Specialists from the United Nations Environment Program (UNEP) believe blockchain technology can help fight climate change.
- First, it provides a transparent and reliable way to account for green investment and the measures countries are taking to reduce emissions.
- Secondly, blockchain can promote more active use of renewable energy sources such as wind and sun. Since such sources are inherently volatile and decentralized, blockchain technology can provide a platform to better manage them and create new clean energy markets.
By the way, this technology has been repeatedly used in this area. For example, the Canadian platform CarbonX analyzes the greenhouse gas emission reductions of certain companies, converts these indicators into a cryptocurrency that can be bought and sold, and thus provides producers and consumers with a financial incentive to be responsible for the environment.
Finding Low Carbon Solutions
The potential of blockchain and cryptocurrencies is huge, according to the UN. However, experts have to solve the most important task - to significantly reduce energy consumption when using this technology.
Some organizations are already working in this direction. For example, the Ethereum foundation, which supports the existence of the blockchain and cryptocurrency of the same name, is now developing a new way to verify transactions that will reduce energy costs per transaction by 99.95 percent.
At the same time, many players in the cryptocurrency market are trying to switch to the consumption of exclusively "green" energy. In April 2021, several organizations operating in the financial and environmental sectors entered into a "Crypto-Climate Agreement" with the goal of reducing carbon dioxide emissions in the global crypto industry and achieving zero emissions by 2030.
What is blockchain
Blockchain is a kind of database. The name is translated from English as "chain of blocks". It contains records of completed deals, or transactions, and you cannot delete these records, you can only add new ones. This is the main difference between blockchain and conventional databases. Another important principle of blockchain technology is the absence of a single controller - the system is controlled by many participants.
It takes huge amounts of electricity to power the Bitcoin network. Tim Berners-Lee, considered the founder of the World Wide Web, called the creation, or "mining," of Bitcoin "one of the most meaningless uses of energy."
Bitcoins do not exist in the "real" world, this virtual "coin" is created as a result of the most complex mathematical calculations performed by the most powerful computers. The Bitcoin network absorbs more energy than many countries, such as Kazakhstan or the Netherlands.
Considering that a significant part of the world's energy is still generated by power plants that use fossil fuels, it can be said that Bitcoin mining plays an important role in the pollution of the atmosphere with greenhouse gases. Although, of course, as experts emphasize, the agricultural, construction, energy and transport sectors of the economy have a much greater impact on climate change.