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Blockchain technology has, for a decade now, been promising to be a force of good in the world by reducing corruption, removing middlemen (and their costs), promoting open governance, and even ushering in a more sustainable global economy. Though these promises have seen some fruition, the technology still sees heavy criticism for its negative environmental impact. Mostly because “mining” bitcoin, and other Proof-of-Work cryptocurrencies, requires a lot of computing power and thus a lot of electricity usage. This is a moot point since making fiat money also consumes a lot of electricity, from printing paper money to transporting, to maintaining bank retail locations, and so on. Still, in this noise about the environmental cost of mining crypto, blockchain’s beneficial impact on advancing the use of green energy is being largely overlooked.
Have you heard of carbon trading? No? Well here’s the tl;dr: it’s where companies can buy carbon credits to “offset” the carbon they use. Now, at least in some places, there is a simple way to buy Renewable Energy Certificates (RECs) powered by blockchain technology. With this, blockchain technology makes this easier and cheaper for companies to purchase RECs because there is no need for anyone to centrally verify transactions (plus, every transaction is transparent — blockchain innovator’s dream).
There are also a number of blockchains trying to help people sell excess electricity to their neighbors (and buy too, of course). Australia-based Power Ledger is one of those companies trying to create a peer-to-peer network of trading electricity using blockchain technology. They aim to promote clean energy, too. Power Ledger has already expanded into Asia and the United States.
Solar panel producer, Restart Energy, is using blockchain tech to sell franchises (the McDonald’s of energy? We’ll see, we’ll see). WePower is using blockchain technology to create a crowdfunding platform for renewable energy. Again, remains to be seen if this will be the Kickstarter of renewable energy.
Ultimately, it’s about what blockchain technology is: a technological, social, and economic breakthrough that makes processes cheaper, more transparent, and more trackable. Green energy has a lot of stigma in each of these three categories. By convincing both consumers and businesses (let alone, government agencies) that renewable energy production and trading can be done cheaply and effectively, blockchain technology companies can push through the big shift away from reliance on fossil fuels that’s been coming for decades.
This does not mean that anything with a “blockchain” label is automatically good or effective. When looking at companies using blockchain technology for the advancement of the green economy, it’s important to dig beyond the marketing taglines and make sure there is a clear purpose (and advantage) to using blockchain technology in that specific use case. Similarly, does the problem the company is claiming to solve actually need solving? Is their plan realistic? Are their enough experts in renewable energy on the team?
Moreover, just because a blockchain company is working on making renewable energy more accessible does not necessarily offset electricity costs of mining that company’s token (if it has one). Moving from Proof-of-Work to more environmentally efficient “mining” methods, such as Proof-of-Stake, could help reduce electricity costs, though each method has its own advantages and disadvantages. Regardless, blockchain technology is real and powerful, and using it to advance a future where all energy is renewable is a worthy cause indeed.
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