Bitcoin (BTC) is often used to criticize all blockchain-based projects. This is understandable since Bitcoin was the first projection to use a blockchain, is arguably the nigh recognizable and is the largest cryptocurrency by market place cap.

In the kickoff one-half of this article, I will use Bitcoin as a proxy for all blockchain-based projects considering almost people associate blockchain with Bitcoin. Anything environmentally positive that can exist said about Bitcoin will exist doubly true for the vast bulk of newer blockchain-based projects since Bitcoin uses the oldest version of blockchain technology.

Blockchain free energy consumption

Bitcoin has been attacked for high free energy consumption. Headlines pointing out that Bitcoin's electricity usage is comparable to a country's total consumption is a popular critique. Comparisons are useful, simply they can take a deceptive framing effect. For example, the statistics most oftentimes cited in these attending-grabbing headlines are taken from the Cambridge Middle for Alternative Finance (CCAF). The same organization too points out that transmission and distribution electricity losses in the U.s.a. could power the entire Bitcoin network 2.2 times. E'er-on electrical devices in America eat 12.1x more energy than the Bitcoin network.

So, the Bitcoin network uses equally much electricity as a small country or far less than ane sliver of America's free energy budget. Is that a lot? It depends on how you look at information technology.

Related: Is Bitcoin a waste of free energy? Pros and cons of Bitcoin mining

Another often used critique is that Bitcoin'southward electricity consumption is growing so rapidly that Bitcoin emissions alone could push global warming above 2°C, or consume all of the earth's free energy by 2022. The latter didn't happen. Why? First, like most network-based technologies, Bitcoin is following an adoption curve divers by the theory of improvidence of innovations — an "S curve."

The explosive, exponential-like growth in the first half of the curve slows down considerably in the latter half. Second, large and anticipated improvements in reckoner efficiency will continue to lower the free energy cost of computing even equally Bitcoin's growth slows. Third, such predictions don't accept into account the evolving energy mixture of Bitcoin.

Blockchain energy mixture

Virtually all of the free energy consumed past blockchain projects come up from electricity used by computers that secure the network. Bitcoin calls these "miners," but newer blockchain projects can use much more efficient "validators." Electricity is produced from many different sources, such as coal, natural gas and renewables similar solar and hydroelectric. Those sources can create very different levels of carbon emissions, which largely determines their environmental affect. The ii most prominent estimates of Bitcoin's energy from renewables range from 39% in this report to 74% in this report. Either of these estimates is "cleaner" than America's free energy mixture, which is just 12% from renewables.

There is bear witness that the public scrutiny to which Bitcoin has been subjected has almost likely ensured that free energy from renewables will only increment in the future.

Blockchain is worth it

Bitcoin's energy consumption and composition are not perfect, nor is it equally terrible as is oft reported. What is ofttimes lost in the conversation over Bitcoin's energy usage is whether Bitcoin's use of energy is worthwhile. Plenty of industries require energy or produce massive amounts of waste, but almost people deem the environmental costs to be worthwhile. The agricultural industry requires massive outlays of fossil fuels for fertilizers and to power field equipment, not to mention producing harmful runoff. However, despite the ecology negatives, we recognize the overwhelming importance of growing food. Instead of discarding agronomics, we strive to improve the environmentals of agriculture.

Related: Light-green Bitcoin: The touch on and importance of energy use for Prisoner of war

Whether enabling the one.7 billion unbanked to gain financial inclusion or offering an alternative to predatory international remittance services, it seems clear to me that Bitcoin is worth the energy usage. It'south even clearer that enterprise blockchain is an unmitigated public practiced.

Newer, alternative blockchain engineering uses at least 99.95% less energy than older ones. Enterprise blockchain can use even less energy since information technology can be tailored for specific apply cases. In addition to using significantly less free energy, Enterprise blockchain is helping organizations accomplish sustainability goals.

Blockchain as a fundamental driver for renewable free energy

Solar and air current are at present cheaper than fossil fuels such as coal and natural gas. Solar and wind are now comparable to geothermal and hydroelectric. Despite solving the cost trouble, renewables accept several problems preventing mass adoption. Geothermal and hydroelectric are geography bound. Solar, wind and to a lesser extent, hydroelectric suffer intermittency and grid congestion. Intermittency means they are currently likewise unreliable. There'south no sun at nighttime, the air current sometimes stops, and there are rainy and dry seasons. Filigree congestion is similar to car traffic. Due to geographic constraints, renewables are ordinarily built in rural areas. Yet, near energy is needed in dense towns and cities. Like a machine in a traffic jam, the electricity is delayed getting to its destination.

There are solutions, such every bit edifice bombardment storage and increasing transmission capacity, only these are expensive infrastructure projects. This is where Bitcoin, and blockchain, in general, tin help. Unlike Bitcoin miners and other blockchain projects tin can exist built anywhere. They're assisting businesses so they can essentially subsidize the edifice of renewable infrastructure by e'er using excess free energy produced.

Related: No, Musk, don't arraign Bitcoin for dirty free energy — The problem lies deeper

Another promising energy technology well suited to blockchain is person-to-person (P2P) electricity trading. These energy sharing schemes provide electricity suppliers and consumers with the opportunity to merchandise energy without the need for existing third-party intermediaries while increasing the level of renewable energy. Similar to renewable infrastructure, blockchain-based projects will incentivize the development of P2P energy grids.

Blockchain enables material procurement and provenance

Consumer demand for more than ethically sourced products is steadily increasing. Companies accept to prove that their production is produced in such a way that protects the environs and public health, and is made ethically. Consumers wary of greenwashing, have had to rely on data provided by companies. Blockchain-based projects are already changing this dynamic.

Everledger has created tools to increment consumer and enterprise insight into the provenance of a given object. By combining blockchain, AI and IoT, Everledger digitally streamlines compliance processes and allows companies to demonstrate the true origin of their products.

Transparency and traceability will be crucial to fostering consumer trust in nutrient supply bondage. Supermarket giant Carrefour and the world'due south largest brewer AB InBev partnered with enterprise blockchain developer SettleMint to deliver a digital traceability solution that utilizes dynamic QR codes attached to a product during the packaging procedure.

Dark-green financing

Dark-green financing is the utilise of loans to support sustainable companies and fund the projects and investments they make. It will exist crucial to close the $2.5 trillion almanac SDG funding gap, which is estimated to grow bigger. A good example of green financing is the green bond (GB) marketplace. Co-ordinate to the Climate Bonds Initiative, $269.5 billion in GBs were issued in 2022.

Unfortunately, GBs are non without problems, such as confirming that sustainability metrics are accurate, or that funds were used to support sustainability. Blockchain can immutably store this data, thus, projects can be verified to satisfy sustainability requirements. Blockchain can assist in other ways as well, similar tokenization.

Related: How will blockchain technology assistance fight climate change? Experts answer

Oi Yee Choo, chief commercial officer at iSTOX, a Singapore-based digital securities exchange, said in this interview: "Even in markets where the demand for dark-green bonds is loftier because investors are motivated by ESG considerations, tokenization helps investors diversify their portfolio across different bonds considering of smaller subscription sizes."

The blockchain industry is currently far from ideal in terms of ecology sustainability. However, if it maintains its electric current trajectory, the blockchain industry will not only be an exemplar but an enabler of environmental sustainability.

The views, thoughts and opinions expressed here are the author's lone and do non necessarily reflect or represent the views and opinions of Cointelegraph.

Matthew Van Niekerk is a co-founder and the CEO of SettleMint — a low-code platform for enterprise blockchain evolution — and Databroker — a decentralized market place for data. He holds a BA with honors from the University of Western Ontario in Canada and as well has an international MBA from Vlerick Business School in Kingdom of belgium. Matthew has been working in fintech innovation since 2006.