Blockchain technology and its environmental impact on our world –

Blockchain is undoubtedly one of the most innovative technologies in recent times, but it seems that its full potential has yet to be realized. The possibilities seem endless, and the technology will only gain ground as it progresses further. Many countries (including but not limited to El Salvador, Estonia, and Singapore) and companies (including but not limited to Amazon, JPMorgan, and Microsoft) that are currently in their infancy have welcomed this technology with open arms to make concrete operations more efficient.

This raises the question, “If blockchain technology has so many applications in its infancy, how many are there when the so-called drawbacks are eliminated? One of the main drawbacks limiting the widespread adoption of blockchain technology is the need to verify transactions. how much power.

Environmental Impact of Blockchain Processes

While blockchain technology is a fascinating technology and promises to be a key component of Web 3.0, many critics seem to have their sights set on a major flaw, the energy-intensive nature of blockchain processes.although Proof of employment The (PoW) consensus algorithm (the most energy-intensive process) is just one of the methods of verifying transactions on a blockchain, and it is still the method used on most leading blockchains, including Bitcoin and Ethereum. Research shows that Bitcoin mining now consumes more energy each year than the entire country of Argentina, with a single Bitcoin transaction using about 2,000 kilowatts of electricity, which is roughly the same amount of electricity that the average American household consumes in 70 days. All told, the academics have come up with a theory that emissions from bitcoin mining, which includes about 96 million tonnes of carbon dioxide a year, could raise the temperature of the planet by 2 degrees. Of course, this model doesn’t seem sustainable given our deteriorating climate conditions.

If the PoW consensus algorithm continues to be used, the energy consumption will definitely increase over time as user adoption increases.

It seems ironic that we still have blockchain technology projects aimed at controlling the climate crisis. However, despite their good intentions, their purported solutions do not address the damage done by other projects leveraging the technology.

Can mining use less energy?

If we take into account the millions of dollars already invested in the current framework of mining processes, it becomes clear that there will be serious challenges when trying to transition to more energy efficient systems.

There are a number of proposals aimed at taming energy-hungry blockchain technology. For example, Elon Musk met with the CEOs of some crypto mining companies to discuss their energy usage. The hypothetical conclusion would be the creation of a Bitcoin mining committee whose mission is to increase energy transparency. There is also a Climate Agreement initiative, which is responsible for making blockchain run only on renewable energy by the end of 2025 and zero emissions in the blockchain space by 2040. The goal will be to achieve energy-efficient consensus algorithms in part through the decarbonization of the blockchain, while ensuring that projects that require proof-of-work algorithms to operate locate their mines in areas with a surplus of renewable energy.

The popular Ethereum network also plans to reduce its energy consumption by about 99.9% in 2022 by transitioning from a proof-of-work to a proof-of-stake consensus algorithm, as many other projects have done. Unlike Proof of Work, which relies on the sheer speed of computers to solve complex puzzles in order to add blocks to the chain and validate transactions, Proof of Stake will require miners to show how much currency they have locked (staking) in order to increase their chance to be selected as validators. In theory, this would reduce the energy required to validate each transaction. Word has it that ETH 2.0 will require potential validators to stake 32 ETH (currently worth $103.7 million) for validator opportunities, with more opportunities requiring multiple. However, the main concern of Proof of Stake is that those with more ETH are in a good position, causing the system to break with the key spirit of blockchain technology, which is decentralization.

Also, consider how to customize blockchain technology Yes, several consensus models are also designed. For example, Proof of Reputation provides more verification power to the most reputable individuals in the ecosystem. Proof of Authority is another place where network participants stake their identities and reputations, and then give an advantage to those who are most likely to get the job done with zero complications.

There are also proposals to move bitcoin operations next to oil fields and brain farms, thus harnessing all the excess energy. However, as mentioned earlier, putting these theoretical ideas into practice requires a substantial capital injection. As we all know, the profitability of mining depends on the value of the underlying cryptocurrency. The next challenge is, “What happens when the price of Bitcoin falls below a certain threshold, putting profitability in question?”. Projects like this are likely to be abandoned because they are not economically viable.

One thing is clear, we need to pay more attention to the adverse effects of blockchain technology on the environment, because it is important not to watch our planet burn up.

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