Over recent months, climate change has been among the hottest topics in the blockchain field. In fact, it has been among the topmost spoken-of issues in a variety of other sectors too. Another year of freak weather events, including floods and wildfires, along with the latest IPCC report that’s been flagged as a “code red for humanity,” further proves that climate change is now an issue impossible to ignore. The latest stark warnings have reignited the blockchain energy consumption debate once again.
As the NFT craze took off at the start of the year, many climate-conscious artists vocalised their disapproval of Ethereum’s energy consumption. In May, Elon Musk then derailed Bitcoin (BTC), citing the energy consumed by Bitcoin is enough of a reason to cause Tesla to withdraw its plans to accept BTC as payment for its electric cars.
Both of these events have provoked a surge of debate from inside and outside the blockchain community. In particular, the arguments tend to focus on two areas: Bitcoin’s energy consumption and its dependency on climate-damaging fossil fuels versus renewables, and secondly, the benefits of one blockchain platform over another – generally focusing on consensus models and promoting proof-of-stake as the greener option.
Each debate is pungent with arguments for both sides. If the IPCC is correct, then the need for drastic action to help reverse some of the damage cannot be overstated. To do that, the focus ought to be on the positive applications of blockchain.
Leveraging blockchain’s strengths
One significant way that blockchain’s impact is already substantial is its ability to crowdsource large amounts of otherwise wasted energy. Wasted energy that is aggregated and reignited for further utility. Crowdsourcing wasted energy is in keeping with the principles of a circular economy, which eliminates the throwaway culture by reusing existing resources as much as possible. Computing power is one excellent example.
Whether it be a personal laptop or a commercial server out of office hours, there’s a vast amount of wasted idle computing power lying around on dormant hardware. At the same time, there’s a vast demand for computing power that’s being met by companies like AWS, which are continually building new data centres, further straining the environment.
Blockchain networks like Cudos’ decentralised cloud compute platform redirects spare power from idle computers and puts it to better use, reducing waste in the process. Other networks like Filecoin or Bluzelle focus on storage services, but the principle remains the same.
Decentralising the energy grid
Other projects are using this concept to decentralise energy networks. Brooklyn Microgrid is a hyper-local initiative allowing “prosumers” (producers and consumers) of solar energy to sell their surplus by funnelling it into a microgrid where other participants can buy it. It’s the kind of “act local, think global” project that proves anything is possible if you’re willing to start from scratch.
In Vienna, the government has previously funded an initiative allowing citizens to earn token-based rewards for identifying sources of heat waste that can be recycled back into the energy grid. This is a slightly different variation on the same decentralised theme that still uses the same principles of leveraging blockchain technology for the greater good.
Trustless green credentials
Blockchain technology also has a fundamental role in bringing transparency and accountability to governments and corporations for their role in fighting climate change. Transparency in ESG (environmental, social, and governance) matters is currently high on the agenda for CFOs, following the introduction of the EU Sustainable Finance Disclosure Regulation earlier this year. In its broadest terms, the Regulation obliges banks and financial institutions to categorise their investment products according to their green credentials.
Using blockchain to store and verify this information would increase visibility and vastly increase the level of trust that investors can place in products brandishing ESG credentials. Quickly, it’s becoming easy to envisage a future where consumers and enterprises can make choices based on the algorithmic ESG ranking of any type of organisation on the blockchain.
Being the ‘least bad’ blockchain platform will no longer suffice, and the community is far from helpless regarding the climate emergency. It has a powerful technology at its disposal, along with some of the best, brightest, and most innovative thought-leaders in the world.
Ultimately, blockchain technology can be applied to many positive use cases that give more to the green cause than they take away. Therefore, the case for its application in preserving the environment is far more robust than the case against.
Author: Matt Hawkins, Founder & CEO of Cudo Ventures
Bio: Matt Hawkins is the founder and CEO of Cudo Ventures, a global leader in providing monetisation applications for users worldwide, and Cudos, a decentralised cloud computing network bridging the gap between cloud and blockchain by recycling the world’s idle computing power. He previously founded C4L in 2000, which was acquired in 2016 and was one of the UK’s fastest data centre ISPs, supporting around 1% of the UK’s internet infrastructure and is the winner of many fast-growth awards, including Times Tech Track 100, Deloitte UK Top 50, Deloitte EMEA Fast 500 & many more.
The Cudos Network is a layer 1 blockchain and layer 2 computation and oracle network designed to ensure decentralised, permissionless access to high-performance computing at scale and enable scaling of computing resources to 100,000’s of nodes. Once bridged onto Ethereum, Algorand, Polkadot, and Cosmos, Cudos will enable scalable compute and Layer 2 Oracles on all of the bridged blockchains.
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