On 22nd April 1970, the world joined hands to commemorate Earth day with efforts geared to protect the environment, restore damaged ecosystems and make life more sustainable. In the 52 years since a lot has changed and lately blockchain technology and cryptocurrencies have been heralded for their ability to make life more sustainable and improve some of our systems. This presents the perfect opportunity to look at how crypto projects can align with the eco-friendly Earth day mission.
Because there are so many parameters involved, it is a substantially difficult task to identify one crypto project as being “greener” than others. Taking an example of the cryptocurrency market with over 10,000 coins in existence currently, many much smaller cryptocurrencies naturally have a far lower energy footprint than Bitcoin. This is because they involve far fewer daily transactions yet scaling them up could reveal they may be just as bad, if not worse than the cryptocurrency that has been red-lighted by some green movements.
There are however some cryptocurrencies that are inherently more energy-efficient than Bitcoin based on their operating model. While Bitcoin relies on a ‘Proof of Work’ mechanism that involves huge amounts of calculations (and, thus, processing power) to produce a single token, cryptocurrencies using a ‘Proof of Storage’ or ‘Proof of Stake’ system uses far less energy.
Using Credit to get to Zero.
Since it is practically impossible to generate zero-carbon emissions; many companies around the world are looking at ways to counterbalance their carbon emissions, mainly using carbon credits and offsets.
Carbon credits represent the right granted by an area’s environmental regulatory agency to emit a certain amount of carbon-based on the ability to absorb this carbon. Essentially one shows that they have a certain number and/or size of carbon sinks (trees, oceans, swamps and the like that are verified to absorb a certain amount of carbon dioxide) and then they are allowed to go ahead with whatever (legal) activity they want.
Quantifying carbon emissions thus is crucial in the Earth day crusade and projects such as Pachama are utilizing artificial intelligence to calculate, quantify and report carbon footprint data for the purpose of enhancing accountability and transparency within the corporate and Web3 industries.
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In addition to this, the head of growth and partnerships at Toucan Protocol, Sander DiAngelis advocates for the merging of physical and digital initiatives like distributing carbon credits on blockchain technology- a service provided by Toucan Protocol. He is quoted saying that they create “virtual carbon sinks that generate real-world planet-positive impact.”
Thinking inside the box
While some climate change advocates look to make changes from outside the companies charged with unhealthy emissions, others have looked within; ClimateDAO’s approach involves members pooling resources to buy shares in big polluting companies so that they can influence the company’s actions towards sustainability from within.
As we continue down the path towards sustainability, the climate crisis presents a major stumbling block while literally and figuratively remaining a major frontier for multiple cutting-edge developments across blockchain and Web3 technologies.