A blockchain is a public digital ledger which can be used to verify the ownership of both real-world and digital assets such as cryptocurrencies. However, many blockchains, and in particular some cryptocurrencies, use a validation mechanism known as ‘proof-of-work’. This mechanism requires vast computing power and results in substantial electricity consumption. For Bitcoin alone, more than 100 TWh per year is now consumed, which is equivalent to the annual electricity consumption of the Netherlands.
The IEA’s Digital Demand-Driven Electricity Networks (3DEN) Initiative and IEA - 4E TCP Electronic Devices and Networks Annex are co-organising this webinar illustrate how blockchains work, how cryptocurrencies and other applications employ the blockchain, and why the resulting energy consumption is so high. A potential solution to significantly reduce the energy consumption used for validation will also be presented.
The webinar will draw from the key findings of the report Blockchain Energy Consumption - An Exploratory Study. The report was commissioned by the Swiss Federal Office of Energy and authored by Mr Vlad Coroama, Independent researcher, Roegen Centre for Sustainability (formerly at ETH Zürich).. The report contains a detailed analysis of blockchain, its use in cryptocurrencies and beyond, and the resulting energy consumption.
The IEA gratefully acknowledges the Italian Ministry for Ecological Transition for their support for this webinar as part of their contributions to IEA’s Digital Demand Driven Electricity Networks (3DEN) Initiative on power system modernisation and effective utilisation of demand side resources through digitalisation and to the Clean Energy Transitions Programme. The IEA equally acknowledges the IEA-4E Electronic Devices and Networks Annex sponsorship of this webinar.