Cryptocurrencies, NFT, Web 3.0: What is the Impact of “Blockchain” Technologies on the Planet?

On says they’re the only future of the internet, or they’re being called a passing fad. Often associated with cryptocurrencies, NFTs, Web 3.0… Blockchains or blockchains are presented as both an internet revolution and a potential threat to our environment. Will they save our planet or destroy it? Probably not either. But their impact is not neutral and deserves to be addressed.

Blockchain technologies have been developed since 2008. They make it possible to exchange peer-to-peer data, verify it and store this information horizontally. It is a transactional database based on a central principle: the consensus mechanism. In order to validate a transaction, most computers on the network must validate it. By definition, there is no centralized broker, but rather a multitude of terminals that act as relays and verifiers of the exchanges.

Public interest in blockchains coincides with the appearance of Bitcoin. By definition, this cryptocurrency is not dependent on any central bank. Its history is therefore more volatile as it is not subject to any regulation. But it was so successful that some states, like El Salvador, adopted it as their national currency.

Performance-hungry operation

Since this star currency, we no longer count the uses of blockchains today. To sign a contract, host a website, even certify a diploma, they guarantee trust and consistency. But along with the multiplication of their uses, alarming articles and studies have emerged about their impact on the climate.

The best known and most discussed example is Bitcoin. Several terminals compete to “verify” and thus secure each transaction of this virtual currency. A series of transactions is referred to as a “block”. To validate a block in a new transaction, computers must solve a complex equation and the fastest wins a cryptocurrency reward. So to check if the user is “honest” in this chain, he has to bother to solve the equation. This verification technique, called proof of work ‘, or Proof of Work, requires computers with large computing capacities… And thus large amounts of power consumption.

Thus, the Bitcoin “mining farms” were born. Far from the rural aspect, they are rooms or sheds with several computers dedicated to solving a “block”. Between the consumption of computer equipment and that of cooling networks, the impact is not negligible. According to figures from the University of Cambridge on Bitcoin’s electricity consumption, mining this cryptocurrency requires as much electricity per year as Pakistan and its 225 million people – or about 93 terawatt hours (tWh) per year. On the other hand, this is less than the annual consumption of refrigerators in the United States (about 104 tWh).

Fossil fuels and solutions

In order to “mine” and benefit from it, it is necessary to find electricity at a low cost. However, countries with cheap energy are often those that still rely heavily on highly polluting fossil fuels. In the Bitcoin mining map we mainly find the United States, China and Kazakhstan. Most of the power generation in these countries comes from oil, coal or gas. According to estimates by the University of Cambridge, Bitcoin would still account for 0.09% of the world’s greenhouse gas emissions. That’s about as much as Central African Republic or Nepal.

Not all blockchains consume as much as bitcoin. For example, the Ethereum blockchain, both a cryptocurrency and a platform for NFTs, “smart contracts” (smart contracts) and other applications consumes much less. Its currency is Bitcoin’s main competitor. On September 15, 2022, Ethereum released an update that changes how it works. “Ethereum’s energy consumption has dropped by around 99.95%, making Ethereum a green blockchain”, we can read on his website. How ? By changing the verification mode from Proof of Work (used by Bitcoin) to Proof of Stake.

Without anything changing for users, this new method makes the time-consuming mining technique obsolete. Through a contract – present on this blockchain – the user commits to invest a capital in cryptocurrency and guarantees to perform the block verification work honestly and in sufficient quantity. The money can be taken from him if he fails to fulfill his part of the contract. Therefore, no heavy calculations are required to prove confidence in the currency: “Ethereum’s energy consumption is roughly equivalent to the cost of running a modest laptop for each node on the network.” welcomes Ethereum to its site. But a technology change in the most important cryptocurrency Bitcoin is difficult to imagine. This would require a user consensus decision, which is difficult to achieve anyway. And the people who have invested in computers – sometimes in huge amounts – in order to dismantle them certainly don’t want to let them gather dust.

An indispensable technology?

We need to put bitcoin, like other uses of the blockchain, in context: they are tools. More or less important tools. For example, we can question the need for NFTs (non-fungible tokens) that make it possible to acquire intangible and unique works – images, sounds, videos, etc. – that are uniquely encoded and registered on a blockchain. Ultimately, it is speculation on an art market 2.0 … without a major contribution to society.

But the blockchain can also ensure the sustainability and stability of a page or data. “You have to separate the impact question from the blockchain concept, that’s very interesting. With its detection system and traceability, it has that decentralized aspect that makes it resilient. In the coming world, which will certainly be more chaotic, this makes the system more sustainable.”predicts Frédéric Bordage, founder of the Green IT association, which promotes digital sobriety and responsible digital engineering.

Although he thinks so “Bitcoin has recently become an energy spree”he says he hasn’t “not too scared” on the future environmental impact of blockchain. “There’s a ‘hype’ around certain uses, and even if we fry the digital resource during this time, it will eventually stabilize to assume tangible use in people’s lives. »

Blockchains cannot be owned by anyone and are therefore much more secure, unlike transactions or data hosting in the hands of large corporations – this data is collected and stored by “GAFAM” (Google, Amazon, Facebook, Apple, Microsoft etc.) at the mercy of their strategies companies, the ethics or the unscrupulousness of their managers. Transactions carried out on a blockchain are also a guarantee of transparency: anyone can access this data. Based on trust, they can have infinite uses. They could be used, for example, in the implementation of the Paris Agreement, researchers suggest, by keeping a carbon inventory.

“The problem is not blockchain as a concept. That’s how we’ll get it supports Frederic Bordage. what do we do with it What do economic actors do with it? That is the question. » The impact of blockchains is still marginal, but it should not make us forget the big polluters of today. Banks pollute more than any cryptocurrency.

“The carbon footprint of the major French banks is almost eight times the greenhouse gas emissions of France as a whole. reports Oxfam France. At the current rate [elles] bring us to +4°C warming by 2100.” Aside from depending on it year after year, they continue to fund fossil fuels. The debate about these fledgling blockchain technologies should not serve as a distraction. Real revolution or house of cards, they must be watched… Without forgetting to keep in mind the pollution of the industrial age, which is still far too massive.

Emma Bougerol

Featured Photo: Cryptocurrency Mining Farm CC BY 2.0 Marko Ahtisaari via Flickr

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