[ad_1]
The cryptocurrency industry, with its questionable carbon footprint, now has a convenient way to showcase its green credit on a verified (rather than reliable) basis.
But that raises a tricky question: Companies like Amazon and Google, whose processing takes place largely within directly owned and controlled data centers, are able to contract clean energy with relative ease and accuracy. But who do you ask if you want to make Bitcoin greener?
Announced Wednesday, Energy Web, a nonprofit organization focused on decentralized approaches to network decarbonisation, wants to show how a large blockchain platform can move to a zero carbon footprint. For starters, the organization is partnering with San Francisco-based Ripple and the XRP Ledger Foundation.
Ripple’s support for this venture is intended to open the door to other blockchains with more energy-intensive operations such as Bitcoin, said Jesse Morris, chief commercial officer of Energy Web.
To make this possible, the nonprofit has released an open source app called EW Zero that makes it easy for individuals, businesses or even entire blockchain ecosystems to make the transition. This initial deployment uses energy attribute certificates (EACs) from renewable energy sources to decarbonise the electricity, the companies said.
“Blockchains are a huge energy hog and a lot of that electricity doesn’t come from wind, solar, hydro or other sustainable plants,” Morris said. “So we’ve been thinking for some time about how we can help the cryptocurrency industry decarbonise blockchains, given the distributed nature of the technology.”
First, Ripple
In the case of Ripple, a 500-person fintech firm focused on crypto banking, there is an obvious starting point when it comes to reducing the company’s carbon footprint. Furthermore, Ripple uses a consensus system quite different from Bitcoin’s proof-of-work (PoW) mining, an algorithm that by definition must burn a ton of electricity. (Ultimately, the top five PoW blockchains currently use up to 170 terawatt hours (TWh) of electricity per year, more than New York state.)
As such, bitcoin isn’t really comparable to something like pre-mined XRP running on Ripple, which many claim encompasses much more than a centralized system.
Presented with these remarks, Ken Weber, Ripple’s head of social impact, said it would be helpful in this case to put aside technology-based tribal differences and take more of an “all in one” approach.
Read more: Can Bitcoin Survive the Climate Change Revolution?
“It is the beginning of all these currencies, which now hold a small share of global finance, but beyond [green energy adoption] it will be much more difficult to reverse engineer, “Weber said.” We wanted to help make it easier to adopt these practices. This is not a proprietary desire on Ripple’s part; it is a desire of the whole system. movements of social change, the idea is not to make anyone feel guilty or ashamed, but to give them a means to do so that is reasonable, beneficial and participatory “.
Crypto ESG
Alex de Vries, the founder of Digiconomist, which identifies trends in cryptocurrencies, said that carbon offsetting is taking place at the level of cryptocurrency exchanges looking to do business with traditional financial institutions following environmental, social and corporate governance mandates. (ESG).
“Ripple is taking advantage of the fact that people associate heavy power consumption with blockchains, but this is just real proof of work,” de Vries said. “With Bitcoin, you are talking about an extreme carbon footprint of 300 kilograms per transaction. I didn’t count on Ripple, but it will be closer to a Visa transaction, which is 0.4 grams per transaction.”
Read more: Hyperledger Conference Shows Where Blockchain Can Fight Global Warming
However, this is a step in the right direction for a relatively young industry that could become one of the first to be carbon neutral, said Morris of Energy Web. In the same way that large corporations use certificates to decarbonise supply chains. complex, blockchain users can purchase certificates from different places around the world (EW Zero also uses a blockchain system to track and account for these certificates).
“Imagine in the future that you have a wallet that interacts with a blockchain, and as part of that wallet you can actually increase the transaction fee slightly and you just helped decarbonise the blockchain by purchasing a certificate somewhere,” Morris said. “Or, if you are a bitcoin miner in a mining pool, you can also use this application to directly purchase certificates in a specific part of the world.”
The impetus to do this is twofold, said Walter Kok, CEO of Energy Web.
“First, on the supply side, it will be useful to connect existing green energy producers who already serve Bitcoin, which may have green energy overcapacity,” Kok said, adding:
“The other part won’t happen overnight, but in the end everyone wants to be sure they are contributing to a better world. So we get to the point where we can confidently say that all blockchains, including Bitcoin and all its miners, produce in an environmentally friendly way. “
