Sustainability solution or climate calamity? The dangers and promise of cryptocurrency technology

The negative environmental impact of cryptocurrencies such as Bitcoin has been widely covered in the press in recent weeks and months, and their volatility has also been flagged as a cause for concern.

Bitcoins don’t exist as physical objects, but new coins are “mined”, or brought into circulation, through a process that involves using powerful computers to solve complex mathematical problems. This process requires so much energy, that the Bitcoin network is estimated to consume more energy than several countries, including Kazakhstan and the Netherlands.

A pilot programme in Pakistan showed that it was possible for WFP to get cash directly to beneficiaries, securely and quickly, without the need to go through a local bank.

If this can work for refugees, it can also work for other disadvantaged, vulnerable groups.

The potential of blockchain in protecting the environment has been tested in a number of other projects, by the UN and other organisations.

Data on harmful greenhouse gas emissions in many countries, says the Partnership, is incomplete and unreliable.

And blockchain could be an important part of accelerating the take up of renewable energy sources such as wind and solar.

For example, the Ethereum Foundation, the organization behind the Ethereum cryptocurrency, is working on a new way to verify transactions.

This is likely to improve our UN-wide knowledge on blockchain, our understanding of the environmental and social implications of mining operations, and improve our chances of coping with any problems the technology may bring in the future”.

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