Evolving towards Sustainability — Harnessing the potential of Blockchain

Source: Linkedin

The 2022 United Nations Climate Change Conference, also known as Conference of the Parties (COP), is the 27th annual meeting on climate change, and has made much progress last year under the direction of Dr. Sameh Shoukry, appointed President of COP27. It focused on 3 primary areas: reducing emissions, preparing and dealing with climate change, and securing technical support and funding for developing countries for these activities.

For small island nations such as Grenada, the outcomes of discussions pertaining to issues like climate induced loss & damage (particularly in the areas of financial support and strengthening capacity building) are very welcome. Smaller developing nations are the most disproportionately affected by the aftermath of climate calamities, and often do not possess appropriate means of response. Their comparatively weaker economies mean they have the least capacity to adapt and recover in the wake of these events — an issue that COP aims to address by garnering international support for the Global South. The goal is to help them escape the eco-development trap, strengthen their climate adaptation capacities, and help them achieve sustainable development.

For almost the entire time since its creation, blockchain has a reputation of being energy intensive. Proof-of-Work (PoW) systems such as Bitcoin are notorious for their high energy consumption. This is a direct result of miners competing against each other to validate transactions on networks, which fuels the ever escalating race for bigger and better mining rigs that consume more energy. This could cast a shadow on the benefits that blockchain based solutions bring such as the ease of performing financial transactions. On the other hand, the TRON network provides users with 1500 free bandwidth per day (A resource used on the TRON network). This equates to approximately 5 free transactions per day. Users who exceed their daily free bandwidth limit can expect to burn only a mere 0.26 TRX ($0.014 cents USD) per additional transaction on average.

In general, there are a few aspects I feel we should consider as we make a concerted effort towards building a more sustainable use of blockchain:

1) We should explore fundamental re-designs that will allow the same level of authentication and processing with considerably lower demands on resources. The Proof-of-Stake (PoS) consensus mechanism is an alternative primary algorithm that assigns transactions to users for validation based on the volume of tokens they have staked. Instead of having them spend massive resources to compete, it vastly reduces the overall energy consumption.

  • Statistics published by the Crypto Carbon Ratings Institute (CCRI) in August 2022 found that the TRON network, with its Delegated Proof-of-Stake (DPoS) mechanism, consumes 99.9% less power than Bitcoin and Ethereum annually. TRON network clocks in at a mere 162,868 kWh for over 2.31 billion transactions — the equivalent energy consumption of 15 average U.S. homes.
Source: CCRI report

2) We should actively look at supporting more efficient sources of energy to run a peer-to-peer decentralized world on the basis of blockchain ecosystems. I see two main challenges that traditionally plague renewable energy usage: (a) the intermittency of such sources which translates to high externalities (such as deployment of batteries or backup fossil fuel generators) (b) the cost associated with verifying that the energy comes from a renewable source. For the latter, blockchain technology can be harnessed towards solving these problems by letting us better visualize the production and usage of renewable energy in a way that is verifiable by third parties. By increasing the flexibility in deploying these energy sources, we can promote energy generation and do so at a lower cost and better accessibility to those who need them the most.

3) We should work to reduce or offset the impact of emissions. The blockchain industry has taken some lead in this effort. I am heartened to learn that TRON ranks among these industry leaders by maintaining a low overall carbon footprint. The TRON network’s annual emissions clocks in at 69.47 tCO2e (tonnes of Carbon Dioxide equivalent), which is comparably low even next to PoS blockchains such as Solana (934.77), Cardano (286.41) and Algorand (243.52).

These climate friendly initiatives to either reduce energy needs or offset emissions have continued to spread across the blockchain industry. The most notable is Ethereum’s merging of its Mainnet with the Beacon Chain in September 2022. Ethereum now runs entirely on a Proof-of-Stake system and its electricity use has been slashed by 99.95% according to an analysis by the Crypto Carbon Ratings Institute (CCRI).

I have previously stated that the most effective networks are those that encourage decentralization while minimizing their environmental impact. In the wake of COP27 and the events of last year, I find this continues to hold true. Blockchain has concrete usage for enabling climate action. It can hold parties accountable for their greenhouse gas emissions by providing transparency and accountability. Smart contracts can also provide instant authentication and verification vis-a-vis relevant data like carbon footprints of individual players. This technology is ultimately a tool and with the proper application it can greatly aid efforts towards sustainability to serve the needs of the international community.

H.E. Justin Sun