At a very basic level, blockchains are shared databases that store and
verify information in a cryptographically secure way. It is monitored
and organized by a peer-to-peer blockchain network, which also serves
as a secure ledger of transactions, e.g., buying, selling, and transferring.
One can think of a blockchain as a Google spreadsheet, except that
instead of being hosted on Google’s servers, blockchains are
maintained by a network of computers all over the world. These
computers (sometimes called miners or validators) are responsible for
storing their own copies of the database, adding and verifying new
entries, and securing the database against hackers.
A cryptocurrency is an encrypted data string that denotes a unit of
currency.
Crypto, as we know it today, has a significant environmental impact,
but it’s hard to measure exactly how significant. Many frequently cited
statistics come from industry groups, and it’s hard to find trustworthy,
independent data and analysis.
In these essays, Varsha Appaji, a 2021 SMU graduate, and a Research
Associate at the Federal Reserve Bank of San Francisco -and a former
student Research Analyst in the Hunt Institute- looks at the impact of
blockchain technology and its impact on major issues facing society
for better and for worse.
. . .
Blockchain has many potential use cases in the sustainable energy sector, particularly in electricity. With smart energy meters, blockchain and other emerging smart technologies could ensure real-time electricity tracking and avoid double counting. Electricity tracking via blockchain could mean rewards for generating renewable energy (ie. SolarCoin) and renewable energy certificates or carbon credits.
Peer-to-peer electricity trading is a major potential use case for blockchain in energy. The “Interbit” blockchain platform developed by Canadian BTL is the first intrinsically safe and self-guaranteed electronic energy trading system, allowing for a variety of transactions from small, community trading to large business interactions. Interbit is also accessible to developers since all of its applications can be written in JavaScript.
Energy microgrids are another major use case for blockchain, making up 23% of blockchain electricity initiatives in 2018. The Brooklyn Microgrid is an example of a community energy network of sustainable clean energy that generates, stores, and trades energy in the local community.
Cons
- The energy consumed by blockchain’s computational work is unsustainable
- The energy consumption and carbon footprint of blockchain may outweigh its potential energy upsides
For a video overview of blockchain, watch “Blockchain Applications for Social Impact” here.
Written by Varsha Appaji ’21
Edited by Chris Kelley
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