Blockchain Technology and the Environment — Misconceptions and Solutions

Everyone is talking about the need for a change towards cleaner energy and environment, as more politicians and scientists endorse the viewpoint that global warming is a risk that should unite global leaders to come up with concrete solutions. 

So where does blockchain fit in the bigger picture? Is this technology really that bad for the environment? And is it capable of offering resolutions for this problem? 

In February 2021, US President Joe Biden announced a new plan to spend $2 trillion over a period of four years to make clean energy a priority and tackle climate change. The money will be invested in clean energy in various sectors, including transportation, electricity, and building.

Meanwhile, the UN’s Agenda 2030 pays special attention to ensure a cleaner environment. At least two of its 17 Sustainable Development Goals (SDGs) directly refer to cleaner energy and global warming:

  • SDG #7 — Affordable and clean energy
  • SDG #13 — Take urgent action to combat climate change.

So delivering sustainable blockchain technology is critical. 

Today, many critics point the finger at Proof of Work (PoW) blockchains such as Bitcoin, which requires huge amounts of electricity to perform the mining processes. Sites like Digiconomist measure how much electricity Bitcoin and Ethereum consume to maintain their networks.

As of today, the annual energy consumption of Bitcoin compares to that of Chile or Finland. Given that half of the miners operate from China, don’t expect that energy to come from solar panels — but it probably will in the future. 

In the end, Proof of Work is mostly about using electricity, which can be delivered through totally green power. One of the world’s largest BTC mining operations — Genesis Mining — already runs on 100% renewable energy.

Blockchain Can Be Eco-Friendly

While Bitcoin indeed requires a vast amount of energy, blaming blockchain for the energy consumption of Bitcoin is like blaming the Internet for Facebook’s personal data breaches. Blockchain has nothing to do with the carbon footprint — some blockchains use Proof of Stake or Delegated Proof of Stake approaches that are much more efficient than Proof of Work systems.  In fact, Ethereum’s move to ETH 2.0 should dramatically improve its carbon footprint (more about that below). Furthermore, blockchains are being used in many climate protecting areas. 

Use Cases

For example, PlanetWatch, has built and rolled out a global network of low-cost air quality sensors that can be adopted by conscious entities to validate, filter, and share data online or through a mobile app in real-time. This monitoring network is sharing real-time and historical data about air quality, being the first global blockchain to do so. 

(As a side note, PlanetWatch has also become the first blockchain firm to become part of the spin-off partnership program by CERN, which is the world’s largest and most reputable center for scientific research.)

Blockchain can also be used to ensure the execution of relevant agreements revolving around climate change. For instance, the Blockchain for Climate Foundation uses the technology to put the Paris Agreement on a decentralized and transparent network. The signees will use the platform to share national carbon accounts.


And it’s not just about use cases. Speaking about the infrastructure itself, newer versions of blockchains are much more eco-friendly, so to speak.

Even though Bitcoin is still the largest cryptocurrency by market cap, more developers, investors, and consumers are turning their attention to functional blockchains — the ones that can host smart contracts and decentralized applications (dApps). 

These DLT networks are performing much better than Bitcoin in terms of speed and scalability, and they don’t consume that much energy. Most of these newer blockchains adopt some version of Proof of Stake (PoS). So far, this is the best alternative to the energy-wasting PoW.

One of the most prominent blockchains, Ethereum, is also upgrading to adopt a PoS consensus mechanism to gradually replace the current energy-consuming PoW algorithm.

Another eco-friendly blockchain is Algorand, a public ledger that enables the creation of dApps and DeFi applications. Algorand uses the proprietary Pure Proof of Stake (PPoS) algorithm, which solves the so-called Blockchain Trilemma, i.e. it doesn’t sacrifice any of the three fundamental elements of an ideal blockchain: decentralization, security, and scalability.


We have discussed how blockchain is being used for combating climate change through its use cases and the improvement of consensus mechanisms. But blockchain companies can also show how much they care about the environment through their culture itself.

For example, AIKON, which focuses on ID management and the integration of PoS-based dApps through a better user experience, is openly expressing its support for a clean environment. The blockchain project uses 100% carbon neutral cloud hosting and has partnered with Ecologi to ensure that its carbon footprint is reduced. 

AIKON helps businesses to connect with the three best DeFi-oriented blockchains that rely on different PoS versions: Ethereum, Algorand, and EOS.

AIKON CEO Marc Blinder has previously encouraged the transition to PoS infrastructures as an alternative to PoW algorithms. At least, PoW miners could rely on green energy for mining. 

Speaking about the adoption of a clean environment attitude among blockchains firms, Blinder said:

Companies who want to keep their head above water — along with everyone else’s — have a moral imperative to deliver sustainable development.”

All in all, the blockchain industry is adopting more efficient and eco-friendly solutions for network operations, and more companies indeed realize the importance of maintaining a clean environment.

Are you ready to join the new trend of environmentally friendly blockchains?

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