Cryptocurrencies and the blockchain technology that underpins them have enormous promise, with the potential to free millions of people and even play a crucial part of environmental protection, as per the United Nations.
It stated in its study that technology may serve as a driver for a more sustainable global economy. Nevertheless, power consumption stays its Achilles heel, which must be addressed before the technology’s full promise can be realized.
One of the advantages of blockchain and crypto, according to the united nations, is the fostering of sustainable growth. “Openness is among the most helpful characteristics of cryptocurrencies in the UN’s eyes,” it said. “The technology can offer a reliable and accessible ledger of events since it is immune to manipulation and forgery. This is especially crucial in areas where institutions are inadequate and fraud is significant.”
The World Food Programme has previously demonstrated that blockchain can assure that funds are distributed to those who require the most. The World Food Programme (WFP) in Pakistan tested a blockchain technology that circumvented banks, with positive results, according to the organization. Furthermore, blockchain has the potential to make significant progress in the sphere of nature conservation.
Not only can blockchain be used to track and prevent environmentally destructive operations, but one venture is converting “reductions in greenhouse gas emissions into a cryptocurrency that can be transacted, giving producers and consumers a monetary incentive to make more sustainable alternatives.”
“Blockchain might also play a role in speeding the adoption of renewable energy sources like wind and solar. Because these sources are sporadic and decentralized by essence, new types of energy markets are required. Tools based on blockchain technology can assist in the creation of these arketplaces and the abolition of our reliance on fossil fuels.”
The United Nations cited studies claiming that Bitcoin consumes more power than whole countries. With fossil fuels still accounting for a significant portion of world energy output, “Bitcoin mining may be considered to be partially instrumental in the creation of greenhouse gases that cause global warming,” according to the report.
According to the report, single Bitcoin transaction consumes 1.6 million times the energy of a typical Mastercard transaction. “Notwithstanding the all of these potential benefits, the large energy usage associated with the technology is among the key barriers that have to be addressed, and several participants in the industry are researching on methods to resolve the issue,” the worldwide organization noted in a news statement.
One of the biggest initiatives in the sector, according to the UN, is the Ethereum Foundation’s endeavor to transition the platform to a proof-of-stake consensus protocol. Per some analysts, this shift may cut the altcoin’s energy usage by up to 99.95%.
