Crypto Energy Consumption: How Green is Blockchain Technology?

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Somehow blockchain was able to draw criticism for being rough on the environment. While it is easy to see how Bitcoin mining is something of a gray area environmentally, blockchain has vast potential in the development of green technology.

Bitcoin and Ethereum mining is probably why cryptos and blockchain were associated with environmental destruction. Bitcoin mining began to consume vast amounts of power as it became more popular during 2017, and by the time December 2017 came around, some estimates put the bitcoin network’s power consumption on par with the nation of Denmark.

Cryptocurrency Energy

That would put a single transaction from that time at 250kWh, or enough to power a house for more than a week.

Bitcoin won’t be replacing Visa anytime soon.

Blockchain, on the other hand, is as efficient as the architecture that supports it. Blockchains like Bitcoin and Ethereum use ‘proof-of-work’ to incentivize people to operate the nodes that allow the network to function, but there are many other ways to create a blockchain network.

Richard Branson Digs Green Blockchain Project PowerLedger

One area where blockchain technology is catching on quickly is in the electrical sector. The model that most electrical grids use was designed at a time when large sources generated electricity and consumers used it.

The modern electrical grid was designed to be a one-way street.

Today, all that is changing. One company that is at the forefront of the change is Australian-based PowerLedger. They were awarded the top spot at Sir Richard Branson’s Extreme Tech Challenge last year, and are deploying their platform to a few trial projects.

Powerledger Guide

More recently Spain’s Iberdrola announced it completed a blockchain test project that enables it to prove that power supplied and consumed is 100% renewable. Creating records at a level where previous systems struggled is an area where blockchain shines, and the electrical industry will probably continue to develop blockchain-based systems for record keeping and payment purposes.

Where Money and Power Meet

The financial side of the global energy system is a source of massive waste.

Arun Ghosh, Blockchain leader at KPMG US, says that,

“While still maturing, blockchain solutions are driving increased levels of trust, transparency and transferability between people and organizations that originate, distribute and consume goods and services,” and that, “The decentralization and digital verification enabled by blockchain are accelerating environmental governance which is at the core of rebuilding and addressing environmental challenges such as rising sea levels, toxic waste and measured use of fossil fuels.”

Ghosh touches on one of the most powerful aspects of blockchain. Instead of having to trust a complex series of transactions that have to be verified by humans, blockchain allows people to trade minute amounts of electricity, and create small-scale generation systems that will be consumed locally.

The idea of a local power grid isn’t as new as blockchain, but without blockchain, the financial end of the operation would be very hard to make a reality. Blockchain platforms like the one that PowerLedger designed removes humans from the operation of power generation and distribution systems almost entirely and allows trade settlement in the absence of banks.

A Simple Concept

One hundred years ago, humanity didn’t have many options when it came to energy sources. Today, small and medium scale solar generation can fulfill (most of) the energy needs of people in many places that have sufficient sunlight.

Relatively inexpensive battery technology is another force that is changing our options for power infrastructure, but without inexpensive record keeping systems, it is hard to bridge the gap between our current technology, and what is possible.

Blockchain has shown itself to be a vital part of new energy systems and may be one of the biggest forces in green tech going forward. While it is fair to say that blockchain isn’t positive or negative for the environment, it didn’t take long for forward-thinking people to see its potential to enable much higher levels of resource use efficiency.


Nicholas Say was born in Ann Arbor, Michigan. He has traveled extensively, lived in Uruguay for many years, and currently resides in the Far East. His writing can be found all over the web, with special emphasis placed on realistic development, and the next generation of human technology. Contact

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