From banking to logistics, blockchain technology holds promise. A wide range of applications is considered, from energy trading schemes to transparent supply chains to food safety.
Blockchain’s non-sustainable energy consumption is often overlooked as people envision ways in which it might change the world. Cryptocurrency miners are also disadvantaged by their need to invest in stronger and more resource-consuming computer hardware to succeed compared to their peers.
The cost of blockchain is its environmental impact
Lastly, but not least important, the enormous energy consumption of blockchain technologies is another challenge. Despite being present in the market, the majority of blockchains use a large amount of energy.
Between now and now, computers compete with each other to solve the mathematical puzzle, consuming a record amount of energy. The costs will rise exponentially when you add the costs of cooling the computers.
Furthermore, from a business perspective, private blockchains are better suited to protect company interests because they provide restricted access and additional privacy to guard trade secrets.
The blockchain energy issue can be resolved in several ways, according to analysts. Some of them include:
- Eliminate the proof-of-work validation method
Computing power and resource usage are rewarded in proof of work as validation methods. With increasing computer power, cryptocurrency miners’ mining power increases as well. Through proof of work, people are rewarded with cryptocurrency when they solve the mathematical challenges necessary to validate blockchain transactions.
In the cryptocurrency sector, some people prefer to use proof of stake or authority instead. Bitcoin researcher Alex de Vries supports proof-of-stake.
Depending on how many cryptocurrencies coins a person has, they are granted validation or mining privileges. To confirm their stakes, people must surrender their crypto, just like holding them in an escrow account. Falsely validating a blockchain transaction results in the loss of staked coins and the inability to approve future blockchain entries.
To validate blockchain transactions, proof of authority is required. This means that only a select group of people – 30 or fewer – can validate blockchain transactions. The consensus of blockchain users is that these individuals are regarded as trustworthy. The consensus method is most typically used on private blockchains, such as those designed for energy trading schemes or monitoring sustainable business practices across a supply chain.
Reputations are at stake here. Malicious validators lose their status within the group and will be prevented from performing further validations.
It is significantly less energy-intensive to validate the stakes and the authority compared to a proof-of-work. There should be a reduction in blockchain energy consumption if developers implement less energy-intensive verification methods.
For example, the Energy Web Foundation (EWF) is coming up with a way to confirm blockchain content based on proof-of-authority. The organization wants to use blockchain technology to support renewable and distributed energy sources.
Regulatory and technical requirements are addressed in the energy sector using blockchain technology. The EWF intends to have 1000 energy authorities participate in this blockchain. In addition, it is working on a governing plan to eliminate bad actors.

2. Use blockchain to promote energy-efficient transportation
Blockchains can be operated in the following ways. There is, however, a different approach to reducing energy consumption with blockchains. Blockchain will be used to promote energy-efficient modes of transportation, including electric vehicles. Thus, the blockchain encourages people to adopt environmentally conscious, eco-friendly behaviors to reduce their carbon footprint.
In addition to the lack of infrastructure, there is another barrier keeping people from investing in electric vehicles. There may not be any or many electric charging stations in their cities. Travelers may worry about power outages in unfamiliar and isolated places if they make frequent road trips.
Private charging stations can be found on peer-to-peer platforms built on blockchain. Sharing & Charging is one such example. Through Ethereum’s distributed ledger, the platform connects drivers with charging points.
A few researchers are building blockchains that are more energy-efficient than those that consume so much.
During times when they don’t need to connect their electric vehicles, the people who own those power hubs can earn some cash on the side. A blockchain is used for recording such transactions, which are seamlessly handled by the relevant parties through an app. Electric vehicle owners could benefit from projects like that because they will experience less range anxiety.
In addition, there is a blockchain project called DRIFE that brings on-demand transportation to the blockchain. It’s a decentralized system for rating and recording drivers’ payment details in the blockchain.
People learned to trust the idea of hiring on-demand drivers with Uber and Lyft. Using blockchain for transportation could eliminate some of the problems associated with gig economy usage while emphasizing transparency. People may decide to stop owning cars if it becomes an available option.
3. Develop blockchains that are more energy-efficient
Blockchains that do not use so much energy are being developed by some researchers. In an attempt to reduce blockchain energy use, that route is like the first possibility we discussed.
Taking Red Belly Blockchain as an example. Thousands of transactions per second can be completed with this speedy solution. The current average number of transactions per second on blockchains is 20 or less.
Researchers have developed a smart algorithm for this blockchain, which allows scalability with minimal increases in energy consumption levels. A game theory-based proof-of-work method is also not employed on the Red Belly Blockchain.
In the long run, if projects like this one succeed, more people will realize it is possible to use blockchain as a secure method of verifying transactions and keeping sustainability in mind.
It will likely take some time before blockchains become the norm – if they ever do. Researchers are beginning to recognize that blockchain energy is a major concern. Their ability to develop a tool that is successful in lab tests can also help other teams find ways to improve.
4. Mining bitcoin in a sustainable manner
Earlier we mentioned that cryptocurrency miners are responsible for the extremely high energy demands of the blockchain due to the computing setups they use. There are some efforts underway to mine bitcoin with solar or wind power, such as an initiative by Cryptosolartech in Spain.
Despite bitcoin mining employing energy-intensive, proof-of-work methods, these solutions aim to reduce the associated carbon footprint and prove that sustainable methods are available to allow it to continue.
The corporate world should ask plenty of questions about how blockchains or cryptocurrencies work in the context of transactions and currency mining before deciding to use them for their systems.
Next, we should prioritize companies or miners using sustainable methods. An example is Northern Bitcoin, which employs sustainable methods. Their mining is among the most sustainable in the world. Renewable energy is used 100 percent.
Blockchain can contribute to energy sustainability
The energy requirements of blockchains have given blockchain a bad reputation, and this is understandable. With the options mentioned above, the blockchain could improve its reputation among people who value its technical potential but have problems with its energy requirements.
Outstanding blockchain projects must not captivate corporate decision-makers. Before pursuing blockchain solutions, it is very important to thoroughly research their energy implications. They should focus on aligning themselves with companies that have the greatest potential for achieving sustainable operation.
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