Blockchain and its Environmental Impact

Blockchain and its Environmental Impact

Gov CIO Outlook | Friday, February 15, 2019

Blockchain technology has gained enough hype and does not require an introduction. Since, Satoshi Nakamoto introduced the first bitcoin, along with first implementation of blockchain database; the technology has implemented across all verticals theoretically. Still, the only successful application of the technology exists in the form of cryptocurrency that too has a debatable stand. Detractors point fingers on the negative impact of blockchain on the environment as the ledger requires enormous energy for bitcoin mining which can result in high carbon footprints. On the other hand, proponents of the technology take a firm stand on treating it as a boon for the environment.

Detractors Thoughts

The decentralized ledgers consume a fair amount of electricity, especially when it comes to use in cryptocurrency mining. Crypto mining is a type of digital cryptography involving the recording of transactional data in a public ledger. Such cryptography utilizes ‘proof-of-work’ protocol that rewards the miners with digital coins for solving complex equations. As a result, huge energy consumption takes place because ‘proof-of-work’ functions like hit and trail requiring enormous computing power.

Specialized hardware machines have been configured at the data centers to carry out complex calculations quickly, but again consumption of energy is high resulting in substantial carbon footprints. Environmentalists believe that the need to reduce carbon footprints is an urgency that must be addressed immediately, else outcomes can be devastating.

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Proponents Stand

Advocates of the technology put forward the point that the new cryptography protocol ‘proof-of-stake’ that recently came into existence is a helping hand in mining with least carbon footprints. The new protocol functions similar to Tambola housie game, where miners store set of outcomes in their ledger and when the network selects an outcome from that particular set, miner gets rewarded. Energy consumption is marginally low as the computational power involved is less in comparison to ‘proof-of-work’ protocol.

Another viewpoint is that blockchain can be utilized eco-friendly. A few start-ups have emerged with the idea to use blockchain in carbon dioxide removal marketplace. Carbon removal suppliers can connect with altruists from around the world for funding in the removal architecture. Immutability feature of blockchain ledger injects transparency to processes which can be fruitful for tracking the funds and donations made for social activities.


Blockchain also has two sides like all other technologies; it depends on the user which one to choose. Optimal utilization can result in benefits to the environment.

Few Environmental Technology Companies(Wildnote, Xylem )

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