Why Blockchain, NFT and Web3 have a durability problem

Why Blockchain, NFT and Web3 have a durability problem

Why Blockchain, NFT and Web3 have a durability problem

Blockchain – the distributed, decentralized system that helps verify crypto transactions and record ownership of NFTs – requires a massive amount of computing power and electricity. And as the NFT market and other Web3 technologies continue to grow, the environmental impact of blockchain increases.

The incentive to create cryptocurrency “mines” or huge server farms is high. Bitcoin, which is the largest cryptocurrency in the world, consumes around 150 terawatt hours of electricity each year, an amount equal to the entire country of Argentina. Producing this amount of energy releases about 65 megatons of carbon dioxide into the atmosphere each year.

But as society’s thirst for Web3 technologies continues to grow, the industry will need to find ways to be more sustainable, so that new technologies don’t slow down our efforts to fight climate change.

Let’s look at some of the ways blockchain, cryptocurrency, and NFTs could transition to greener technologies and more sustainable energy sources.

How to Reduce the Effects of Blockchain Technology

Here are some ways to make blockchain technologies, cryptocurrency mining, and NFTs cleaner and more sustainable:

Adopt more energy-efficient blockchain systems

Many of the most popular cryptocurrencies depend on energy-inefficient problem solving systems called “Proof of Work”. In POW systems, miners compete to see who can solve problems the fastest in exchange for crypto rewards. POW systems like this consume a lot of power.

“Proof of stake” systems, on the other hand, rely on market incentives, and “validators” deposit a stake (a deposit) in exchange for the right to add blocks to the blockchain. Removing concurrency from the system using proof-of-stake (POS) would use 99.9% less energy than proof-of-work, and therefore lower carbon emissions. Ethereum, the second largest blockchain, recently successfully transitioned from POW to a point-of-sale system.

Adoption of renewable energy sources

One obvious way to make blockchain more sustainable is to harness solar power and other green energy sources.

Genesis Mining, which is based in Iceland, is one of the largest miners in the world, and it uses 100% renewable energy and enables Bitcoin and Ethereum mining in the cloud.

Since each company that uses the blockchain defines its own miner compensation systems, new blockchains could eventually offer incentives for the use of green energy.

Although renewable energy can be difficult to store, some countries have a clear advantage. For example, Paraguay’s energy supply relies almost 100% on hydroelectric sources. Bitcoin mined in this country will have a lower carbon footprint than countries dependent on fossil fuels.

How blockchain could be useful in the fight against climate change

Some experts predict that blockchain could hold the key to sustainability innovations that can help us fight climate change. The technology could be useful in monitoring pollution and tracking product durability.

Additionally, blockchain technology could actually help accelerate the deployment of renewable energy in developing countries.

Mark Radka, Head of UNEP’s Energy and Climate Branch, said: “The world needs to nearly halve emissions over the next eight years to stay on track for a 1.5°C world, while by expanding access to energy to bring hundreds of millions of people on the grid. Blockchain technology can play a role in enabling more accurate monitoring, generation and distribution of load in the network through efficient use of data.

The greening of the blockchain

The blockchain, NFT and Web3 spaces will face many challenges as researchers and developers try to go green and reduce their environmental impact. Integrating renewable energy sources and shifting to truly sustainable mining practices are just a few of the ways the Fourth Industrial Revolution can become more sustainable.

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