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Modern’s technology huge appetite for energy
Blockchain technology is a prime example of energy-intensive innovation. The Bitcoin network, which functions based on the “Proof of work” (PoW) mechanism, requires enormous amounts of energy. “Proof of work” is used to ensure the integrity and security of the network by enabling the verification of new transactions and the creation of new blocks in the blockchain.
It is estimated that Bitcoin’s annual electricity consumption worldwide is around 120 terawatt hours (TWh). This value corresponds to the consumption of a medium-sized country. It is generated by thousands of mining computers running around the clock, validating transactions added to the blockchain and generating new bitcoins.
A leading example of a more energy efficient blockchain is Ethereum. It has been using the “Proof of stake” mechanism since 2022. This move has enabled Ethereum to reduce its energy consumption by more than 99 per cent. This success has inspired other blockchain projects to switch to less energy-intensive mechanisms.
In the field of artificial intelligence, large language models and deep learning systems require immense computing resources. Training the GPT-3 language model, which ChatGPT used until early 2023, consumed an estimated 1287 megawatt hours (MWh) – enough energy to power a small town for several months.
AlphaGo, DeepMind’s AI system that defeated world champion Lee Sedol at Go, was also enormously energy-intensive: It took thousands of hours to train, consuming far more energy than the average household.
Data Centers: silent Giants
Data centers are the backbone of the world’s digital infrastructure. They power the servers and store the data needed for modern Internet services. The Citadel campus in Nevada, USA, is one of the largest data centers in the world. It is designed to handle up to 650 MW of power, equivalent to the energy consumption of a large city.
The Langfang Data Center in Langfang, China, is also known for its enormous energy consumption of several hundred megawatts. It provides the infrastructure for the cloud services of the Chinese online group Alibaba.
Google, Microsoft and Meta as pioneers
Yet progress is being made towards sustainability. One example is Google’s data centre in Hamina, Finland. It uses seawater to cool its servers, which significantly reduces energy consumption. In addition, the entire data centre is powered by renewable energy.
Microsoft is taking a similar approach with its Project Natick underwater data centres. These data centres use cold seawater for cooling and are so efficient that they can operate with minimal energy consumption.
Another example of innovation is Facebook’s data centre in Luleå, Sweden. By harnessing the natural cold of the north and using 100 per cent renewable energy, the facility’s energy consumption has been drastically reduced.
Blockchain and renewable energies can already be combined today
Due to the need for high computing power and the associated environmental impact, the move towards renewable energy is becoming more important by the hour and will be essential in a few years’ time.
There are now numerous blockchain-based projects that have recognized the signs of the times and are promoting the expansion of renewable energy. The Australian company Power Ledger enables peer-to-peer trading of surplus solar energy, while the Estonian start-up WePower pre-sells energy as tradable tokens to facilitate investment in renewable energy projects. South Africa’s SunExchange uses crowdfunding for solar projects in developing countries.
The ION Power Grid uses blockchain technology to operate decentralized energy networks. It enables users to efficiently trade excess energy from renewable sources while ensuring grid stability through real-time data and smart contracts. The ION Power Grid aims to accelerate the integration of renewable energy into existing networks and improve access to clean energy globally.
AI is gradually becoming more sustainable
There are also promising approaches in the field of AI. OpenAI and Google are developing specialized hardware such as Tensor Processing Units (TPUs), which can train AI models more efficiently. TPUs consume significantly less energy than traditional GPUs, reducing the environmental impact.
Another example is the Nano cryptocurrency, which does not require any coin mining and therefore has extremely low energy consumption. This is made possible by its special blockchain architecture, in which each wallet uses its own blockchain, enabling fast and efficient transactions.
Instead of the energy-intensive Proof of Work, Nano relies on a Delegated Proof of Stake (DPoS) system, where elected representatives vote on transactions. Because all tokens are pre-distributed and there are no transaction fees, the network requires minimal resources. This combination makes Nano one of the most environmentally friendly cryptocurrencies.
Nano and other projects prove that sustainable technologies are possible when environmental awareness and technological innovation are combined.
Politicians also need to step up
The responsibility for the sustainable use of modern digital technologies does not lie with businesses alone. Governments and international organizations have a crucial role to play in creating an environment that encourages the transition to renewable energy. This can be done through subsidies for green energy, stricter regulations on energy-intensive technologies, or the development of an energy infrastructure based on renewable energy sources.
One example is the European Green Deal, which aims to make Europe carbon neutral by 2050. One component of this initiative is the promotion of energy-efficient digital technologies, including both blockchain and AI.
A sustainable future will require the courage to innovate
The high energy consumption of blockchain and AI currently threatens the sustainability of our planet. But with innovative technologies, renewable energies and political commitment, we can find a balance between technological progress and environmental protection. Examples such as Ethereum, SolarCoin and ION Power Grid show that a sustainable digital future is possible – if we are willing to invest in it.
