Blockchain Environment Tech

Blockchain and Environment: What’s the Correlation?

When we hear the word “blockchain” we imagine bitcoin, distributed ledgers, smart contracts, transparent transactions, and much more. People rarely think about the environment in connection to the blockchain. Meanwhile, the correlation exists, and it’s more obvious than some people may think. In fact, sometimes, it’s slightly disturbing.

In the way blockchain is used today, it has a substantial environmental cost. The key resource needed for blockchain to function is encryption. Encryption provides the security, which lies in the foundation of the blockchain. In order to prove that the user has the right to work with the chain, the system requires running complicated algorithms. These algorithms don’t just run on their own. They require formidable amounts of computing power. Such power comes at a certain cost.

The simplest and the most power-consuming example of using blockchain is bitcoin. The power required to keep the network running is enormous. Considering the market capacity of over $180 billion, the security is essential. Smaller blockchains consume less energy but the amounts are still formidable. The environmental implications of such use are unfortunate.

The usage of electricity is truly enormous. A year ago, the power consumed by the bitcoin network exceeded the power consumed by the entire Republic of Ireland. The demands of the blockchain grow on a regular basis. Experts from predict substantial growth of the power use in the future. The bitcoin network alone uses over 42Twh of electricity per year, making it more demanding than New Zealand and Hungary.  Such consumption is similar to 20 megatons of CO2 emissions or 1m transatlantic flights.

Considering the growth forecasts and worldwide use of cryptocurrencies, blockchain’s effect on the environment could become dangerous. In the future, blockchain can cause climate changes.

While the energy consumption correlation to blockchain is hard to argue against, researchers have come up with a few ways blockchain can help save the environment rather than ruin it.

1. Recycling Programs

Recycling programs are rarely interesting to people. The responsibility for running them falls on the city government. Some smaller towns don’t have these programs at all. Tracking and checking the impact of these programs is difficult.

Creating a recycling program on blockchain may encourage participation since it can have a financial incentive.

Currently, there is a project RecycleToCoin being developed to help people exchange used plastic containers for tokens in automated machines.

2. Environmental Treaty Compliance

Tracking the impact of environmental treaties is often complicated. Sometimes the governments don’t keep the promises due to the lack of incentive. The frequency of fraudulent actions and data manipulation in that area is overwhelming.

Blockchain can keep the organizations and corporations from avoiding their environmental promises by making their actions transparent. Blockchain could track the environmental data and show where the commitments are met.

Storing documents on blockchain keeps them there forever. The global carbon credit scheme can be kept transparent and fraud-free.

3. Non-Profit Organization Tracking

When people make donations to keep the environment safe, it’s often hard to track where the money actually goes. Sometimes, corruption and bureaucracy send the funds to other channels. Blockchain can make sure the money is used for what it should be. The lack of a third party eliminates the disappearing of the funds “along the way”.

Blockchain can automatically send the money to the right parties and track the meeting of environmental goals. Today, there are two charities working with blockchain, Bitgive and Bithope.


Overall, the negative impact of blockchain on the environment is hard to overlook. However, it may help reduce our carbon footprint as well.