- Not all blockchains are energy-guzzling
- Blockchain can expand renewable energy market access
Bitcoin’s price plunge, alongside Elon Musk’s comments about its power consumption, has magnified the world’s attention on the cryptocurrency and its environmental impact. Yet blockchain technology could be very useful for a green future.
Bitcoin, based on blockchain infrastructure, involves solving computationally intense equations in so-called proof-of-work (PoW) protocols to validate transactions. But other blockchain protocols require far less power. For example, Energy Web’s blockchain runs on so-called proof-of-authority (PoA). This means that pre-selected entities validate blocks based on identity, staking reputation and not energy.
These PoA blockchains should play an important role in clean energy, providing traceability and tokenization. They could support and expand distributed solar markets, enabling small power purchase agreements or trades. Companies, such as MojoPower, Mytilineos and QEnergy are already doing this. Blockchain is also useful for certifying carbon credits and tracking green supply chains.
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