PwC and the impacts of Blockchain
A blockchain is a decentralised ledger of all transactions across a peer-to-peer network, allowing participants to confirm transactions without a need for a central clearing authority. Potential applications include fund transfers, settling trades, voting and many other issues. This technology allows for the existence of cryptocurrency, an increasingly popular medium of exchange.
Since everything about blockchain technology is digital, it couldn't possibly be harmful to the environment at all, right? WRONG!
Some of the most popular applications of blockchain consume significant amounts of energy and generate high levels of greenhouse gas emissions that impact the world’s climate.
To understand the impact in more depth, PwC has developed Blockchain Sustainability Framework. This Framework entails two approaches with two impact areas each:
1. Energy use and greenhouse gas emissions as qualitative approaches.
In blockchain technology, a validator checks transactions, verifies activity and maintains records. Miners create blocks and verify transactions. As miners and validators could technically choose to not include any transactions in a block, electricity could be consumed without validating any transactions. Blockchain systems consume energy through a number of channels. including the hardware used to run the relevant software, data transmission networks and the energy used to manufacture the hardware used throughout the system. Energy use also causes environmental impacts through several pathways, one being GHG emissions, which contribute to global warming.
2. Marginal energy use and embodied carbon/e-waste as qualitative approaches.
E-waste refers to the electronic and electrical equipment used in blockchain technology that is discarded. Increased generation of e-waste generates negative environmental and social impacts through a number
of channels, including:
• Biodiversity impacts and water pollution through greater demand for mining of raw materials.
• Human rights impacts, through potential disturbances of land belonging to racially/ethnically diverse populations
for new mines, and accusations of labor issues in mining.
• Resource scarcity of metals and minerals due to low levels of recycling. For example, research suggests that there is 100 times more gold in a tonne of e-waste than in a tonne of gold ore, but less than 20% of e-waste is recycled.
Sustainability should be a core value of emerging blockchain technology developers - it is important to develop blockchains that have low levels of emissions or that are carbon neutral, so that as they grow they do not lock in adverse impacts. PwC aims to use their findings to advance their blockchain technology, whilst maintaining sustainability and minimal environmental impact.
Source: https://www.pwc.com/us/en/services/assets/pwc-blockchain-sustainability-report.pdf