Searing heatwaves and wildfires across the world are finally bringing home the impact of global warming and the Anthropocene era. While temperatures shoot ever upwards, one of the purported reasons for this warming, cryptocurrencies, are plunging in the opposite direction. The top causes of global warming are very much real life ones and not crypto related– cement construction, deforestation, fossil fuel use for power generation, etc. However, there has been a disproportionate amount of noise on how bitcoin and other cryptocurrencies are fueling the warming world and climate change. One of the key triggers for this discussion was a report published by the Centre for Alternative Finance of the University of Cambridge. Called the Cambridge Bitcoin Electricity Consumption Index, it shocked crypto fans and delighted the skeptics by calculating that just Bitcoin mining used more electricity and energy than the countries of Belgium and Finland. According to Digiconomist, the second largest cryptocurrency, Ethereum, gobbled up as much power as did Switzerland! There is more: the Bitcoin network generates huge amounts of carbon dioxide, as much as Turkmenistan does, and Ethereum’s CO2 emissions rival New Zealand’s! As if this was not enough, obsolete ASIC (Application Specific Integrated Circuit) mining equipment that crypto miners use dumpsa colossal 36000 tons of electronic waste every year.

This disproportional energy use in crypto is a feature, not a bug. The Proof of Work algorithms that make crypto and blockchain what they are – decentralized, secure, open – are the ones that consume vast amount of energy.Proof of Work is a consensus mechanism that allows miners to validate cryptocurrency transactions by deciphering increasingly complicated mathematical puzzles. Whoever solves the puzzle validates the transaction gets the mined crypto; solving these arcane problems require massive compute power and therefore use tremendous energy. The crypto industry is painfully aware of this and has resolved to clean up its act by resolving to be carbon neutral by 2030. Many blockchains, most famously Ethereum, is moving from proof of work to proof of stake – a mechanism which uses far less energy, but compromises on some other properties of the chain. Other technologies like sharding and non-tech methods like carbon offsets are being aggressively used to create green crypto or green blockchains.

While the story of how crypto, and therefore blockchains, have been negatively impacting the climate have been tomtommed about in earnest, is there a way that blockchains can actually help manage global warming and climate change? It turns out that there are several. While they currently consume vast amounts of electricity, blockchains can be very effectively used to decentralize the system by creating peer-to-peer electricity sharing mechanisms in local communities. This greatly helps reduce transmission losses and encourages an economic model to produce and consume clean power through solar, wind, biogas and other means.An example of this is the Brooklyn Microgrid Project that uses smart contracts trade solar electricity with neighbors over a blockchain.This  kind of electricity can be tokenised, building an incentive mechanism to trade and donate electricity to poorer areas. Besides the Brooklyn Project, a JV between Consensys and LO3 Energy called the Transactive Grid, is working on a blockchain platform that addresses this problem. A P2P energy trading platform for solar and other renewable energy sources is being built by another startup called SunContract.

Tokenisation can also help to reward and encourage recycling of industrial and electronic wastes, as well as help incentivise regenerative agriculture. Smart contracts, a core feature of many blockchains, can be used to propel this incentivisation mechanism whereby people get rewarded to use more sustainable land-use practices.An example of this is the Green World Campaign, Cornell University initiative which is building smart contracts that uses satellite data to automatically  reward people who successfully regenerate bodies of land by increasing tree cover, improving soil, etc.The track-and-trace or provenance property of blockchains has several use cases around climate action. One is just tracking environmental treaties  like the COP initiatives to enforce action, decrease fraud and prevent manipulation. Blockchains can also be effectively used to track where the donations are going and how they are being used for non-profits working in the environmental area, thus making the spend more effective and providing comfort to donors; startups liked Bitgive and Bithope are working in this space.The greenhouse gases spewed out by producers, as well as the carbon credits and carbon tax mechanisms to try and ameliorate those can be tracked, traced, and audited much more effectively using blockchains. Blockchains are being used in global supply chains to build efficiency and resiliency, but they can also be used to measure, monitor and reduce the carbon footprint caused by them. Technologies, much like their human creators, are double edged swords; they can cut both ways. AI can tremendously benefit humankind, but it has an undeniable dark side with war, surveillance, and bias. Social networks are an amazing way to connect and help people, but are creating havoc with our, health, self-esteem and even our politics. Data, in itself, is a treasure trove of information as well as a murky cesspit. So are blockchains, as we learn above: depending on how we humans use this double-edged sword, they can either help destroy our planet, or aid in saving it