Blockchain at a Crossroads: Reducing the Environmental Footprint and Leveraging Distributed Ledger Technologies for a Sustainable Energy Future

Abstract

For several years now, blockchains and distributed ledger technologies (DLTs) have enjoyed widespread interest in their applicability in various use cases in the energy sector and beyond. However, this rapid growth has also raised concerns about the cryptocurrency’s massive energy consumption, not yet accounting for the energy needs of other DLTs. Electronic waste has also been a recent issue with specialized computers entering the market for Bitcoin mining that have no further use after being replaced by newer models. While exact data on the environmental impact of DLT solutions is not yet available and promising technological developments might solve some of the energy-related problems, a closer look at sustainability criteria as core design principles for DLT solutions is needed. This article offers a heuristic approach that helps to evaluate DLT projects regarding their environmental externalities and assists in moving away from energy-intensive DLT design practices.