When you hear “cryptocurrency”, the first thing that probably comes to your mind is bitcoins. Digital distributed cryptocurrency – there can be only 21 billion of these coins and to generate each coin, a lot of computation needs to be performed.
The process is known as mining. Mining is so computationally intensive that it exceeds the power of modern supercomputers by a multiple of thousand. The computation is usually performed using a global network of computers where usually anyone can start mining bitcoins by joining the network.
These days, mining is done mostly using AISCs. Chips that are designed to perform very specific tasks. In case of bitcoins, they perform hashing. It is so computationally intensive that the bitcoin network uses more electricity than the country of Bangladesh.
In a couple of years, around 2020, the bitcoin network will use more energy than the total electricity consumed by the world. Given that a lot of electricity is generated by fossil fuels, such as coals, it is a doomsday scenario for climate change.
Bitcoin already is having a great effect on global warming. However, the effects are being ignored as effects of the automotive industry is probably far more.
Moreover, if you compare bitcoins to the automotive industry, then you should know that presently, one year’s energy consumption of bitcoins surpass the energy consumption of a million transatlantic flights.
So, maybe, in the long run, bitcoins cannot be sustainable. But the technology that drives the bitcoin network maybe. It is called the blockchain. The blockchain is a global ledger where all the bitcoin transactions are recorded.
When Alice sends some bitcoins to Bob, there is no middleman involved. No bank, no third-party, or anything.
Their transaction is recorded publicly in this ledger that is distributed globally. This makes all bitcoin transactions auditable, brings in more transparency.
The Case of Blockchain Sustainability
This blockchain technology, on the other hand, can be sustainable. It can be used in areas outside bitcoin to bring in more transparency.
For example, if we use this to transfer energy instead of bitcoins. A company called Solar Bankers has developed their own blockchain technology called Skycoin.
Skycoin is quite a novel idea. Using the Skycoin platform, a lot of businesses can perform their own transactions. The coin they will use is called Suncoin. It is essentially a peer to peer energy trading system.
The idea is that you can generate (or gather) solar power. And if you do not spend the all of it, then you can trade it with others in terms of Sun coins.
The idea is literally disruptive to power companies. Instead of having power generation and distribution companies, individuals generate their own power and then they can trade this power across themselves.
There can be small communities of microgrids – something analogous to pool mining in bitcoins.
The ledger that will be used to monitor the trade is called the Skyledger using its own dedicated network, called the Skywire.
Skycoins model shows the blockchain does not necessarily have to be something anti-green in nature. It can power a lot of sustainable technologies too.