The vision of blockchain as a path to a low-energy distributed utopia has not materialized, argues Jeremy Gordon. Instead, it points to an ever-active and energy-intensive future, fostering an electricity system of plenty powered by clean nuclear power.

Some saw it as the perfect way to decarbonize and democratize energy: let everyone generate distributed electricity and record every kWh on a permanent public blockchain. Everyone would buy and sell electricity using the same system, trading with each other minute by minute, enabled by mobile internet and regulated by smart grids. Blockchain promised that this system would be accessible to the public, but people could be anonymous if they wanted, and it would still be secure enough to pay everyone what was owed to them automatically.

Put simply, this would allow you to use rooftop solar power to charge your electric car over the weekend, then sell the electricity to your employer from the parking lot on Monday. The big picture would be where every individual and every business would be doing things like this all the time and the system would sort of fix it all in real time.

It was an attractive vision of a circular economy where technology would combine energy and money in a low energy utopian lifestyle. But there was a problem hidden deep in the math, and now blockchain technology is pushing us the other way, to uses that could only be tolerated in a society of plenty of energy, not efficiency. streamlined.

You see, a blockchain is just a data structure for record keeping. Anyone can make one, and anyone can use one, but if they want to publicly record something of value, the data controller has to be highly reliable. It doesn’t matter if the controller is a trustworthy and tech-savvy organization, but having a central organization would reduce the openness of the system.

The more realistic alternative is to use the self-secure versions of the blockchain, in which the blocks are linked together by mathematical puzzles in a way that is easy to verify but cannot be easily simulated. It requires the computer banks to be running all the time to solve the puzzles, while also performing the transactions and mutually verifying the structure of the data.

The most famous example is Bitcoin, which in a weird way actually converts the cost of consuming electricity into a monetary asset that comes with the byproduct of unbreakable crypto security. It’s really smart and it works great until you have $ 1 trillion in value registered on your blockchain. At this point, the power of the computer that maintains the system and its security requires more electricity than Argentina.

It gets worse, because not only will this demand for computing power continue to increase, but although there is significant value in the blockchain, I guess computers will never be turned off. Who Said Base Charge Is Dead?

Obviously, a blockchain rooted in massive and ever-increasing energy consumption wouldn’t be a very good foundation on which to build a clean energy future. Unfortunately, for the nascent digital democracy industry, no one has yet found a practical alternative. This is the main reason why the talk about the clean energy blockchain has died down after a few years of headlines.

So far so disappointing, but stick with me because it’s getting even worse.

Although Bitcoin is the most famous blockchain application in the world, there are many other cryptocurrencies that also increase their energy consumption permanently. One of the main ones is Ethereum, which has risen in value by over 240% since the start of the year. This is in part due to the latest innovation on what can be stored in its secure system.

In addition to ownership of currency, Ethereum can now record ownership of digital assets in so-called non-fungible tokens (NFTs). (Not fungible as each is unique, unlike tokens for digital “ coins ” which are necessarily all the same.) This means that you can now “ own ” the “ original ” copy of a digital photograph, of a drawing, song or movie, or indeed anything that was created using a computer.

NFTs first appeared in 2017, but in March, for the first time, a major auction house (Christies) sold a digital artwork based on it. It was a collage of digital images made over 14 years by artist Beeple and it raised an incredible $ 69.3 million for what had already been put online for free. To quote Beeple’s tweet, “saint f –––”.

A new cottage industry has sprung up instantly as a result of the sale of Beeple, with people adding all kinds of digital ephemeral documents – much of the wrong side of copyright – to the Ethereum blockchain in hopes of quickly gaining value. digital money. Each item listed requires the “typing” of a new NFT, and therefore the power consumption. It was estimated that the whole process could use 340 kWh – which is the equivalent of running a microwave for over two weeks just to create the equivalent of a certificate of ownership.

Far from recording the minute-by-minute data of an electrical system in an idyllic distributed clean energy future, the great contribution of blockchain so far has been to promote energy consumption by turning it into intangible value. .

There are also more practical applications of NFTs, such as “smart contracts”. They see the logic of a contract encoded in an NFT where it waits to be executed automatically and anonymously. Applications range from insurance contracts to … organized crime.

Is it okay for your travel insurance paperwork to lie in a system of continuous energy consumption from that point on, forever? It can be argued that every digital recording requires a certain amount of power consumption and that insurance companies also have huge computer systems that run continuously. But the difference in scale is enormous. The Ethereum blockchain only needs 107 GB of storage, so it can be copied to a USB stick, but its maintenance for public use requires around 7.75 TWh per year – the power of a 950 MWe power plant. . This is not the case.

Right now, cryptography is horrible from a decarbonization perspective and even raises ethical questions about the level of long-lived radioactive waste. By placing value on these blockchains, we are forcing future generations to sustain them using ever-increasing resources, even as the Earth’s natural carrying capacity decreases. And of course, NFTs, Bitcoin and other obscure financial products belong to the richest people, while the impacts of their energy use will surely fall on the poorest. It does not go well. Can he be stopped?

Banks tried to shut down Bitcoin when they recognized a competitor. They failed and now they are building their own products based on NFTs. Democratic governments have no chance of making policies to curb cryptocurrencies, given the amounts of money involved. And things are often not uninvented.

At the same time, we usually don’t try to ration energy, so it’s only for applications deemed socially useful. The closest things would be the ‘polluter pays’ principle and consumption taxes to discourage waste, but national efforts are of limited use in taming a crypto industry that can move wherever electricity is the cheapest.

Like it or not, we need to recognize that public blockchains are here to stay and that their immense power consumption is a permanent staple addition to our increasingly digital world.

The vision of blockchain as a path to a low-energy localist utopia seems dead. It now points to an ever-active high-energy future where infrastructure is as lawless and innovative as its uses, good and bad.

The only answer is to push for an abundant power system that meets the ongoing demands of the digital world while eliminating pollution and social inequity from fossil fuels. This uncontrollable and anarchic engine of energy demand can find its counterpart in nuclear power, as a stable, controlled source of energy, fully responsible for its waste and its impacts and, above all, clean. The confusing new world of crypto should only give the nuclear industry more reason to succeed and more confidence in its vision of energy abundance.

Jeremy Gordon is an independent communications consultant with 15 years of experience in the international energy industry. His company Fluent in Energy supports partners of all kinds to communicate on issues of clean energy and sustainable development.

Cartoon by Alexy Kovynev