Blockchain, crypto-currencies, nodes, ledgers, are just some of the most popular terms in the field of new technologies. Yet the meaning of these terms can often be unclear. Let's try to understand them by answering some of the most common questions in this area. What is the blockchain ? How it works ? What are its main benefits ? But above all, what is its environmental impact ?
The Blockchain : What is it ?
The blockchain is an innovative technology that makes it possible to store and transmit information transparently, securely and without a central control body. It uses cryptography to track transactions between different parties.
This may seem like a simple definition, but it encompasses four major components that make blockchain, the main actor of the digital revolution. This is decentralization, possible thanks to the absence of intermediaries and central authorities. Transparency and security of shared public archives. As well as the impossibility to modify the stored information, guaranteed by an encrypted and incremental operation tracking system.
It is for this reason that the blockchain can be used for transfers of assets (currency, securities, shares ...). Either for better traceability of assets and products or to automatically execute contracts.
Bitcoin is the best-known use case of the blockchain. It designates both a secure and anonymous payment protocol and a cryptocurrency.
Blockchain : How it works ?
When a user completes a transaction through the blockchain network, it is bundled with other related transactions within a block.
Then it is checked and validated by members of the network using cryptographic techniques. This step, called mining, verifies its authenticity and ensures that its structure is correct and consistent with previous ones already recorded.
Once validated, the block is timestamped and added to the blockchain. The operation becomes visible and accessible to all users. On the other hand, it can no longer be modified, even in the event of an error.
The validation of a transaction is almost immediate. It may however vary according to the importance of the operation carried out.
The Blockchain is considered very energy-intensive because of its mining protocol called "Proof of Work". A mechanism that adjusts the difficulty of the problems to solve according to the computing power of the network.
In other words, the more minors there are, the more complex the block to solve, so that the energy needs are greater.
Blockchain and Environment
The mining of crypto-currencies and the negative environmental impacts associated with it have been on the news in recent months. It is true that it is estimated that the production and storage of bitcoins today represent the consumption of nearly 3 million American households.
However, It is important to note, that energy consumption to produce a bitcoin is lower than that required for the production (equal value) of gold or oil.
Minerals whose possible ways of improving extraction are slim. Their recipe has been the same for decades unlike the blockchain which is an innovative technology at the beginning of its potential and therefore its ability to become eco-responsible. The reduction of its environmental footprint is in fact at the heart of the stakes of its development.
Let's not forget the digital pollution and the impact of our economy on the planet. Today, send / receive an email, make a payment or even search the internet pollutes !
But the real problem is that the blockchain is energy intensive ? Or that the percentage of fossil fuels in global energy consumption is currently 85% ?
Knowing that the causes of air pollution are mainly related to the ignition of fossil fuels (coal, oil and gas). I think it would be better to be concerned about the transition to clean and renewable energy, rather than condemn a technology that can offer solutions for the future.
How can Blockchain help the environment ?
The blockchain can be applied in an infinite range of sectors. Thanks to its unmodifiable structure, which makes interference virtually impossible. The blockchain can become an innovative and multifunctional platform for the exchange of data, contracts and any other type of information. It can be used in areas very different from the payments.
Blockchain in the Supply Chain Management
Using the blockchain to trace the path of a product can be a useful practice. It could allow us to ensure that each phase of the supply chain is transparent. As well as giving consumers the opportunity to view non-editable product information, and enable them to make more environmentally friendly choices.
Good recycling practices could be rewarded thanks to the blockchain
Many people still doubt that recycled waste is properly treated. The blockchain could be used to launch a system allowing citizens to trace their course. Using cryptography to create a certified and secure waste tracking program. The most responsible citizens could also be rewarded in return for their recycling.
Peer-to-peer energy exchanges to protect the environment
A blockchain-based energy sharing platform could help businesses and families achieve great results by investing in renewable energy facilities. Thanks to peer-to-peer technology, we already share music, movies, books and video games. So why not also consider sharing energy to help the environment ?
The blockchain therefore actively promotes the creation of green energy in a world where it is not yet possible to store surplus energy.
In general, and for the sake of economies, blockchain projects (especially mines) settle in areas of energy surplus. Often hydroelectric plants that run at full capacity and produce "too much" energy for sparsely populated areas. This is particularly the case of a mining company from Nantes, France (Bigblock), that went to settle in Kazakhstan.