The Digital Enabler of Sustainable Infrastructure

The lines between our physical world are blurring toward a digital existence. As with all new technologies, the beginnings are not always easy, and the urgent need for sustainable energy transition is crucial for Web3 success. (Web3 has become a catch-all term for the vision of a new internet. At its core, Web3 uses blockchains, cryptocurrencies, and NFTs to give power back to the users in the form of ownership.) One of the main criticisms of blockchain technology is its intense energy use and the resulting carbon emissions. Since bitcoin's creation in 2009, the rate of crypto adoption has increased by over 110% each year. This is a more dramatic adoption rate than the internet itself. Due to this, the U.S. government emphasized researching digital assets' climate effects. In light of these growing concerns, legislation has been put in place that will impact developers building Web3 systems to think more about how they will enact a low-carbon future.

The current state of the internet needs to be improved to meet the needs of the future. A new operating system that impacts the choices and implications for companies, users, and the environment ingrained into the system is integral. Blockchain technology gives us a model for understanding how things can change because of technological advancements. Blockchain can redesign value creation, production, distribution, and exchange practices to improve current processes and systems by acting as a digital enabler across the infrastructure value chain.

Article takeaways:

  • What will be the ecological and material impact of using raw computing power versus eradicating the need entirely to power a parallel digital world (PoW versus PoS)

  • Blockchain technology implementation of the circular economy system to show the power of tech to enable deeper technological integration, standardization, and the possibility of new business models

Mechanism for Processing

One of the biggest advantages of Web3, NFTs and DeFi is the reliance on provable blockchains and cryptocurrencies. Proof of work (PoW) and proof of stake (PoS) use algorithms to validate cryptocurrency on a blockchain network. The main difference is how they process and qualify users to add transactions. These two mechanism for processing have completely different outcomes when it comes to using raw computing power, one sustainable (PoS) versus the other which uses more computing data (PoW). These cryptocurrencies are decentralized and need to be verified by computers to make the transactions visible and this is why sustainability is so important here. Both PoW and PoS help users perform secure transactions on the blockchain so they are essential to the process, but finding ways to power the demand for PoS will be a constant battle for sustainable developers within the space.

PoW blockchains require multiple computers to approve transactions and slow down the process greatly, these energy-intensive machines just simply overdo it for our own benefits and something that's quite costly for companies to even use. PoS is an environmentally conscious solution that doesn’t have a large impact on the environment. The PoS model is also more scalable and can handle more transactions than PoW. Scalability is a big factor in the success of a blockchain. The speed at which transactions (amongst many other things) can be confirmed and written to the blockchain much faster with PoS. That is why many networks are moving to a PoS model (ie: Ethereum which claims it now uses 99.95% less energy than it did under proof-of-work consensus). This is a big shift for the industry and will have a radical impact on the way we use blockchain technologies in the future.

Environmental Impact

Our over-dependence on non-renewable energy sources and lack of innovative technologies are preventing us from achieving IPCC’s goal. However, blockchain technology is the innovation with the potential to accomplish this massive goal. To provide a long-term solution to address the challenges of fossil-fuel dependency on costly energy productions, the challenge is to analyze the blockchain system, focusing on the transparent and traceable impact in its broadest context. The vision for a circular economy systems solution framework is set to be the design blockchain utilizes to contribute to the business value of blockchain to USD $3.2 trillion by 2030.

Recognizing the circular economy—one where we waste nothing and utilize all resources efficiently—is seen as daunting. The circular economy is a systems solution framework that tackles global challenges like climate change, biodiversity loss, waste, and pollution.
In its current state, the mass population of the economy is linear. We extract resources, create products, use them, and dispose of them. In a circular economy, the economy would work in a closed loop. The aim is to design out waste and pollution, keep products and materials in use, and regenerate using natural systems, making systems more resilient and regenerative.

The Circular Economy Main Pillars:

  1. Reduce: Minimizing and eliminating waste and consumption of non-renewable resources.

  2. Reuse: Finding ways to use materials and resources more than once (blockchain tech runs throughout)

  3. Repair: Leveraging technology and learning to extend the life of products.

  4. Recycle: Recovering materials and reusing them to create new products and close the loop.

  5. Renew: Harnessing renewable energy sources such as solar and wind to power production and consumption.

  6. Reimagine: Reimagining commerce and industry to drive sustainable development and growth.

Similarly to the circular economy model, blockchain holds great potential to aid in the reestablishment of how e-waste is handled, tracked and manufactured. In this model, waste is minimized and natural resources are conserved compared to how blockchain creates a transparent and decentralized system to effectively track touch points.

In tandem, the two systems are in sync in terms of a circular economy, and blockchain technology can significantly improve e-waste management by providing end-to-end traceability from production to disposal. Systems built on the blockchain can show where materials are sourced and which components should be recycled and reused.
This analysis of the 2 systems could transform how Web3 technology can help fuel a better digital existence. Integrating blockchain and the circular economy could bring about a significant transformation in our digital behaviors. The distribution of trustful and verifiability signatures, combined with the idea of 'close the loop' (reduce, reuse, recycle), could bring about a monumental shift in our collective reigns of responsibility for managing the planet's resources from the algorithmic tracking of materials to the optimization of production processes. Ultimately, the marriage of these two systems will create a complete system change needed for a circular economy to work effectively.

The circular economy also offers a critical pathway to mitigate climate change because recycled and reused resources have lower carbon footprints. For example, improving the circulation and reuse of uncontaminated steel would avoid 500 Mt of new steel production by 2050, saving more than 1 billion tonnes of carbon emissions annually.


The acceleration in use of the technology may now be on the cards, as seen in Europe, where policy changes may now mean that blockchain can help companies fulfill new legislative requirements.

The EU’s new digital product passport legislation asks for companies to create passports for certain products containing information to aid reuse and recycling. While earlier this year Telefonica Tech and Exxita Be Circular created the first European Green Passport for electronic equipment, incorporating both blockchain and artificial intelligence.

Disruptive Potential

The greatest inventions were frequently intended for something other than their current purpose, which is the same as blockchain. Blockchain can be the main component to create a more effective system of managing e-waste, remanufacturing, and recycling. The crucial lever to accelerate this process is the government policy mandating these shifts. Suppose non-renewable resources are taxed at the point of usage, and a tech platform like blockchain enables this. In that case, we could see significant shifts in how companies design their business models and product cycles. In creating this complete system change effectively, financial incentives to eliminate waste should be given and the materials that cause pollution could only then become more aligned (incentivizing change). Blockchain could then be the catalyst that takes us into the next stage of blockchain maturity.

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