While the world argues over the largest contributors of carbon emissions, blockchain technology has. arguably, made some of the largest strides towards bettering its consumption and output. Ethereum, which is the second-largest crypto behing Bitcoin, has drastically changed its functionality all for the sake of superior energy management.
The Merge, which took place at the end of 2022, sounds like something out of a sci-fi novel. But, Ethereum turned a heavy and very energy-intensive ‘proof of work’ system into an efficient, clean ‘proof of stake’ system. For those of you who might not know the difference, this article explains why such a small change has lead to a 99% reduced energy consumption.
Not only is Ethereum showing us how it’s done, their blockchain is being used by some of the biggest industry names to help fight back against rising carbon emissions, offering new and clever ways for technology to assist in the battle.
The great, green change
To put all of this into perspective, let’s look at the numbers. Before the Merge, Ethereum used a PoW system, which would involve an incredible amount of mining to validate transactions and ensure its overall security on the blockchain. The annual emissions at this point were over 10 million tonnes of CO2.
After the Merge, where PoS was put into place, the emissions dropped significantly to 2.8 thousand tonnes (with signs of further improvement). That’s the equivalent to about 5 flights – annually – from New York to London; as opposed to over 17,000 flights on the old system. It’s like taking the energy consumption of a small country and minimising it to a handful of commercial flights. It’s hard to think of any other mainstream operation achieving such a drastic drop in their carbon footprint. And so quickly too.
On top of this remarkable feat, Ethereum uses far more renewable energy than before. 48% come from sustainable sources, 32% from renewables and a further 16% from nuclear energy. It is a bold declaration from them that technolgies on the blockchain can fit in well with societal concerns of the environment. Crypto, which has always faced backlash with emissions has now shown more improvement than a vast majority of the worlds leading tech giants.
It’s also fair to assume that as this is improved upon, with many other blockchains following suit, the point of stake system will only leap forward.
Tracking our footprint
Not only have Ethereum made invredible improvements on their own process, they also demonstrate just how effective their blockchain is in tracking emissions for all of us.
The point of using blockchain technology rests on its ability to be quick, accurate, impenetrably safe and open to the inevitable advancements from future technology. Carbon tracking, which has always been a time-consuming and somewhat inaccurate process, is one such advancement. Blockchain systems can verify and accurately record carbon output and expenditure, almost in real time. Using smart contacts and sensors, the level of accuracy becomes incomparable to manual input, which is always prone to error.
This level of accuracy opens up potential advancements for businesses that require authorised certificates in green energy. As more markets are focusing their efforts on a ‘green’ business only approach, having automated certificates issued quickly (based on the information collected) speeds up the whole process – in turn, minimising further energy usage.
This can, and is, utilised across multiple supply chains, with blockchain being used to accurately determine micro changes allowing businesses to adapt effectively and efficiently.
A greener path forward
It’s always clear that there’s a lot of work to do when it comes to global emissions. But countries that embrace powerful tools such as energy-efficient blockchains are clearly making concerted efforts in bettering the environment.
The UK in particular has had a varied outcome with annual consumption, so consistency is needed. As blockchain retains far more accuracy and efficiency compared to traditional methods of industry, its a consideration for leaders to take seriously.
Of course, it’s understandable why this may take time. For blockchain tech to work at proficient standards it needs to rely on it’s ability to track accurately (which involves a level of automation). Not only is a change in infrastructure needed to allow this, the level of understanding around this tech needs to increase, informing smaller enterprises of its potential. Ultimately, it will be the smaller operations that will see the best impacts from this.
And of course, let’s not forget the inevitable red tape that will no doubt hinder swift application. While it’s important for regulations to be held in place, there needs to be a good balance, and support, for those that wish to on-board blockchain. Especially if it is to proactively address carbon output.
Put another way, the government needs to put their money where their mouths are. If they wish to clamp down on larger emissions from businesses and corporations, they need to make energy efficient technologies easily available, understood and implemented. Too much misunderstanding and legal interference will slow this down, inevitably frustrating those who wish to do their part for the environment.