Blockchain Tech: Environmental Impact & Solutions
Written by  Daisie Team
Published on 6 min read


  1. What is Blockchain?
  2. How Blockchain Works
  3. Blockchain and Environment
  4. Environmental Impact of Blockchain
  5. Solutions to Mitigate Blockchain's Environmental Impact
  6. Case Studies of Sustainable Blockchain Applications

Imagine a world where every transaction, big or small, is recorded and made visible to everyone—yet remains secure. Welcome to the world of blockchain technology. As complex as it might sound, it's quite straightforward once you get the hang of it. But the environmental implications of blockchain technology? That's a whole different ball game. Let's dive in.

What is Blockchain?

Picture a chain of blocks—not the kind you played with as a kid, but a digital one. Each block contains information. And these blocks are all connected, forming a chain. That's the basic idea behind blockchain.

The Basics of Blockchain

Here's an easier way to understand this: suppose you and your friends decide to keep track of all the ice cream you all consume in a week. Instead of using a notepad, you decide to use blockchain. Here's how it would look:

  • Block: This is like a digital ice cream wrapper. It contains the details of the ice cream—flavor, size, price, who bought it, and when.
  • Chain: This is the digital record of all the ice cream wrappers (blocks) you and your friends have collected.

Blockchain’s Transparency

One of the main features of blockchain is that it is transparent. Going back to the ice cream example, everyone in your group can see every ice cream purchase made. If someone tries to sneak in an extra scoop, the group would know. That's how blockchain works—every transaction is visible to everyone involved.

Security in Blockchain

Despite its transparency, blockchain is very secure. Think about it: if someone tried to change the flavor of their ice cream on the digital wrapper after they've eaten it, the entire group would know. The transparency of blockchain makes it difficult for anyone to make sneaky changes—adding an extra layer of security.

Now that you have a good understanding of what blockchain is and how it works, let's delve into a more pressing issue—the environmental implications of blockchain technology.

How Blockchain Works

Now that we've got the basics, let's take a closer look at how blockchain technology actually works. Think of it as a digital ledger, where every transaction is recorded and linked together. But how does it all come together? Let's break it down.

Creating a Block

Every block in the chain starts with a transaction. Going back to our ice cream example, every time someone buys an ice cream, a block is created. This block contains all the details of the transaction—the flavor, size, price, who bought it, and when. Once this block is created, it's sent out to everyone in the network.

Validating a Block

Before a block can be added to the chain, it needs to be validated. This is where the blockchain community comes in. Using a process called consensus, the community verifies the details of the block. If the majority agrees that the transaction is valid, the block is approved and ready to join the chain.

Adding the Block to the Chain

Once a block is validated, it's added to the chain. But it's not just slapped on the end. Each block is linked to the one before it using a unique code called a hash—think of it as a digital fingerprint. This linking process is what makes the chain secure. If someone tried to tamper with a block, the hash would change, and everyone would know something was up.

Repeating the Process

The process doesn't stop here. Every new transaction creates a new block, which then needs to be validated and added to the chain. This is how the blockchain continues to grow.

So now we've got a handle on what blockchain is and how it works. But what about the environmental implications of blockchain technology? Are there any? Let's find out.

Blockchain and Environment

Alright, let's shift gears a little and talk about how blockchain interacts with our environment. Truthfully, it's a bit of a mixed bag, with both positive and negative aspects to consider.

Energy Consumption

First, let's talk about a big concern: energy consumption. Blockchain networks, especially those using proof-of-work systems like Bitcoin, require a lot of computational power. This means they use a significant amount of electricity. You might be surprised to learn that the Bitcoin network alone uses more energy than some countries! And this is just one of the environmental implications of blockchain technology.

E-Waste Generation

Another environmental issue associated with blockchain is e-waste. The powerful computers used in blockchain networks can become outdated quickly as technology advances. When these machines are discarded, they contribute to the growing problem of electronic waste.

Carbon Footprint

Linked to the high energy consumption is the carbon footprint of blockchain technology. The electricity that powers blockchain networks often comes from fossil fuels, contributing to greenhouse gas emissions. So, yes, even virtual currencies can have very real environmental impacts.

Okay, so far we've covered some of the environmental implications of blockchain technology. And honestly, they seem kind of grim. But don't lose hope just yet. There are also some promising solutions to these issues. Let's turn the page and look at those next.

Environmental Impact of Blockchain

Having seen how blockchain interacts with the environment, let's dive deeper into the specific environmental implications of blockchain technology. It's important to understand these impacts in a more detailed way.

Scale of Energy Use

Let's start by putting the energy use of blockchain into perspective. Remember when we mentioned that the Bitcoin network uses more energy than some countries? Well, to be more specific, if Bitcoin were a country, it would rank in the top 30 energy consumers worldwide. That's more energy than the entire country of Argentina!

Impacts of E-Waste

When it comes to e-waste, the problem is twofold. First, the discarded machines from blockchain networks add to the pile of e-waste. Second, this waste often isn't disposed of in an environmentally friendly way. This can lead to harmful substances like lead and mercury being released into the environment.

Carbon Emissions

And remember when we talked about the carbon footprint? Well, it's estimated that Bitcoin's carbon emissions are comparable to those of New Zealand. That's a hefty environmental impact for something that exists entirely in the digital realm.

So, there you have it. The environmental implications of blockchain technology are considerable and, frankly, quite concerning. But before you write off blockchain altogether, let's explore some ways we might reduce these impacts. Because, as with many technologies, there are ways to make blockchain more sustainable.

Solutions to Mitigate Blockchain's Environmental Impact

After understanding the environmental implications of blockchain technology, you might be wondering: "Is it all doom and gloom?". Not quite. There are indeed ways we can mitigate the environmental impact of blockchain. Let's explore some of these.

Efficient Consensus Mechanisms

Remember the energy-hogging process of mining we discussed earlier? Some blockchain networks are moving away from this mechanism. Instead, they're adopting more energy-efficient processes like Proof of Stake (PoS) or Delegated Proof of Stake (DPoS). These methods require much less computational power—and therefore less energy—than their predecessor, Proof of Work (PoW).

Renewable Energy Sources

Another solution is to power blockchain networks with renewable energy sources. This reduces the carbon emissions associated with blockchain. There are already blockchain networks that are powered entirely by renewable energy.

E-Waste Management

And what about the e-waste problem? Well, there are solutions to this too. More responsible manufacturing and disposal practices can help reduce the amount of e-waste produced by blockchain networks. Additionally, recycling programs can ensure that old machines are properly disposed of, minimizing their environmental impact.

So, while the environmental implications of blockchain technology are certainly significant, they're not insurmountable. With the right solutions in place, we can make blockchain a more sustainable technology.

Case Studies of Sustainable Blockchain Applications

Beyond just mitigating the environmental implications of blockchain technology, some innovative minds are using blockchain to solve environmental challenges. Let's take a look at some real-world examples.

Energy Web Foundation

The Energy Web Foundation is a global, open-source platform that uses blockchain to accelerate the transition to renewable energy. It enables any energy asset, owned by any customer, to participate in any energy market. By decentralizing energy distribution, it promotes the use of renewable energy sources and reduces carbon emissions.

Plastic Bank

Plastic Bank is another organization using blockchain for good. They have developed a blockchain-based platform that incentivizes people in developing countries to collect and recycle plastic waste. In return, they receive blockchain-based tokens, which they can use to purchase goods and services. This not only helps to reduce plastic pollution but also provides a source of income for people in impoverished areas.


Everledger is a company that uses blockchain to track the lifecycle of products and ensure they are produced sustainably. For example, they track diamonds from the mine to the consumer, ensuring they are not blood diamonds. This kind of transparency can help consumers make more informed and sustainable purchasing decisions.

These are just a few examples of how blockchain can be used to not only mitigate its own environmental impact, but also address broader environmental issues. It goes to show that when used responsibly, blockchain can be a force for good in our world.

If you're intrigued by the environmental impact and solutions related to blockchain technology, check out the workshop called 'Unboxing Blockchain' by Sara. This workshop will provide you with an in-depth understanding of blockchain technology and its implications on the environment, as well as potential solutions to minimize its impact.