Cryptocurrencies, NFTs, web 3.0: behind blockchain technologies, what is affecting the planet?

Hen say 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 blockchains are seen as both an Internet revolution and a potential threat to our environment. Will they save or destroy our planet? Probably none. However, their effect is not neutral and attention should be paid to this.

Blockchain technologies have been developed since 2008. They enable peer-to-peer data exchange, horizontal verification and storage of this data. It is a transactional database based on a central principle: the consensus mechanism. In order for a transaction to be confirmed, the majority of computers on the network must confirm it. By definition, there is no centralized intermediary, but multiple terminals that act as relays and verifiers of exchanges.

Public interest in blockchains coincides with the appearance of bitcoin. This cryptocurrency, by definition, does not depend on any central bank. Therefore, its course is more variable, because it is not subject to any regulation. But it was so successful that some countries like El Salvador adopted it as their national currency.

Operation that requires power

Since this is the star currency, we do not count the use of blockchains today. They guarantee reliability and durability for signing a contract, hosting a site, even certifying a diploma. However, as their use has increased, alarming articles and studies have appeared on their impact on the climate.

The most famous and most discussed example is bitcoin. Several terminals compete to “verify” and thus secure each transaction of this virtual currency. A set of operations is called a “block”. To confirm a block in a new transaction, computers must solve a complex equation, and the fastest will win a cryptocurrency prize. To verify that the user is “honest” in this chain, he must make an effort to solve the equation. This is called a verification technique proof of work “, or proof of work, requires computers with large computing power … And therefore large electricity consumption.

Thus, bitcoin “mining farms” were born. Away from the village aspect, they are rooms or warehouses with several computers dedicated to solving the “block”. The effect between the consumption of computer equipment and cooling networks is not insignificant. According to figures from the University of Cambridge on bitcoin’s energy consumption, mining the cryptocurrency requires as much electricity per year as Pakistan and its 225 million people – 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

In order to “mine” and make a profit from it, you need to find cheap electricity. However, countries with low-cost energy often still rely on highly polluting fossil fuels. In the Bitcoin mining map, we mainly find USA, China and Kazakhstan. Most of the electricity generation in these countries comes from oil, coal or gas. Still, according to Cambridge University estimates, bitcoin will account for 0.09% of global greenhouse gas emissions. That’s roughly the size of the Central African Republic or Nepal.

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

Without changing anything for users, this new method makes time-consuming mining techniques obsolete. Through the contract – which is presented on the blockchain – the user agrees to invest cryptocurrency capital, guaranteeing that they will perform the block verification work honestly and in sufficient quantity. If he does not fulfill his part of the contract, the money can be taken from him. So, there is no need for heavy calculations to prove the trust in the currency: “Ethereum’s energy costs are roughly equivalent to the cost of running a modest laptop for each node on the network” It welcomes Ethereum on its website. But it is difficult to envisage a change in the technology of Bitcoin, the most important cryptocurrency. This requires a decision based on user consensus, which is already difficult to achieve. People who invest in computers – sometimes large amounts – to master them certainly don’t want to let them gather dust.

Important technology?

Like other uses of blockchain, we need to put bitcoin in context: they are tools. More or less essential tools. For example, we use intangible and unique works – images, sounds, videos, etc. – we can question the need for NFTs (non-fungible tokens) that are uniquely coded and allow registration on the blockchain. It’s ultimately a way to speculate about the 2.0 art market… without contributing anything to society.

But blockchain can also ensure the continuity and stability of a site or information. “You have to separate the impact question from the blockchain concept, which is very interesting. It has this decentralized aspect that makes it robust with its proof system and traceability. In the future world, which will certainly be more chaotic, this ensures better system sustainability.”predicts Frédéric Bordage, founder of the Green IT association, which is interested in digital vigilance and responsible digital technology.

Although he thinks so “Bitcoin has often been an energy orgy”he says he is not “not too afraid” about blockchain’s impact on the future environment. “There is a ‘buzz’ around certain uses, and even if we are grilling the digital resource during this time, it will stabilize and have concrete benefits in people’s lives.” »

Blockchains cannot be owned by anyone and thus are more secure than transactions or data storage held by large companies – this data collected and stored by “GAFAM” (Google, Amazon, Facebook, Apple, Microsoft, etc.) is the strategy of these companies. compassion, ethics or carelessness of their leaders. Transactions on the blockchain are also a guarantee of transparency: everyone can access this information. Based on trust, they can use an infinite number of times. According to the researchers, by keeping a carbon register, it can be used, for example, in the implementation of the Paris Agreement.

“The problem is not blockchain as a concept. This is how we get it, Supports Frédéric Bordage. What will we do with it? What will economic actors do with it? That’s the question. » The impact of blockchains is still small, but it should not make us forget today’s big polluters. Banks pollute more than any cryptocurrency.

“The carbon footprint of the big French banks is about 8 times the greenhouse gas emissions of all of France. This was reported by Oxfam France. At the current exchange rate, [elles] lead us to +4°C warming by 2100”. In addition to depending on it, they continue to finance fossil fuels year after year. This should not be a distraction from the discussion of new blockchain technologies. A real revolution or a house of cards, they will have to follow them… Not forgetting to pay attention to the pollution of the industrial era, which is still very massive.

Emma Bougerol

Featured image: Cryptocurrency mining CC BY 2.0 Marko Ahtisaari via Flickr