twist on the same decentralized theme, but with the same principles that use blockchain technology to greater benefit.
Trustworthy green evidence
Blockchain technology also plays a fundamental role in bringing transparency and accountability to governments and businesses about their role in combating climate change. Transparency in environmental, social and governance (ESG) matters is now high on the agenda of CFOs after the EU regulations on sustainable financial disclosure were issued in September this year. In the broadest sense, the regulation stipulates that banks and financial institutions categorize their investment products according to their green references.
Using blockchain to store and verify this information increases visibility and confidence that investors can place in products that improve ESG credentials. It’s easy to imagine a future where consumers and businesses can make decisions based on algorithmic ESG ratings of any type of institution on the blockchain.
Related: How will blockchain technology help fight climate change? Experts answer
It will no longer be enough to be the “least worst” blockchain platform, and the community will no longer be helpless in the face of a climate emergency. It has powerful technology as well as some of the best, smartest, and most innovative thought leaders in the world.
Obviously, blockchain technology can be applied to a variety of positive use cases that bring more benefits to a green cause than it takes away. And blockchain technology argues more strongly for its applications in environmental protection than against it.
Matt Hawkins is the founder and CEO of Cudo Ventures, a global provider of cloud computing and monetization software, and Cudos, a decentralized cloud computing network that bridges the gap between the cloud and blockchain by recycling the world’s wasted computing power. He previously founded C4L in 2000, acquired in 2016 and is one of the UK’s fastest data center ISPs, supporting around 1% of UK internet infrastructure and winning numerous fast growing awards including: The Sunday Times Tech Track 100, UK Deloitte Technology Fast 50 and Technology Fast 500 EMEA and many more.