How Can Blockchain Save The Environment?

People know Blockchain technology as a decentralized and distributed digital ledger that records transactions securely and transparently. It is a disrupting alternative to the centralized systems that we are familiar with. Blockchain was initially used for the cryptocurrency Bitcoin trading but has since been applied to various other use cases. Blockchain is even emerging as a savior of our environment in many ways. So, let’s learn more about blockchain, its impacts, and roles in saving the environment.

blockchain environment
blockchain environment

Blockchain's Impact On The Environment Through Mining And How Cryptos Are Addressing It

Blockchain technology has the potential to revolutionize the way we transact and exchange value, but it is not without its environmental impact. The primary issue of blockchain platforms is the energy consumption associated with the process of mining cryptocurrencies.

Mining involves using powerful computers to solve complex mathematical equations to verify transactions and add new blocks to the blockchain. This process is energy-intensive, and the computers require significant electricity to operate. In fact, the energy consumption of Bitcoin mining alone has been estimated to be equivalent to that of small countries such as Argentina or Sweden.

Cryptocurrency mining contributes to carbon emissions, and can also strain local energy grids; Bitcoin mining is one such example. However, some cryptocurrencies are taking steps to address these concerns. For example, the Chia (XCH) uses a “Proof-of-Space and Time” consensus algorithm, which consumes significantly less energy than traditional Proof-of-Work algorithms. Additionally, Chia (XCH) mining requires only hard drive space, and not the high-powered computers used in other mining operations.

Popular cryptocurrencies, such as Ethereum, have transitioned from a Proof-of-Work to a Proof-of-Stake consensus algorithm in 2022. This change has significantly reduced the energy consumption associated with Ether mining as it relies on validators putting up a stake in the cryptocurrency to verify transactions instead of using energy-intensive computers.

Some cryptocurrency projects also focus on offsetting their carbon emissions through renewable energy sources. For example, the cryptocurrency project BitRiver (BTR) has built a mining farm in Siberia that uses excess hydropower from nearby dams to mining Bitcoin (BTC).

Overall, while the environmental impact of cryptocurrency mining is a significant concern, there are promising developments in the works to mitigate its effects.

Some Environmentally Sustainable Cryptos To Know

Besides Chia (XCH) and Ethereum (ETH), several environmentally sustainable cryptocurrencies are worth knowing about. Here are a few examples:

Cardano (ADA):

Cardano (ADA) is a cryptocurrency that uses a Proof-of-Stake consensus algorithm. Thus, the energy consumption associated with Cardano mining is significantly lower than that of other cryptocurrencies.

Algorand (ALGO):

The Algorand network utilizes a “pure Proof-of-Stake” mechanism that does not require any energy-intensive computations.

Tezos (XTZ):

The cryptocurrency has a focus on maintaining high sustainability besides using Proof-of-Stake consensus algorithms. The Tezos network is designed to be environmentally friendly and releases a low carbon footprint.

Stellar (XLM):

The cryptocurrency uses a consensus algorithm called the Stellar Consensus Protocol, which is comparatively more energy-efficient than Proof-of-Work. The Stellar network is also designed to be low-cost and accessible to everyone. It focuses on financial inclusion.

environment blockchain

Blockchain's Role In Different Industries

Here are a few prime industries that blockchain technology can significantly impact:

  • Energy

Blockchain technology has the potential to transform the energy industry by increasing efficiency, reducing costs, and improving transparency. One of the most promising applications of blockchain in this sector is the creation of peer-to-peer energy trading platforms. These platforms enable individuals and businesses to buy and sell excess energy without the need for a middleman.

Blockchain can also be used to verify the origin of renewable energy sources, such as solar or wind power. It can help reduce fraud and improve trust in the market. Additionally, blockchain can be used to optimize energy usage, manage energy grids, and track carbon emissions.

  • Transportation

Blockchain can create decentralized and secure transportation networks. It can facilitate peer-to-peer ride-sharing, micropayments, and enhance the safety and security of autonomous vehicles by live data sharing and updates about the routes. Thus, it reduces the possibility of traffic congestion, which eventually lowers the traffic-related air pollution (TRAP) such as road dust, vehicle exhaust etc. Hence, blockchain can benefit the environment in terms of reducing transport-induced air pollution.

  • Manufacturing

Blockchain technology can enable greater transparency, traceability, and accountability across the manufacturing supply chain. Manufacturers can track every movement of goods from raw materials’ production, distribution to sales of finished products. It keeps a track of CO2 emissions, produced wastage, and how manufacturers dump it. Thus, blockchain increases the manufacturers’ accountability to reduce wastage, and ensure proper dumping to reduce their environmental impact.

  • Waste Management

Waste management companies can track waste from generation to disposal through blockchain. Blockchain can enable the creation of decentralized marketplaces for waste materials, facilitating the exchange of waste products between different companies and industries, and reducing wastage amount sent to landfills. It can help create a circular economy where waste is treated as a valuable resource. Thus, it can reduce the environmental impact of waste disposal and increase sustainability.

  • Agriculture

Farmers can track the entire lifecycle of their crops, from planting to harvest to distribution and sale using blockchain. Additionally, they can have real-time information about discharge quantities of agrochemicals, drug residues, organic matter, saline, and sediments drainage into water bodies due to agricultural processes. Thus, they can manage the produced wastage in a better way.

  • Fishing

With blockchain, fishers can access a tamper-proof record of every catch, from the moment it’s caught to its final destination. This can help reduce Illegal, Unreported, and Unregulated (IUU) fishing practices. Blockchain can provide real-time data on fish stocks, locations, and movements, enabling better management and conservation of fish populations. Thus, it can identify the events of overfishing, habitat destructions, use of destructive fishing gears, and more. The transparency offered by blockchain can compel fisheries to consider how they impact the environment as a whole.

  • Forestry

Forest owners, loggers, and processors can record the harvest processing and distribution on the blockchain ledger. It can help reduce illegal logging, improve forest management, and increase sustainability. Forest upper management gets real-time data on forest inventories, tree growth rates, and carbon sequestration, enabling better management and conservation of forests.

Blockchain Applications That Can Save The Environment

environmentally friendly blockchainA. Traceability And Transparency In Supply Chain Management

  • Reducing waste and CO2 emissions

Identifying any inefficiencies within the company’s work process is easier with blockchain as they can track their products’ journey from source to destination. This data can help in making necessary changes in the work process to reduce excess waste and CO2 emissions. Additionally, blockchain’s transparency enables stakeholders to hold companies accountable for their environmental impact, and incentivize them to improve sustainability. Blockchain also allows consumers to access information about the products they purchase, making it easier for them to choose environmentally friendly products.

  • Preventing deforestation and illegal logging

Blockchain technology can record every transaction and movement of timber on an immutable ledger across the timber supply chain. Thus, companies can verify that timber is sourced from legal and authorized providers. The transparency in data will support sustainable forestry practices.

B. Decentralized Energy Distribution

  • Enabling peer-to-peer energy trading

Blockchain technology can enable peer-to-peer energy trading by providing a secure and transparent platform for buyers and sellers to exchange energy. It allows energy producers to sell excess energy directly to consumers in real-time without needing approvals from 3rd parties such as energy providers or utilities. The trading platform uses smart contracts to automatically execute trades between buyers and sellers based on predetermined rules and conditions. Here’s how P2P energy trading works:

  • Provides accessibility to renewable energy

The P2P model encourages consumers to use their distributed energy resources effectively by providing a transparent record of the amount of energy produced, consumed, and wasted. It helps keep the community from preventing outages in cases of emergencies.

  • Supports the main grid

P2P energy trading platform assures better-decentralized generator management. It consistently matches local electricity demand and supply. The model ensures electricity consumption takes place at the right time of day from the perspective of the power system. Thus, it decreases the peak load and minimizes the electricity’s reverse flows. Hence, it reduces investments needed to boost generation capacity and build grid infrastructure to meet peak demand.

  • Maintains mini-grids

P2P trading connects various solar home systems to one another along with homes that do not have an electricity supply. Thus, it improves energy access to people who live in regions that are deprived of electricity.

  • Reducing The Reliance On Fossil Fuels

Blockchain technology can reduce the reliance on fossil fuels by enabling the development of decentralized energy systems that are powered by renewable energy sources. Here’s how it works:

  1. Decentralized Energy Generation:

Blockchain technology can enable the creation of decentralized energy systems that allow individuals and small communities to generate their own energy from renewable sources such as solar, wind, and hydroelectric power. Thus, the communities can reduce their reliance on fossil fuels and the centralized energy grid.

  1. Energy Traceability:

Blockchain technology can track and trace energy production and consumption. Thus, it allows consumers to buy energy from renewable sources, incentivizing the development of more renewable energy infrastructure and reducing the reliance on fossil fuels.

C. Carbon Offsetting And Climate Finance

  • Verifying and tracking carbon credits

Blockchain technology can enable the creation and trading of carbon credits and offsets, which incentivize the reduction of carbon emissions and the adoption of sustainable practices. It promotes the development of more sustainable energy systems, and reduces the carbon footprint of the energy sector.

  • Improving the effectiveness and transparency of climate finance

Blockchain technology can monitor greenhouse emissions and supports farmers’ adaptation to climate change. It tracks investments and results of applied management practices. Blockchain can also help track gender-relevant SDG (Sustainable Development Goals) indicators in mitigation, adaptation, and activities. In fact, the technology can encourage actions toward achieving the Sustainable Development Goals 2023, and the Paris Agreement.

  •  Encouraging companies to invest in sustainable practices

Businesses can achieve their sustainability goals through blockchain in various ways. They can enable crowdfunding and leverage peer-to-peer financial transactions to aid climate action initiatives.

Additionally, businesses can keep an eye on their account of greenhouse gas emissions. Blockchain technology can effectively generate and track reports on emission reductions.

environmental blockchain

Examples Of Blockchain-Based Environmental Initiatives

A. IBM’s Food Trust

IBM Food Trust is a high-end network that lets each member of the food chain collaborate with one another. These include:

  • Growers
  • Processors
  • Wholesalers
  • Distributors
  • Producers/Manufacturers
  • Sellers/retailers, and many more

The IBM blockchain solution connects each member via a permissioned, changeless, and distributed food processing and transaction record. Here are some ways that blockchain technology aids IBM’s Food Trust:

  • Boost food supply chain efficiency:

The Food Trust platform is built on distributed ledger technology, which provides a secure and transparent platform for tracking and tracing food products as they move through the supply chain. Each network member has access to the same information, allowing for greater transparency and collaboration between all parties involved in the supply chain. Thus, increasing the overall efficiency of the solution.

  • No food fraud:

The end-to-end traceability provides a complete and accurate history of each food product. It is used for quality control, compliance, and recall purposes.

  • Automated food processing:

The Food Trust platform uses smart contracts to automate many of the processes involved in the food supply chain, such as payments, logistics, and quality control. Smart contracts ensure that all parties in the supply chain meet their contractual obligations, which helps to increase efficiency and reduce errors.

  • Increased Food Safety:

The platform quickly traces the product back to its source if a food product is found to be contaminated or unsafe. It enables faster recalls and reduces the risk of illness, health crisis, or any serious outbreaks.

  • Keep food items fresh:

The platform accurately judges food items’ remaining shelf life through continuous monitoring of food products. Thus, regulators know when to discard and add new food item stocks.

B. Power Ledger’s Energy Trading Platform

Power Ledger is an energy trading platform that uses blockchain technology to enable peer-to-peer energy trading. The platform allows users to buy and sell renewable energy in a decentralized manner between sellers and customers. Thus, it creates a more efficient and cost-effective energy market.

Power Ledger’s platform provides a real-time view of energy production and consumption, which enables more efficient use of renewable energy sources. By enabling a more decentralized and transparent energy market, Power Ledger’s platform is helping to reduce reliance on fossil fuels.

C. Wildlife Conservation And Anti-Poaching Efforts

Blockchain-based Non-fungible tokens have been in use for conservation efforts in the wildlife sector.

One of the examples is PLCnetwork, a decentralized carbon credit exchange coorest and conservation consulting firm based in the Netherlands. The firm is working on tokenizing real-world endangered animals at Africa’s private conservation regions and game reserves.

The wildlife NFT holders can sponsor animals such as cheetahs, elephants, rhinos, or lions. The profit earned from NFT sales will go towards shelter, food, and the safety of the animals they represent.

Coorest is infamous for running an NFTrees CO2 compensation system. It tokenizes bonds or yield-bearing assets and tradable carbon credits on the blockchain. People who buy NFTrees store and burn CO2 tokens and register reduced CO2 amounts.

D. The Nature Conservancy’s impact investing platform

Today’s companies are seeking to balance their CO2 emissions to meet their commitments to produce net-zero targets due to the rise in carbon credits demand. A Canadian Imperial Bank of Commerce (CIBC), NAB, has been sponsoring ‘Dark Woods Forest Project Carbon’ to meet this demand.

The project aims to provide continuous price discovery and boosted transparency by deploying a private Ethereum blockchain to verify the credits. Blockchain technology enables users to trace the quality and source of offsets.

The first NAB-Backed Blockchain trade took place between NatWest Group and Nature Conservancy of Canada. The project explores the potential and capabilities of private investment to meet the objectives of the Nature Conservancy of Canada’s carbon reduction and conservation goals.

A. Energy consumption and carbon footprint of blockchain networks

Blockchain networks, like many other digital technologies, consume a significant amount of energy and have a huge carbon footprint. The energy consumption of blockchain networks is primarily due to the computational resources and energy required to verify and process transactions on the network, which is done through a mining process. As the size of the blockchain network grows, so does the energy needed to maintain it.
The carbon footprint of blockchain networks is also a concern, as the majority of the world’s energy production still comes from fossil fuels.

Lack Of Regulatory Frameworks And Standards

Many governments and regulatory bodies have yet to develop clear guidelines and regulations for blockchain use because the technology is relatively new and rapidly evolving.
This lack of clarity creates uncertainty for businesses and consumers who want to adopt blockchain but are unsure how it will be regulated, or the legal implications of using it.
Moreover, the lack of standardization in blockchain technology can lead to fragmentation and incompatibility between different blockchain networks and applications. Hence, it can limit their potential for widespread adoption. Without clear regulatory frameworks and standards, the development and adoption of blockchain technology may be hindered.

Implementation And Adoption Challenges

One of the main challenges is the complexity of the technology itself. Blockchain is a complex and multifaceted technology that requires significant expertise and resources to develop and implement effectively. Many organizations may not have the necessary technical expertise or resources to implement and maintain a blockchain-based system.
The cost of implementing and maintaining a blockchain-based system can be high, which may be a barrier to adoption for smaller organizations.


Blockchain technology can be a boon for various industries and futuristic green innovations.

Many organizations are actively working to develop and implement blockchain-based systems despite challenges in its adoption. There is a need for further research and development of blockchain-based solutions to address environmental challenges. Additionally, the potential benefits of blockchain technology in reducing waste, emissions, and deforestation can only be fully realized through continued innovation and collaboration.


Which Blockchain Is Best For The Environment?

Algorand (ALGO) is a blockchain network created with a focus on its environmental impact. The developers aim to make the platform carbon-negative. The network consumes minimal energy of 0.000008 kWh per transaction. Moreover, Algorand (ALGO) has an association with ClimateTrade. It is an organization that helps businesses balance their carbon footprint and track energy usage through blockchain technology.

Can Blockchain Solve Climate Change?

Blockchain technology provides a transparent ledger to track actions resulting in climate causes. Watchdog groups and governments can use blockchain to ensure money is being used to fund climate technology projects efficiently.

What Is The Most Energy-Efficient And Scalable Blockchain?

Avalanche (AVAX) is known as a highly scalable and energy-efficient crypto project. The platform uses a multi-chain approach instead of using a single chain, which allows it to handle 4,500 transactions/sec. It uses a Proof-of-Stake mechanism for block validation. It also makes Avalanche (AVAX) the best PoS coin as its transaction finality completes under 2 sec.

What Is The Greenest Blockchain?

The non-profit blockchain platform, Algorand (ALGO) Foundation, is called the greenest blockchain as it addresses climate change. It also commits to using clean energy to carry its entire network processes.

What Is A Green Blockchain?

A green blockchain is a technology that uses a consensus mechanism that doesn’t significantly aid climatic changes through greenhouse emissions. Such green blockchain technology is being actively used in significant green innovations in manufacturing, agriculture, banks, etc.

Nakul Shah
Nakul Shah - DLT Expert and Project Manager
53 Articles

Nakul Shah is a technology enthusiast, blockchain/AI consultant, author, and writer, passionate about innovative solutions. He is a regular speaker at conferences across the globe on blockchain, DLT, and fintech. Nakul specializes in writing content for fintech, gaming, emerging technology, and eCommerce sectors, and offer consultancy, training, and editorial services to clients across the globe. He is also a contributor to various publications, and has authored over 1000 articles, 100+ case studies, 75+ white papers, and a book on Blockchain titled “Blockchain for Business with Hyperledger Fabric.”

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Reviewed and Fact Checked by Maryam Jinadu , Fintech and Crypto Writer