Blockchain has the power to change our world for the better in so many ways. It can provide unbanked people with digital wallets, prevent fraud, and replace outdated systems with more efficient ones. But we still need this new and improved world to be one that we want to live in. The largest cryptocurrencies — Bitcoin, Bitcoin Cash, and Ethereum — require vast amounts of energy consumption to function. Last year, blockchain used more power than 159 individual nations including Uruguay, Nigeria, and Ireland. Unsurprisingly, this is creating a huge environmental problem that poses a threat to the Paris climate-change accord.
Making Cryptocurrency More Environmentally Sustainable
The largest cryptocurrencies — Bitcoin, Bitcoin Cash, and Ethereum — require vast amounts of energy consumption to function. Last year, blockchain used more power than 159 individual nations. Unsurprisingly, this is creating a huge environmental problem that poses a threat to the Paris climate-change accord. An immediate fix is providing miners with incentives to use solar power or other green energy sources when processing transactions. Developers also need to think long and hard before creating new Proof of Work blockchains because the more successful they become, the worse ecological impact they may have. Companies adopting blockchain can take more collective action to shift to “Proof of Stake” systems that reserve energy and process transactions faster.