The world is reeling as the effects of climate change continue to worsen. In fact, according to the World Meteorological Organization (WMO), global temperatures are expected to peak to record-breaking levels in the next five years. According to Carbon Brief, an estimated 61,000 people died due to extreme heat in Europe alone in the summer of 2022, which was the hottest on record.
Added to this is the loss of life and habitat from wildfires, droughts, floodings, intense storms and other extreme weather conditions. It is an understatement to say that there is an urgent need—not only to address the effects of climate change—but prevent further damage to the atmosphere by actively reducing carbon emissions.
And this is why now, more than ever, the world is focused on the carbon footprints left behind by any kind of activity, especially large-scale ones like those from new technologies. The increasing use of blockchain, an emerging technology, has spurred a heated debate on its energy efficiency and sustainability.
Because it is a fairly new technology, there is no standard equation yet to measure its energy efficiency. This has led to much attention being given to its extremely high electricity consumption. However, blockchain sustainability and energy efficiency should not be based on electricity consumption alone.
Yes, it is a given fact that blockchain consumes a massive amount of electricity due to the Proof of Work mechanism. It requires a very high computing power to solve a complex mathematical algorithm for a node or miner on the network to be able to win the right to add a completed block on the chain. But this is not the end.
Greg Ward, chief development officer of blockchain distribution firm SmartLedger, explained this very simply at the 2023 London Blockchain Conference. “We always are measuring the input and the output. What are we putting into it energy wise (the consumption) and what are we getting on the other side out of it.”
For blockchain, the output is in the number of transactions being processed in a single block or its throughput as measured in transactions per second (TPS). Blockchain sustainability and energy efficiency, therefore, can ultimately be answered by the question, “Do the uses and benefits of blockchain justify or outweigh its energy consumption?”
Scalability is key to being able to answer a resounding “yes” to this question. If the blockchain network can scale, which means being able to increase data block size and throughput, then it will be able to meet present and future demands for data processing and storage.
For instance, the BSV Blockchain has unlocked unbounded scaling by restoring the original Bitcoin protocol. And because of this, it is now able to complete 4GB blocks and process 50,000 TPS. And these numbers will only grow in the future. Compare this to unscalable BTC Blockchain that has block size cap of only 1MB and a maximum throughput of seven TPS, and it is obvious which one is energy inefficient and unsustainable in the long run.
An unscalable blockchain has a very limited output, but uses up the same amount of electricity as a scalable one. When a blockchain scales, it not only increases its output, but also its utility. Global businesses and other emerging technologies will be able to use it as a base or backend layer for various platforms without fear of network latency or surge in transaction fees, which also contributes greatly to blockchain sustainability.