There is a perception that blockchain technology uses a lot of energy. How can the sustainability of Web3, NFTs, and blockchain technology be addressed?
Blockchain is a distributed, decentralised system that uses a significant amount of electricity and processing capacity to record ownership of NFTs and validate crypto transactions. Furthermore, the NFT marketplace’s and other Web3 technologies’ continued growth has increased the environmental impact of blockchain.
The motivation to set up massive server farms, or Bitcoin “mines,” is strong. With its estimated annual electricity consumption of 150 terawatt-hours, Bitcoin, the greatest cryptocurrency in the world, uses as much energy as the whole nation of Argentina. The annual emission of carbon dioxide into the atmosphere from that level of production is about 65 megatons.
However, as society’s need for Web3 technologies grows, the sector will have to figure out how to become more sustainable so that the introduction of new technology doesn’t impede our efforts to tackle climate change.
Let’s examine some potential transitions to greener technologies and more sustainable energy sources for blockchain, cryptocurrencies, and NFTs.
How To Limit Blockchain’s Impact?
The following are some strategies for improving the sustainability and cleanliness of blockchain technology, cryptocurrency mining, and NFTs:
Embrace blockchain systems that use less energy. Numerous of the most well-known cryptocurrencies rely on “Proof of Work,” which is a term for energy-inefficient problem-solving techniques.
Miners compete with one another in POW systems to see who can solve problems the quickest and earn cryptocurrency rewards in the process. Such POW systems consume a significant amount of energy.
In contrast, “Proof of Stake” systems depend on market incentives, whereby “validators” deposit money in return for the authority to add new blocks to the blockchain. According to reports, Proof of Stake (POS) eliminates competition from the system and requires 99.9% less energy than Proof of Work, which lowers carbon emissions. The second-largest blockchain, Ethereum, just made the shift from POW to a POS system with success.
Using Renewable Sources
Mining blockchain using solar energy and other renewable energy sources is one way to make it more sustainable.
One of the biggest miners in the world, Genesis Mining, is situated in Iceland and uses only renewable energy. It also allows cloud mining for Ethereum and Bitcoin.
New blockchains might theoretically provide incentives for using green energy since each blockchain firm creates its own mining pay schemes.
While storing renewable energy can present challenges, certain countries can benefit. For example, hydroelectric resources provide for nearly all of Paraguay’s energy supply. Compared to countries that
rely on fossil fuels, this nation’s bitcoin mining will have a lower carbon footprint.
Can Blockchain Support Climate Efforts?
According to some experts, blockchain technology may hold the key to sustainability advances that can aid in the fight against climate change. Technology may help track product sustainability and monitor pollutants.
Furthermore, blockchain technology may hasten the introduction of renewable energy in underdeveloped nations.
“The world needs to virtually halve emissions over the next eight years to stay on pace for a 1.5°C world, while at the same time extending access to electricity to bring hundreds of millions of people onto the grid,” says Mark Radka, Chief of UNEP’s electricity and Climate Branch. Through the effective use of data, blockchain technology can contribute by enabling more precise load monitoring, generation, and distribution in the grid.
The efforts of academics and developers to go green and lessen their environmental impact will provide numerous hurdles for the blockchain, NFT, and Web3 domains. Among the many ways the fourth industrial revolution can become more sustainable are by incorporating renewable energy sources and transitioning to sustainable mining methods.
Moreover, technologies like Holochain, which are expected to be the successors of the blockchain ecosystem, have seemingly solved scalability issues and the energy demands of blockchain structures.
The Final Verdict
It’s clear that addressing the sustainability challenges of blockchain, NFTs, and Web3 technologies is crucial for the industry’s future. Transitioning to greener technologies and sustainable energy sources, such as embracing blockchain systems that use less energy, implementing renewable energy sources for mining, and advancing the battle against climate change through blockchain technology are promising steps in the right direction.
Moreover, the efforts of academics and developers to go green and lessen the environmental impact of these technologies will be vital for their long-term viability. Overall, the movement towards sustainability in blockchain, NFTs, and Web3 is essential for the industry’s continued growth and its positive impact on the environment.