Sustainability Concerns in the Usage of Blockchain, NFTs, and Web3 Technologies

The distributed, decentralized system known as blockchain, which is used to validate cryptocurrency transactions and track ownership of NFTs, calls for a significant amount of computational power and electricity. The environmental effect of blockchain has also been increasing as the NFT market and other Web3 technologies proliferate.

The motivation to build massive server farms or Bitcoin "mines" is strong. The greatest cryptocurrency in the world, Bitcoin, is predicted to use 150 terawatt-hours of power annually, which is the same as Argentina's total consumption. That much energy production results in yearly carbon dioxide emissions into the atmosphere of about 65 megatons.

However, the industry will need to discover methods to be more sustainable as society's need for Web3 technologies continues to expand in order to prevent new technology from slowing down our efforts to address climate change.ng as the NFT market and other Web3 technologies proliferate.

Let's examine several potential pathways for the transfer of blockchain, cryptocurrencies, and NFTs to greener technologies and more sustainable energy sources.

How to Curtail the Effects of Blockchain Technology

Here are several strategies for making NFTs, cryptocurrency mining, and blockchain technology cleaner and more environmentally friendly:

Embracing blockchain technologies that use less energy.

The majority of the most well-known cryptocurrencies rely on "proof of work" or energy-inefficient techniques for solving problems. In POW systems, miners compete to solve problems the quickest in order to earn cryptocurrency rewards. These kinds of POW systems consume a lot of energy.

On the other hand, "Proof of Stake" systems depend on market incentives, and "validators" put down a stake (a deposit) in return for the ability to add blocks to the blockchain. According to reports, utilizing proof of stake (POS) to eliminate competition from the system requires 99.9% less energy than proof of work, resulting in a reduction in carbon emissions. The second-largest blockchain, Ethereum, has made the switch from a POW to a POS system with success.

Adoption of renewable energy sources

The use of solar energy and other green energy sources while mining is a blatant approach to increase the sustainability of blockchain.

One of the biggest miners in the world, Genesis Mining is situated in Iceland and offers cloud mining for Bitcoin and Ethereum using only renewable energy.

New blockchains might theoretically provide incentives for utilizing green energy because every blockchain user designs their own miner compensation mechanisms.

Some countries clearly benefit from renewable energy, despite the fact that it might be challenging to store. For instance, hydroelectricity accounts for virtually all of Paraguay's energy needs. The carbon footprint of bitcoin produced in this nation will be smaller than that of countries that rely heavily on fossil fuels.

How Blockchain Might Be Useful in the Fight Against Climate Change

According to some experts, blockchain might be the secret to sustainability advances that can aid in the battle against climate change. The technique could be beneficial for measuring product sustainability and monitoring pollutants.

Furthermore, blockchain technology may potentially speed up the introduction of renewable energy in poor nations.

"The world has to virtually halve emissions over the next eight years to stay on pace for a 1.5°C future, while at the same time extending access to electricity to bring hundreds of millions of people onto the grid," says Mark Radka, Chief of UNEP's Energy and Climate Branch. Through the effective use of data, blockchain technology may contribute by enabling more precise load monitoring, generation, and distribution in the grid.

The Greening of Blockchain

As academics and developers work to become more environmentally friendly and less harmful to the environment, the blockchain, NFT, and Web3 areas will confront several difficulties. The fourth industrial revolution may be made more sustainable by using renewable energy sources and transitioning to mining methods that are really sustainable.