Blockchain Cryptocurrency and the World of Sustainability
What is blockchain?
Blockchain was brought to life in 1991 by Stuart Haber and W. Scott Stornetta. Their goal was to create a system that could not be tampered with. It took almost 20 years for blockchain to be known. In fact, it wasn’t until the release of the popular Bitcoin that it became fully applied and recognized.
An early leader in the cryptocurrency market, Bitcoin was founded by a group of people under a pseudonym of Satoshi Nakamoto, where they wrote a paper, “Bitcoin: A Peer-to-Peer Electronic Cash System”, describing how the Bitcoin blockchain network works.
How has blockchain helped the world today?
Blockchain Technology can be a vital tool to help boost sustainability. For example, the United Nations, which mandated the Sustainable Development Goals, aided humanitarian acts–from transfering cash to disaster victims, coordinating the delivery of supplies and streamlining humanitarian financing, among others–through the use of Bitcoin.
Blockchain could also help climate change through peer to peer transactions of renewable energy systems, optimized distributed grid management, and crowd scale investors for renewable energy–which can help refine the upward trend of the world’s renewable power sector.
It could also help with Biodiversity and conservation by transparent monitoring and traceability of supply chain transactions, investments in habitat transactions and species conservation, incentivization for farmers to protect habitation and to track geographic reach and movement of endangered species.
Can blockchain be a more sustainable option for trading currency?
Blockchain could also be a threat to the environment as well. One transaction with Bitcoin has the same energy required to power at least 22 average american households for a single day, or 700,000 more energy than it takes to power a Visa transaction. Now using carbon footprint as the unit to measure, the process of creating 200 billion paper and 60 billion coin bills generates a total of 9.5Mt of CO2 based on production in 2014–while the annual emissions of Bitcoin is at around 37 Mt of CO2. The energy consumption of Bitcoin is massive due to how cryptocurrency is acquired. Bitcoin is made through the process of mining and creating of “new blocks” by solving complex algorithms. One of the biggest Bitcoin miners in the world is China. As a result, their mining process is sustained by the use of coal and gas.
Although, there are several companies that have used bitcoin to maximize the advantages of renewable energy. One would be Reneum, this is a company created by Sindicatum, where it uses blockchain in order to maximize transactions and verifies the authenticity of an energy source.
How else can blockchain be more sustainable?
There are other options in order to make Blockchain more sustainable:
- PoS or (Proof of Stake)
This was first suggested in 2011 during a forum, and by 2012 peercoin adopted the PoS algorithm to their system. The system declares that an individual can validate or mine transactions depending on how much virtual coins he or she has. Meaning the more cryptocurrency a person has, the more mining power they have.
- DAG or (Directed Acyclic Graph)
Are used to show connectivity, probabilities and casualty. The graph in this matter acts as the structure from Nodes and Edges.
Nodes – are usually denoted by circles or ovals (although technically they can be any shape of your choosing).
Edges – are the connections between the nodes. An edge connects two nodes. They are usually represented by lines, or lines with arrows.
DAG is more sustainable than blockchain because it can operate without it’s miners. Users are also required to have confirmations with each other’s previous transactions before making a new one–reducing the carbon emissions that could be produced by unplanned mining.
- Connect Mining Computers to Renewable Energy Sources
Mining is done by top of the line computers that are used to solve complex math problems that cannot be solved by humans. These types of computers need to work at full capacity just to collect the data it needs to discover the solution. In fact, there is only a 1 out of 13 trillion chance that these computers will solve a problem successfully. As a result, computers of this calibre require and contribute to the consumption of large amounts of electricity. A way to make it less taxing is to use renewable energy sources, as it will lessen the cost of electricity and increase energy efficiency drastically, thus allowing the process of mining to be more eco-friendly.
At the moment, Blockchain seems to be the more sustainable option due to it’s digital flexibility. However, advancements with cryptocurrency in the form of how it is acquired have contributed to the increase of carbon footprint to which is more than the production of paper bills by a close margin. But, because of the broad process of distributing paper bills and several branches of blockchain, it is difficult to take into account each one’s specific number of the carbon footprint.
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