Decarbonizing cryptocurrency in record time – the race towards creating a green crypto world
One of the key problems of cryptocurrencies lies in the environmental impact that digital transactions have. The process of mining for bitcoin is particularly very energy intensive. With concern over the environmental impact of cryptocurrencies growing, increasing numbers of investors are looking for new ways to enjoy the benefits of digital currencies in the more eco-friendly ways, and move towards a green crypto environment.
The Crypto Climate Accord (CCA) aims to reach net zero emissions by 2040. They had officially announced this April to limit the impact of harmful environment created by cryptocurrencies by inviting private sectors to add renewable energy to all the transitions of blockchains. The CCA aims for the alteration to happen by 2030 if not sooner.
By 2040, it wants the crypto industry to be carbon neutral where greenhouse gases will be still merged into the atmosphere but in a balanced way. New technologies will be created to emit those gases and act as a filter. These moon shot goals can be an inspiration to other industries as well.
This initiative is led by Rocky Mountain Institute and the Energy Web Foundation who are non profit companies that focuses on sustainability and transition to low carbon footprints. Adding to the cause is the Alliance for Innovative Regulation which is an international advocacy group that speaks for the implementation of balanced financial systems. Even Tesla’s Elon Musk flipped his company’s plans to deal in green crypto, owing to the climate change concerns. From crypto enthusiasts to billionaires who wants to fund the industry have raised their concerns.
A report by the Cambridge University reported stated that Bitcoin mining alone consumes about 112.57 terawatt hours of energy per year which is more than the total power consumption of some countries. Even El Salvador, the first nation state to legalize Bitcoin has stated that it is looking for cleaner energy alternatives for Bitcoin mining within its borders. As per new law, El Salvador will be mining the cryptocurrency using geothermal energy from its volcanoes.
The aim is to balance the planet as well the global economy. For the crypto industry, it can help support the widespread adoption of crypto by making it more sustainable and scalable industry. While for the tech industry, it can onboard an entirely new class of customers with significant demand for energy.
The Crypto Climate Accord plans to act as a coordinating framework to decarbonize all the aspects of the industry. Energy Web, AIR, and RMI have developed three high level objectives which will be finalized with supporters in advance of the United Nations.
The real solution, some would argue, is to convert all the electricity production to renewable sources, thus helping to move towards green crypto. This can be done by cleaning up the past, reject future emissions and push the boundaries of climatic leaderships. To that, Energy web has launched an open source software solution called Green Hashrate that will track and verify green Bitcoin mining. There is also risk involved. If cryptocurrencies see a boom due to the use of renewable and more people invest in mining, the underlying difficulty will increase again. An increase would mean more energy consumption and that would lead us back to square one. More fossil fuels to meet the burgeoning demand.
Non profit organization’s aren’t the only ones supporting and understanding the need of CCA but other crypto mining firms, for instance, a UK based Agro Blockchain have also partnered with CCA last month. Over 45 companies and individuals have joined the accord as supporters according to CCA’s website. They believe collaborating with other like minded players, who believe this technology can lead to a blockchain renewable energy revolution through collective actions. Seems the crypto industry has no choice but to support the CCA.