Over the past years, a hype has emerged around blockchain technology
and cryptocurrencies. Within that hype, blockchain technology is
depicted in contrasting lights. While Bitcoin and other cryptocurrencies
are claimed to have significant environmental footprints, blockchain
applications are expected to create positive impacts on various
industries. Blockchain technology and its applications are still in early
stages of development, and it is unclear which applications will be
adopted and what their impact will be.
This PhD project is developed within the theoretical framework of
prospective technology assessment to investigate the trade-offs
stemming from the adoption of blockchain technology. There is an
urgent need for solid scientific research estimating the impacts of
blockchain applications due to the fast expansion of the technology and
to anticipate potential unwanted environmental and social impacts.
Therefore, this PhD project scientifically investigated the
environmental and social impacts blockchain technology will have.
In order to address this broad objective, two sub-objectives were
defined: 1) estimate the environmental impact of blockchain technology
itself using the example of Bitcoin; and 2) investigate how blockchain-
based technologies foster sustainability using the example of
applications in supply chains. According to previous studies Bitcoin
mining consumed at least 1 TWh in 2014 and is projected to consume
184 TWh in 2021. The associated carbon footprint was estimated to be
3-13 MtCO 2 from 2016 to mid-2018, with a projected 90 MtCO 2 in
2021. Existing studies do not take a life cycle perspective, as only the
impacts of electricity consumption are considered. These studies further
use ad hoc approaches for calculating environmental footprints and do
not build on established frameworks. Additionally, sensitivity and
uncertainty analyses are lacking. This PhD project produced the first
reproducible life cycle assessment of Bitcoin mining that includes
different phases within the life cycle, identified environmental hotspots,
and conducted sensitivity and uncertainty analyses. The project also
highlighted the nonlinearity of upscaling Bitcoin mining as an emerging
technology and discussed the limitations of LCA models for long-term
projections of such a volatile and uncertain system.
SUSTAINABLE BLOCKCHAIN TECHNOLOGIES
IV
Applications of blockchain technology in supply chains provide
potentials in extending visibility and traceability, supporting supply
chain digitalization and disintermediation, providing improved data
security for data sharing, and incorporating smart capabilities.
However, research in this field does not incorporate real experiences,
and there is little focus on how these potentials can be fulfilled.
Moreover, there is an absence of research relating blockchain-based
technologies to existing solutions. To address these gaps, this PhD
project investigated real cases demonstrating how blockchain-based
technologies are implemented in supply chains, how positive social and
environmental impacts can be created, and how blockchain-based
technologies interact with existing solutions.
The PhD project adopted a mixed-methods approach to assess different
blockchain implementations. Life cycle assessment has been
acknowledged as a valuable tool to support the identification of
environmental improvement potentials in early development stages.
Thus, to address the first objective, life cycle assessment was applied
as a quantitative approach for environmental assessment. Qualitative
research can also be suitable for prospective technology assessment, as
it is conducted when a phenomenon needs to be explored, yet data is
scarce or cannot be easily measured. As blockchain technologies are
still an emerging technology, with little data available, qualitative
research can be used to explore specific cases and experiences. Two
case study-based analyses and one grounded theory-based study using
interviews with stakeholders were conducted.
The results of this PhD project show that the energy consumption and
carbon footprint of Bitcoin mining have continuously increased over
the past years, reaching 72 TWh and 60.7 MtCO 2 for the first six months
of 2021. Coal-powered regions particularly contribute to the carbon
footprint, while hydro-rich regions add little. Across the life cycle, the
use phase is the major contributor, accounting for over 99% of the
impacts. The main driving parameters are the hashrate, the energy
efficiency of the equipment, and the mining locations. The PhD project
further indicated that the impact per TH mined decreases. However, the
hashrate grows at a faster rate than the impacts decrease. While life
cycle assessment has proven a valuable tool to provide a more holistic,
solid, and scientific assessment of the environmental impacts of Bitcoin
ENGLISH SUMMARY
V
mining, it is also limited in its ability to reflect and address the high
fluctuations and uncertainties of Bitcoin mining.
The findings of the PhD project further illustrate that blockchain
technology is not a stand-alone technology but rather part of a system
of technologies. Therefore, it may not be possible to distinguish
between the impacts of using blockchain technology and the entire
system of technologies. Blockchain-based technologies vary
considerably in their design. Depending on the design, blockchain-
based technologies can have different relationships with existing
alternatives. Blockchain-based technologies can co-exist, generate
synergies, or compete with existing solutions. The PhD project
additionally generated a middle-range theory of how blockchain-based
technologies in supply chains can create positive social and
environmental impacts in supply chains, illustrating this in four specific
impact pathways. These results, which show several ways in which
blockchain-based technologies can be employed to create positive
impacts, serve as a starting point for understanding the different ways
blockchain technology can be applied in supply chains and beyond.
This PhD project illuminates the supposed contradiction of blockchain
technology – blockchain technology in the form of mining will be
detrimental for the planet, while blockchain applications can save it.
This supposed contradiction is, however, conditional. It only exists
when proof-of-work blockchains that require mining are used. If,
instead, a non-proof-of-work blockchain is used for blockchain-based
technologies that foster sustainability, this contradiction does not exist.
While proof-of-work blockchains have high carbon footprints and
energy consumption levels, blockchain-based technologies can be a
tool to address sustainability as part of a system of technologies.
However, system design significantly affects the creation of positive
social and environmental impacts. Many actors, including technology
companies, brands, governments, users, researchers, and society, are
involved in shaping the development of blockchain technology. As
such, it lies in the hands of many to influence the development of this
emerging technology.