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Crypto-blockchain use cases to improve the energy transition

For several years, Bitcoin and most other crypto-assets have been the subject of regular controversy over their energy costs.

As reported in our previous article on the , the ecological footprint of blockchain technology is directly linked to its operation, especially when the technology is based on the proof-of-work consensus protocol.

The most recent example of this was Elon Musk’s in May. Musk announced that he was withdrawing Bitcoin as a means of payment for Tesla cars due to the excessive use of carbon energy by the network’s miners. Such a decision has greatly revived the debate on and crypto-assets in general.

This highlights the need to pursue initiatives to optimise the energy cost of crypto-assets. To this end, many projects have already taken on the task of reducing the environmental cost of crypto-assets.

Blockchain project leaders are gradually becoming the keystone of many innovative environmental initiatives aimed at facilitating compliance with sustainable development by the various economic actors.

This article briefly presents these different projects facilitating the ecological transition. It does not aim to question the energy consumption of the crypto-blockchain industry, but it does bring a new angle to the debate on the environmental footprint of crypto-assets.

The growing interest in blockchain projects in the energy transition

Reducing e-waste

Reducing e-waste is a major challenge for sustainable development. According to a report published by The Global e-waste statistics partnership, The production of electronic tools for the technology industries (AI, Machine Learning, Deep Learning, Big Data, …) has an imposing environmental cost. The same applies to the production of digital objects used in everyday life.  

Blockchain technologies appear to be an effective tool for reducing the volume of electrical and electronic waste produced. creating a decentralised network for sharing computing power, where anyone (computer, smartphone, tablet). This would eventually allow the use of all existing hardware and thus reduce the environmental impact of digital objects.

Transparency of the supply chain and procurement

Public blockchain networks enable real transparency when used in supply chains. This has several advantages, such as simple tracking for the end consumer, giving him more power to decide, or a significant reduction in fraud. In 2019, the AAC (Administrative Assistance Cooperation system) – – received 292 requests for assistance on food fraud in the EU. , a French project, helps reduce fraud by certifying the origin of green energy. Its decentralised network and sensors placed on production sources (wind turbines, photovoltaic panels) . In 2020, Tampax joined the project, which enabled the end consumer to ensure the traceability of tampons. By scanning the barcode, the cotton origin of the tampons is displayed. This transparency is a pressure tool for the consumer who wants eco-responsible products. , a French company, provides complete transparency of logistics networks through the use of responsibility tokens. It therefore enables its users to avoid losses and negligence on their networks, losses which have a high ecological cost.

Decentralisation of electricity supply

Electricity generation is undergoing a major paradigm shift. Previously highly centralised, more and more small producers are now able to generate electricity thanks to the democratisation of access to solar panels. The decentralisation brought about by blockchain technologies will ensure the creation of decentralised electricity distribution networks allowing users to be producers and consumers and reducing the path of this distribution. In this context, two neighbours could send and receive electricity to each other. In Canada, Alectra Utilities has set up a pilot project with IBM’s Hyperledger blockchain to experiment with decentralised electrification. In France, has also created a collective self-consumption service for photovoltaic energy.

In May, Australian company Power Ledger announced a partnership with Thai Digital Energy Development to create in the country. The blockchain-based platform will facilitate the use of renewable energy by marketing environmental products (carbon credits and renewable energy certificates) and selling energy on a peer-to-peer (P2P) basis.

Tokenisation of carbon allowances

In 2005, the European Union created the EU Emissions Trading Scheme (EU ETS), allowing companies to buy or sell emission allowances based on their CO2 output. Large energy-using companies are the main customers of the EU ETS. The CO2IN project, which is still in a pilot version, aims to allow citizens, small businesses and municipalities to buy EU ETS, thus giving them a tool to offset their impact on global warming.

In addition, the markets on which these allowances are traded sometimes lack visibility and face legislative variations from one state to another. mitigates these issues and tokenises carbon credits so that they are more easily traded by emitting companies.

Progressive optimisation of energy consumption in mining

Reuse of heat emitted by mining computers

aims to improve the environmental footprint of Bitcoin through . The company plans to build Bitcoin mines near businesses that would use the heat produced by the mining. The pilot project has already signed two partnerships with a sea salt producer and a distillery. Both companies need heat to run their businesses. Therefore, the heat produced by the mining is recycled into hot water to be passed on to the MintGreen partners.

In addition, developing a boiler that recycles the heat emitted by the mining devices. These boilers called “Sato” will be compatible with existing and future graphics card models. In this way, the company wishes to participate in the advent of a new generation of decentralised miners, and to distinguish itself from centralised industrial mines that do not always reuse the heat emitted by the mining equipment.

Decentralisation of mining

The decentralisation of power supply for mining will also be exploited by Daymak, a Canadian manufacturer of light electric vehicles. Indeed, Daymak recently announced Spiritus, its next electric car that will be equipped with its own mining infrastructure.  

Daymak Spiritus will integrate Daymak Nebula technology, consisting of Nebula Wallet (an application with a directly integrated wallet) and Nebula Miner (a mining infrastructure directly integrated into the vehicle). Ultimately, Daymak’s crypto suite will turn its vehicles into “environmentally friendly crypto nodes – an unprecedented step in the rapid evolution of blockchain technologies”.

The use of green electricity to reduce the environmental footprint of mining

State initiatives

On 9 June, the President of El Salvador, Nayib Bukele, announced that he would propose a bill to make Bitcoin a legal tender.

The recognition of Bitcoin as a legal tender is not El Salvador’s only initiative in the crypto-asset sector. Indeed, in a recent tweet, Nayib Bukele informed that El Salvador wants to implement a plan to provide facilities for bitcoin mining with very cheap, clean and renewable energy emitted by volcanoes.

To quickly and efficiently mine its first bitcoins using the geothermal energy released by its volcanoes, the State of El Salvador will use the services of the mining company BigBock Datacenter.

Private initiatives

According to the CBECI, every year 25,082 TWh of electrical energy is produced in the world. However, 16.82% of this energy is not used. In this context, the use of this energy for mining is an effective way to combat energy waste. Until recently, most of the miners were based in the Sichuan region of China. The energy used by these miners came largely from wind, solar and especially hydroelectric power.

Following the Chinese government’s crackdown, the recent exodus of China-based miners appears to be reshuffling the deck in the global mining industry. The new mining pools could massively promote the use of renewable energy, which would contribute to improving Bitcoin’s carbon footprint.

Since 2017, Virunga, a region located in the Democratic Republic of Congo, has been equipped with hydroelectric power plants that will eventually meet the needs of the region and combat deforestation in Virunga (the world’s second largest forest park after the Amazon). These power stations are currently overcapacity due to the lack of economic development in the region. BigBlock Data Center has installed a farm that obtains its supplies from the hydroelectric power stations, enabling them to recoup part of their costs.

Conclusion

In summary, the idea that blockchain project developers do not take into account the issues related to the ecological transition should be qualified. Indeed, the products of certain blockchain projects are interested in future projects related to the ecological transition. Open and decentralised blockchain networks represent a real opportunity for the development of innovative ecological initiatives by facilitating the distribution of electricity from peer to peer, for example.

Furthermore, the energy consumption of certain blockchain networks based on proof of work is undeniable. This observation has led to the emergence of initiatives aimed at improving the carbon footprint of mining and proposing greener alternatives. For example, the company Bigblock Datacenter has taken an interest in the surplus renewable energy present in certain geographical areas in order to facilitate decarbonised mining.

Eventually, the increasing use of blockchain technologies will allow the optimisation of energy supply across all geographical areas to combat the wasteful overproduction of energy in some land areas.