With the latest ECB climate risk testing routines that will take place in the banking world next year, many businesses could face potential issues. Modern world forcing companies to really care about nature and become in fact sustainable.
We won’t surprise anyone by saying that blockchain technology consumes an innumerous amount of energy and keep on constantly increasing that. Say, everyone’s beloved bitcoin or BTC uses more electric power a year than the whole of 🇸🇪Sweden.
A major reason for that is the so-called proof-of-work (PoW) mechanism that requires huge maths computations growing with the size of the network. Such massive calculations obviously require solid energy sources that currently can be found primarily among nonrenewable resources. These sources are defo non-eco-friendly causing a significant impact on our living environment.
So what can be done to minimize the ecological impact of blockchain-based systems and to make those eco-friendly? Actually, there are several options that multiply the outcome while used simultaneously:
- usage of renewable energy sources such as solar, wind, hydro or geothermal;
- switch to alternative effective mechanisms such as proof-of-stake or proof-of-history;
- move blockchain transactions off the chain, say to a sidechain;
- increase the effectiveness of hardware (quantum computers).
All these measures can not only minimise the climate impact but also significantly improve the effectiveness of the software solution itself. As a result, this will not only mitigate the risk of possible sanctions from the central banks but also can bring in solid financial effects. So why not take a ride on the 🌱green side?!
Do let us know if you want to know more regarding this matter.