Can blockchain be part of the solution to climate change?

Elon Musk announced that Tesla will no longer accept Bitcoin as a payment method on the grounds of the impact of blockchain on the environment, which has attracted the attention of the world.

Although this has brought the debate about cryptocurrency and climate into the center of attention, it has been an issue of endless debate for many years.

Bitcoin’s proof-of-work consensus mechanism consumes a lot of energy, and this problem seems to only become more serious-as miners scramble to buy the supply of new coins, huge data centers have been established, and since 2020, This number has been further reduced by half.

Latest data from Digiconomist Suggest Bitcoin’s annual carbon footprint is now comparable to that of Portugal as a whole. The carbon dioxide used by a BTC transaction is equivalent to the carbon dioxide required to complete 1.26 million Visa transactions…or 95,000 hours of YouTube watching. To make matters worse, the electricity consumed by this single transaction is equivalent to the electricity consumed by an average American household in 40 days. Just a few weeks ago, this number was approximately 28 days.

This is an increasingly serious problem, not a better one. Did you know that the environmental organization Greenpeace said: It will no longer accept donations Made with Bitcoin.

To make matters worse, some heavyweights in the crypto industry believe that unless the problem is urgently addressed, Bitcoin may collapse completely as companies and governments unanimously pledge to take action and mitigate the effects of climate change. The COP26 climate summit will be held in Glasgow and New York later this year Recently announced a proposal to ban Bitcoin mining Working in the state for three years-politicians worry that this cryptocurrency may cause it to miss its environmental goals.

Vitalik Buterin, the co-founder of Ethereum, recently admitted in an interview with CNN that in the process of seeking large-scale adoption of Bitcoin, Bitcoin’s energy consumption is “absolutely huge” and there is “huge downside”. He also issued a stern warning: “If Bitcoin sticks to its technology as it does now, there is a great risk that it will be left behind.”

Currently, Ethereum itself is making huge changes. Blockchain is currently based on the consensus mechanism of proof of work, but it is now undergoing a consistent transformation towards the direction of proof of rights. Some cynics will think that the main motivation for this ambitious transition is the scalability issues that plague the network, because people firmly believe that PoS will enable Eth2 to process more transactions per second.However, there are also environmental benefits, and research shows that the algorithm will Energy saving is as high as 99%.

As Buterin said in a CNN interview:[We’ll] From consuming the same energy as middle-level countries to consuming the same energy as villages. “

Climate: a hot topic

The Blackstone Group is the world’s largest asset holder. CEO Larry Fink said in a recent visionary letter to business leaders that climate change “provides a historic investment opportunity.” He added: “In our client’s priority list No question ranks higher than climate change. They ask us almost every day.”

This laser-like focus on Environmental, Social and Governance (ES&G) projects helps to change the narrative. These measures are no longer regarded as a consumption of profit margins, but an absolute necessity that the world’s largest companies must accept. Just like Bitcoin, they risk being abandoned, unless they adapt… and fast.

Morningstar’s data shows that the total assets under management of ES&G funds have increased sharply in the last quarter of 2020, exceeding US$2 trillion for the first time. This coincides with Joe Biden as the President of the United States, and his administrative choices make climate change the central theme of his president.

Carbon offsets, plastic offsets and other forms of climate credits have become a new reality in the business world, which means that companies below certain emission levels can effectively sell their remaining capacity to other companies for profit. But this is not without challenges. Companies cannot always be sure that the goods they buy are real, and there has been a real demand for specific data.

What is the answer?

Although blockchain is often condemned as part of an environmental problem, an Albuquerque startup believes that the technology has the ability to be part of the solution.

I deviated An innovative blockchain program has been developed that advances sustainability efforts through ES&G infrastructure, which provides “zero net emissions of Bitcoin and Ethereum”. It has established a series of partnerships with companies focused on ES&G, including waste collectors, renewable energy producers and data analysis companies.

The company’s CEO Tom Anderson believes that the core advantages of blockchain can build trust when verifying ES&G ratings and assets. He emphasized that although these networks have become home to well-known cryptocurrencies and NFTs, these databases are particularly suitable for tracking the ownership of assets and records. Over time, it has the potential to become the ultimate destination of provable, auditable data-providing companies with a way to update their progress in ES&G in a way that investors can verify.

“Blockchain and environmental sustainability can coexist,” Anderson said. Distributed ledger technology is not inherently wasteful, and the benefits of blockchain far outweigh the harm to the environment. Devvio’s efficiency is only 1/1,000,000 of Bitcoin’s energy consumption, and you will get all the benefits without having to pay environmental costs. “

He added: “The literal design of Bitcoin is to waste energy in the consensus mechanism, but there are other ways to run the blockchain. I don’t think anyone can truly imagine the energy usage of Bitcoin like in 2009. Although we Created a system with significantly improved efficiency, but given the potential of blockchain, I think this is just the tip of the iceberg as a trusted source of truth for all ES&G data and assets.”

Devvio is firmly focused on corporate customers, saying that the world can no longer ignore ES&G issues. Anderson added that this is an “exciting time” for companies, and as most of the world’s 1,000 largest companies assess their environmental impact, “huge opportunities” have emerged.

He added: “In a person’s life, there are few opportunities to build such a strong business and at the same time be able to do so well in the world.”

Disclaimer. Cointelegraph does not endorse any content or products on this page. Although we aim to provide you with all the important information that may be obtained, readers should conduct their own research before taking any actions related to the company and take full responsibility for their decisions, and this article should not be regarded as investment advice.

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