{"id":196895,"date":"2022-07-22T19:34:28","date_gmt":"2022-07-22T14:04:28","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=196895"},"modified":"2022-07-22T19:34:28","modified_gmt":"2022-07-22T14:04:28","slug":"blockchains-can-cut-both-ways-in-their-impact-on-global-warming","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/blockchains-can-cut-both-ways-in-their-impact-on-global-warming\/","title":{"rendered":"Blockchains can cut both ways in their impact on global warming"},"content":{"rendered":"\n

Source<\/span><\/b>: The post is based on an article \u201cBlockchains can cut both ways in their impact on global warming\u201d<\/strong> published in the Live Mint<\/strong> on 21<\/span>st<\/span> July 2022.<\/span>\u00a0<\/span><\/p>\n

Syllabus<\/span><\/b>: GS 3 Environment and Ecology<\/span>\u00a0<\/span><\/p>\n

Relevance<\/span><\/b>: Role of Blockchain in the global warming<\/span>\u00a0<\/span><\/p>\n

News<\/span><\/b>: Recently, the Centre for Alternative Finance at the University of Cambridge has released a report consisting of the<\/span> Cambridge Bitcoin Electricity Consumption Index. <\/span><\/b>It highlights the role of <\/span>cryptocurrencies <\/span><\/b>behind global warming in the Anthropocene era.<\/span>\u00a0<\/span><\/p>\n

What are the purported reasons for the warming?<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/h5>\n

The top causes of global warming are cement construction, deforestation, fossil fuel use, etc.\u00a0<\/span>\u00a0<\/span><\/p>\n

However, Technologies, much like their human creators, are double-edged swords. Blockchains are also double-edged.<\/span>\u00a0<\/span><\/p>\n

How Bitcoin and other cryptocurrencies are fuelling climate change?\u00a0<\/span><\/b>\u00a0<\/span><\/h5>\n

Bitcoin mining alone uses a lot of energy. For example, Bitcoin mining uses more energy than Belgium and Finland.\u00a0<\/span>\u00a0<\/span><\/p>\n

The <\/span>Bitcoin network<\/span><\/b> generates huge amounts of carbon dioxide, as much as Turkmenistan. It has been found that <\/span>Ethereum\u2019s CO2 emissions<\/span><\/b> rival New Zealand\u2019s.\u00a0<\/span>\u00a0<\/span><\/p>\n

Further, the <\/span>Application Specific Integrated Circuit<\/span><\/b> (ASIC) mining equipment that crypto miners use produces a colossal 36,000 tonnes of <\/span>electronic waste<\/span><\/b> every year.<\/span>\u00a0<\/span><\/p>\n

The \u2018<\/span>proof of work\u2019 algorithms<\/span><\/b> used in the cryptocurrencies which make the blockchain, <\/span>decentralized, secure<\/span><\/b> and <\/span>open<\/span><\/b>, consume vast amounts of energy. Here, \u2018Proof of work\u2019 is a consensus mechanism that allows miners to validate cryptocurrency transactions by deciphering increasingly complicated <\/span>mathematical puzzles<\/span><\/b>. Solving a puzzle requires <\/span>heavy computing power<\/span><\/b> and therefore uses <\/span>tremendous energy<\/span><\/b>.\u00a0<\/span>\u00a0<\/span><\/p>\n

Measures Taken by the crypto industry to reduce emissions<\/span><\/b>\u00a0<\/span><\/h5>\n

The industry has resolved to go <\/span>carbon neutral<\/span><\/b> by 2030. Many blockchains, like Ethereum, are moving from <\/span>proof-of-work<\/span><\/b> to <\/span>proof-of-stake<\/span><\/b>, a mechanism that uses far less energy.\u00a0<\/span>\u00a0<\/span><\/p>\n

Other technologies like <\/span>sharding<\/span><\/b> and <\/span>non-tech methods<\/span><\/b> like carbon offsets are being used to create green crypto or green blockchains.<\/span>\u00a0<\/span><\/p>\n

So, is there a way that blockchains can actually help alleviate global warming and climate change?<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n

(1) Blockchains can be used to <\/span>decentralize<\/span><\/b> the power system. This can be done by creating peer-to-peer electricity sharing mechanisms for local communities. It will reduce <\/span>transmission losses<\/span><\/b> and encourage an economic model to produce and consume clean power through solar, wind, biogas and other sources. For example, the <\/span>Brooklyn Microgrid Project <\/span><\/b>uses smart contracts to trade solar electricity with neighbours over a blockchain.\u00a0<\/span>\u00a0<\/span><\/p>\n

(2) There can be <\/span>tokenization<\/span><\/b> of electricity for power trading and donations to poorer areas. This has <\/span>incentive mechanisms<\/span><\/b> to encourage recycling of industrial and electronic waste. This can be implemented using <\/span>smart contracts<\/span><\/b> that can propel incentive mechanisms. There will be rewarded for using <\/span>ecologically sustainable practices<\/span><\/b>.\u00a0<\/span>\u00a0<\/span><\/p>\n

(3) The \u2018<\/span>track-and-trace\u2019<\/span><\/b> or <\/span>provenance property<\/span><\/b> of blockchains can be used to track environmental treaties. For example, to enforce action, decrease fraud and prevent manipulation.\u00a0<\/span>\u00a0<\/span><\/p>\n

(4) Blockchains can be used to track <\/span>environmental donations<\/span><\/b> and how they are being used by <\/span>non-profit entities<\/span><\/b> working in the <\/span>environmental areas<\/span><\/b>. <\/span>Start-ups<\/span><\/b> like Bitgive and Bithope are working in this space.<\/span>\u00a0<\/span><\/p>\n

(5) The blockchains can help track and trace the greenhouse gases emissions, carbon credits and carbon tax mechanisms. They are being used in <\/span>global supply chains to<\/span><\/b> build efficiency and resilience. It can be used to measure and reduce the <\/span>carbon footprint<\/span><\/b> caused by them.<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on an article \u201cBlockchains can cut both ways in their impact on global warming\u201d published in the Live Mint on 21st July 2022.\u00a0 Syllabus: GS 3 Environment and Ecology\u00a0 Relevance: Role of Blockchain in the global warming\u00a0 News: Recently, the Centre for Alternative Finance at the University of Cambridge has… Continue reading Blockchains can cut both ways in their impact on global warming<\/span><\/a><\/p>\n","protected":false},"author":10308,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,9],"tags":[216,10501],"class_list":["post-196895","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-public","tag-gs-paper-3","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704817035},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/196895","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10308"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=196895"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/196895\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=196895"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=196895"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=196895"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}