Cryptocurrencies, NFT, web 3.0: behind blockchain technologies, what is the impact on the planet?

On says that they are the only future of the Internet, or they are talked about as a passing fad. Often associated with cryptocurrencies, NFTs, web 3.0… Blockchains, or block chains, are shown to be both an internet revolution and a potential danger to our environment. Will they save or destroy our planet? Probably neither. But their influence is not neutral and deserves to be addressed.

Blockchain technologies have been developed since 2008. They make it possible to exchange data peer-to-peer, verify and store this information horizontally. It is a transactional database, based on a central principle: the consensus mechanism. To validate a transaction, most computers on the network must validate it. By definition, there is no centralized intermediary, but a multitude of terminals that act as relays and verifiers of exchanges.

Public interest in blockchains coincides with the emergence of bitcoin. This cryptocurrency, by definition, does not depend on any central bank. Therefore, its flow is more unstable, as it is not subject to any regulation. But it was so successful that some states, like El Salvadoradopted it as their national currency.

Operation hungry for energy

Since this star coin, we no longer count the uses of blockchains today. To sign a contract, organize a page, even certify a degree, they guarantee confidence and durability. But, along with the multiplication of their uses, alarmist articles and studies in their climatic impact have appeared.

The best known and most discussed example is bitcoin. In order to “verify” and thus ensure every transaction of this virtual currency, several terminals compete. A group of transactions is called a “block”. To validate a block in a new transaction, computers must solve a complex equation, and the fastest will win a cryptocurrency reward. To verify that the user is “honest” in this chain, he must attempt to solve the equation. This verification technique, called work certificate “, or proof of work, requires computers with a large computing capacity… And therefore a large consumption of electricity.

This is how bitcoin “mining farms” were born. Far from the rural aspect, they are rooms or huts, with several computers dedicated to solving a “block”. Between the consumption of computer equipment and cooling networks, the impact is not negligible. According to Cambridge University figures for bitcoin’s energy consumption, mining this cryptocurrency requires as much electricity per year as Pakistan and its 225 million inhabitants – or about 93 terawatt-hours (tWh) per year. On the other hand, this is less than the annual consumption of refrigerators in the United States (about 104 tWh).

Fossil fuels and solutions

To “mine” and profit from it, it is necessary to find low-cost electricity. However, countries with low-cost energy are often those that still rely heavily on highly polluting fossil fuels. IN bitcoin mining map, we find mainly the United States, China and Kazakhstan. Most of the electricity generation in these countries comes from oil, coal or gas. However, according to estimates from the University of Cambridge, bitcoin would represent 0.09% of the world’s greenhouse gas emissions. That’s almost as much as the Central African Republic or Nepal.

Not all blockchains consume as much as bitcoin. Blockchain Ethereum, for example, a cryptocurrency and a platform for NFTs, “smart contracts” (smart contracts), and other applications, consumes much less. Its currency is the main competitor of bitcoin. On September 15, 2022, Ethereum released an update that changes the way it works. “Ethereum’s energy consumption has dropped by around 99.95%, making Ethereum a green blockchain”can we read on his page. How? By changing the way of verification, from “proof of work” (used by bitcoin) to “proof of stake”.

Without changing anything for users, this new method makes the time-consuming mining technique obsolete. Through a contract – present in this blockchain – the user agrees to invest a cryptocurrency capital, guaranteeing that he will perform the work of verifying the blocks honestly and in sufficient quantity. The money can be taken from him if he doesn’t do his part of the contract. Thus, there is no need for heavy calculations to prove the trust in the currency: “Ethereum’s energy expenditure is roughly equivalent to the cost of running a modest laptop computer for each node on the network.” welcomes Ethereum to its site. But it is difficult to predict a change in the technology of the most important cryptocurrency, bitcoin. This would require a user consensus decision, which is already difficult to obtain. And the people who have invested in computers – sometimes large amounts – for mine, surely have no desire to let them gather dust.

An essential technology?

We need to put bitcoin, like other uses of blockchain, in context: they are tools. More or less essential tools. For example, we may question the need for NFTs (non-fungible tokens), which make it possible to obtain intangible and unique works – images, sounds, videos, etc. – encoded in a unique way and recorded in a chain. It a way to speculatefinally, an art market 2.0… without much contribution to society.

But blockchain can also ensure the durability and stability of a site or data. “You have to separate the question of impact from the concept of blockchain, which is very interesting. With its proof system and its traceability, it has this decentralized aspect that makes it resilient. In the world to come, which will surely be more chaotic, this ensures a better stability of the system.”predicts Frédéric Bordage, founder of the association Green ITwhich is interested in digital prudence and responsible digital technology.

Although he thinks that “Bitcoin has been an energy orgy for not many”says that there is none “Not too scared” on the future environmental impact of blockchain. “There is ‘buzz’ about certain uses, and even if we grill the digital resource during this time, it will eventually stabilize to get a concrete benefit in people’s lives.” »

Blockchains cannot belong to anyone, and therefore are much more secure, unlike transactions or keeping data in the hands of large companies – this data collected and stored by “GAFAM” (Google, Amazon , Facebook, Apple, Microsoft, etc.) are at the mercy of the strategies of these companies, the ethics or the lack of scruples of their leaders. Transactions carried out on a blockchain are also a guarantee of transparency: everyone can access this data. Based on belief, they can have an infinite number of uses. They can, for example, be placed in the service of the implementation of the Paris agreementthe researchers suggest, keeping a carbon log.

“The problem is not blockchain as a concept. This is how we will achieve it, supports Frédéric Bordage. What are we going to do with it? What will economic actors do with it? That is the question. » The impact of blockchains is still marginal, and yet it should not make us forget today’s big polluters. Banks pollute more than any cryptocurrency.

“The carbon footprint of the big French banks represents almost 8 times more than the greenhouse gas emissions of the whole of France. reports Oxfam France. At the current rate, [elles] leads us to a warming of +4°C by 2100.” Besides being addicted to it, year after year, they continue to finance fossil fuels. The debate over these still new blockchain technologies should not serve as a diversion. Real revolution or house of cards, they will have to be seen… Not forgetting to keep an eye on the pollution of the industrial age, which is still very massive.

Emma Bougerol

Image of a: Cryptocurrency Mining Farm CC BY 2.0 Marko Ahtisaari via Flickr

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