Mike Scott assesses whether the technology will live up to its much-vaunted potential to be the Holy Grail of climate action, transforming supply chains and removing barriers to a clean energy future. Blockchain is one of the world’s most overhyped technologies, but there are hopes that it may help to tackle one of our most intractable problems – climate change. Blockchain, also known as distributed ledger technology (DLT), is the enabling force behind cryptocurrencies such as bitcoin. One of the main things people know about cryptocurrencies is that it takes huge amounts of energy to “mine” the coins. PwC economist Alex de Vries estimates that generating bitcoin uses 2.55 gigawatts (GWs) of energy a year, almost as much as the Republic of Ireland.
Miners use this energy by running computers to solve complex codes, known as a proof of work, to earn the currency. To limit the amount of currency in circulation, these proofs of work are becoming more complicated over time, requiring ever more computing and electrical power. In addition, many miners are in China, and use electricity produced by coal-fired power stations, the most polluting form of energy. However, blockchains in general do not have to use a lot of power, says the Climate Ledger Initiative, which explores how distributed ledger technology can help to tackle climate change: it is simply a feature of how cryptocurrencies are generated. PwC believes blockchain could potentially transform many existing processes in business, governance and society, without breaking the energy bank. In a report for the World Economic Forum, it says that “as blockchain matures, its energy […]