A new scientific study has warned that the energy used by blockchain technology, such as digital currency mining, could significantly contribute to climate change.
The report, published in Energy Research and Social Science, goes as far as to claim that failure to lower the energy use of such technologies by certain nations could prevent them from reaching their climate-change mitigation obligations under the Paris Agreement.
Authored by Jon Truby, assistant professor of the Centre for Law and Development at Qatar University, the study evaluates the financial and legal options available to lawmakers to moderate blockchain-related energy consumption, and foster a sustainable and innovative tech sector.
Based on this review, ownership models, and jurisdictional case law and practices, the report recommends new taxes, charges, or restrictions to reduce demand by users, miners, and miner manufacturers who employ polluting technologies, and offers incentives that encourage developers to create less energy-intensive or carbon-neutral Blockchain.
"Digital currency mining is the first major industry developed from Blockchain, because its transactions alone consume more electricity than entire nations," said Truby. "It needs to be directed towards sustainability if it is to realise its potential advantages.
He added that many developers have taken no account of the environmental impact of their designs, so it's essential that they are encouraged to adopt protocols that do not result in high emissions.
"Taking no action means we are subsidising high energy-consuming technology and causing future Blockchain developers to follow the same harmful path," he added. "We need to de-socialise the environmental costs involved while continuing to encourage the progress of this important technology to unlock its potential economic, environmental, and social benefits."
Putting this into perspective, Truby said the processes involved in a single Bitcoin transaction could provide electricity to a British home for a month - with the environmental costs socialised for private benefit.
He concluded: "Bitcoin is here to stay, and so, future models must be designed without reliance on energy consumption so disproportionate on their economic or social benefits."
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