Exploring the Environmental Impacts of Blockchain and Cryptocurrency

Blockchain technology is the foundation layer of cryptocurrency, which uses complex maths problems to sanction a transaction, and the entire thing can be done without the intervention of a third party. 

Blockchain can alter the current economic structure and propagate the new idea of peer-to-peer transactions.

However, amid all these positive effects, it is becoming one of the major emitters of carbon dioxide and requires a lot of energy which emits GHG. 

In this blog, we will discuss the environmental aspects of blockchain and will look for solutions to mitigate those negative environmental impacts.

1.      Cryptocurrency Mining

It is one of the most energy-intensive processes requiring a lot of computing power to create a proof of work that will prove that the transactions have occurred. Large warehouses have been created, requiring much energy for computing power and providing cooling effects.

If the process doesn’t change, it will become difficult to slow down the impacts of climate change. Zero emissions are still far-fetched, but knowing the meaning of net zero is essential. Then only we can attempt to reduce permissions.

Net zero is the process through which we can plan to stop emitting greenhouse gases into the atmosphere. Therefore, technologies such as blockchain must be modified to stay aligned with the global effort to reduce GHG gases in the atmosphere.

2.      Environmental Concerns

As a species, we understand how important the current ecological conditions are and how much the survival of the entire human race depends on maintaining the correct temperature, which will stop the negative feedback loop of melting ice caps.

High energy usage is unsuitable for building a sustainable world as it will continue to emit carbons and challenge the existence of the current geological order. As the technology is effective, it becomes the collective problem of the entrepreneurs, authorities and investors to look for alternative or better tech to help address this global problem.

3.      Evolving Solutions

Now it’s clear what the world of cryptocurrency has put in of us; as the most valued asset, Bitcoin. To tackle this problem, the enthusiast of this revolution are trying to find an alternative method which will consume a much smaller amount of energy, as compared to Bitcoin and is exploring new formulae such as “proof-of-stake” or “proof-of-authority” system, which are slowly getting capable of replacing the current process of cryptocurrency mining.

At the governmental level, they are also started practising to reward contracts to those who follow the PPN 06 21 guidelines and will also cover the aspect of environmental conservation in their plan.

In the case of cryptocurrencies, governments are also trying to build their cryptocurrency, which will follow the guidelines of environmental norms.

4.      Taking Steps Forward

Big companies understand the role and impact of blockchain in their business and are therefore exploring ways to make the entire process feasible. The idea is to minimize power consumption without hampering the computational power.

The researchers and scientists are working to develop a sustainable and sustainable model that will also have a positive impact. Hence the catch-22 situation must be solved effectively and immediately.