By Trevor Butterworth
The words “blockchain” and “energy” usually make uncomfortable reading as people think of the outsized energy and environmental costs that come with using cryptocurrencies; recently, however, blockchain technology is being seen — and being adopted — to do the opposite and drive sustainability in the energy industry.
As a recent article in Finance Magnates reports, blockchain is driving sustainability initiatives “by improving energy traceability, facilitating peer-to-peer energy trading, streamlining supply chain management, and decentralizing energy infrastructure.”
It all makes for fascinating reading; but, we draw attention to it mostly because it’s a timely reminder that not all blockchain is crypto, and that distributed ledger technology can be used to do lots of beneficial things without using much energy at all, let alone draining the grid.
Simply put, the energy intensive computation required to validate bitcoin transactions — known as “proof of work”— is unique to that activity; other uses of a blockchain, such as to support verifiable credentials for decentralized identity, do not.
Here’s why:
- A distributed ledger for identity uses signatures rather than mathematical computation to generate proof. No complex mathematical processes are needed. You either accept the signature or you don’t.
- A write to the ledger (and one write can be the basis for millions of identity credentials) or a look up on the ledger uses no more energy, and possibly less, than browsing a web page.
- A decentralized network using a blockchain-based distributed ledger means you can use Peer DIDs to move most “transactions” and their cryptographic proofing off the ledger. As no personally identifying information is written to the public ledger identity blockchains don’t need to do any ledger transactions at all.
Although harder to quantify, the energy saved from using a technology that enables you to trust information is also something that should be taken into account. You can build seamless, frictionless processes to take advantage of data that can immediately be verified and acted upon. This is what is happening in the energy industry use cases described in the Finance Magnates article.
All this saves time and money and mitigates error and fraud. So remember, when you hear the word “blockchain,” it’s not just about bitcoin.
