With the blockchain into the green future

With the blockchain into the green future

Blockchain applications can provide more transparency and sustainability in many areas. © Cemile-Bingol, GettyImages

The blockchain technology has caused a stir again and again, especially due to the success of bitcoin and the subsequent trends such as the emergence of new altcoins and NFTs. In the meantime, crypto money and other digital assets have long been established in many places and have found their place in the financial world. However, it is often forgotten that there are a whole range of other fields of application for the blockchain.

Various researchers, organizations and companies are now increasingly concerned with the sustainability potential. While cryptocurrencies in particular were considered real climate sinners in the past due to their insatiable thirst for energy, green blockchain certificates can ensure more transparency in energy production in the future and help climate protection projects to use existing funds as efficiently as possible.

More transparency for green electricity

The integration of renewable energies is one of the most important challenges in promoting a more sustainable and decarbonized economy. Surprisingly, blockchain technology offers promising solutions here. So far, this has appeared in connection with cryptocurrencies as an energy waster. However, by using blockchain-based applications, blockchains could now actively support the energy transition. A key advantage is the decentralized form of organisation, which can be ideally combined with decentralized power generation from renewable energy sources such as sun and wind. The organization via blockchain allows the secure and transparent documentation of the individual contribution of private energy producers to the overall production. Theoretically, it would be possible to set up self-sufficiency networks from solar systems and home battery storage systems that can make their electricity available to everyone involved in a fair and transparent manner. The first pilot projects pursuing such a concept have existed in the DACH region for several years. A pioneer was the Energy supplier TenneTwhich works closely with IBM to use home storage to stabilize the power grid.

Another promising field of application in the energy industry is peer-to-peer trading in electricity via blockchain. Smart contracts allow energy consumers and producers to interact directly with each other and sell or buy excess energy. This promotes efficiency and reduces costs, as there are no expensive intermediaries and middlemen. An important advantage would be that consumers could be involved even more directly in the energy transition with this system. Blockchain thus offers promising opportunities to advance the expansion of sustainable energy supply and thus make an important contribution to reducing the environmental impact of the energy sector.

With new consensus procedures against the hunger for energy

Blockchain technology is strongest where it can be used for audit-proof documentation of transactions. In computer science, this is referred to as distributed ledgers. Since the network uses a verification process to ensure that the transactions recorded in the blockchain remain unchangeable, it is considered particularly secure. Unfortunately, the greatest strength in the past has also been the greatest weakness of blockchain-based applications, as the consensus methods used to validate transactions are often very energy-intensive. One of the best-known consensus methods is Proof of Work (PoW), which is used by Bitcoin and some other cryptocurrencies. PoW requires the so-called “miners” to solve complex mathematical puzzles in order to add new blocks to the chain. This process is extremely computationally intensive and consumes large amounts of power.

In comparison, newer, alternative consensus methods such as Proof of Stake (PoS) and Proof of History (PoH) use significantly less electricity. PoS is based on the concept that block validators (rather than miners) create blocks for confirmation based on the amount of cryptocurrency they have pledged as collateral. Proof of History (PoH) is another low-energy consensus method used to validate the Solana blockchain. It allows transactions to be arranged in a linear order without the need for complex calculations. The crypto scene honors such innovative advances as the Solana course on Bitvavo and other platforms shows.

More sustainable products for the customer

Since it can be assumed that most altcoins and other tokens based on the blockchain principle will have a comparatively low energy requirement in the future, nothing stands in the way of extensive use in other areas. The blockchain can be extremely useful, for example, when tracing products along the supply chain. Information about origin, production conditions, transport and storage are stored in transparent and immutable blocks. This enables a trustworthy proof of origin for products such as fair trade goods or organic food. Both consumers and companies would thus gain a comprehensive insight into the entire production process. Another point concerns the sustainability aspects in the supply chain. Blockchains can be used to monitor and promote green practices and the use of sustainable materials. Since this additional transparency and commitment to more sustainable business practices has a positive effect on the public perception of a brand, most companies would probably adopt such standards even without a legal obligation.

With the blockchain for climate protection

In concrete terms, some climate protection projects are already benefiting from the properties of blockchain technology. A specific area of ​​application is the support of REDD+ (Reducing Emissions from Deforestation and Forest Degradation) and similar forest protection programs. Here, blockchains make it easier to monitor CO₂ emission reductions by transparently logging the success of the reforestation measures. Even the amount of carbon dioxide stored can be quantified with the direct participation of the community. Advocates of blockchain integration often point out that local communities could better understand the purpose of the expensive and complex projects, which increases the acceptance of climate protection projects of this type. In addition, blockchain technology has untapped potential in terms of financing and implementing climate protection initiatives. By issuing climate protection tokens or other digital assets, investors and sponsors can invest directly in climate protection projects and receive immediate information about the progress.


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