It is well known that blockchains require large amounts of electricity to function securely. This is more common with blockchains that use the Proof-of-work (PoW) consensus mechanism, as they require large networks of energy-hungry cryptocurrency mining machines to cooperate to protect themselves from attacks.
How much does the BTC network consume in a year?
Current estimates show that the Bitcoin network consumes around 142 TWh of electricity per year and releases around 67,51 Megatonnes of carbon dioxide into the atmosphere. This is less than half of Greece's total carbon footprint.
Many network participants believe this is part of building a secure decentralized platform such as Bitcoin's decentralized payment network or Ethereum's application platform.
The amount of energy used by the Bitcoin network has seen it subject to significant criticism over the years and has even led to a ban on Bitcoin mining in Iran, with Bitcoin miners in the country reportedly consuming a large slice of the country's power generation and contributing to its recurring blackouts.
In particular, the CEO and founder of Tesla (Tesla shares - TSLA ticket) Elon Musk publicly attacked the cryptocurrency for its "insane use of energy" and stated that Tesla would no longer accept payments in Bitcoin. However, he revealed that Tesla will resume accepting Bitcoin payments once it is powered by more than 50% renewable energy, which may already be the case by some estimates.
While Bitcoin and Ethereum may take some time to build a predominantly green mining network or move to a more efficient consensus system, other projects are already approaching the problem from different perspectives.
New emerging ecological projects
Popcorn, a decentralized agriculture ecosystem, is looking to instill positive social impact with one of the fastest growing use cases for blockchain technology: decentralized finance (DeFi).
This project aims to create an altruistic movement in the DeFi space. It will help fund organizations that promote social good such as those involved in renewable energy, carbon capture and environmental education.
Popcorn is a yield breeding tool that allows users to automate their earnings across a number of DeFi platforms through a secure smart contract system.
Brokoli is another platform that seeks to address the environmental impact of cryptocurrencies. This is achieved by creating a “green Defi layer” on top of the existing Defi infrastructure. It helps maximize pricing efficiency and allows users to mitigate the impacts of climate change.
Brokoli's commissions are used 90% to positively influence the planet. This includes planting trees, funding renewable energy projects, and donating to charities for the recycling of electronic waste.
The environmental impact of cryptocurrency is becoming increasingly important. The blockchain and cryptocurrency industry is built on the idea of building a better system and has already shown that it can move quickly to address its shortcomings. Decentralized and climate-friendly platforms may soon become the norm.