What is a green blockchain?
The US White House published a report last year highlighting the impact of crypto mining on the climate. Energy consumption has been a topic of debate among regulators and crypto-cynics for a long time. Some have completely rejected cryptocurrencies, calling them a threat to the environment. But all is not lost, there is a green blockchain.
According to the US release from the White House, the total global electricity consumption of cryptoassets is between 120 and 240 billion kilowatt hours per year. This corresponds to 0.4% to 0.9% of annual global electricity consumption. Crypto mining uses as much energy as Australia or Argentina in a year.
The energy consumption of cryptocurrencies has remained a concern for the industry despite most mining taking place in remote locations in the world with renewable energy. Crypto mining is a process necessary to verify transactions and add new blocks. The most energy-intensive consensus mechanism is Proof of Work, which is used by the leading cryptocurrency Bitcoin.
The industry is racing to find a better, cleaner way to mine crypto and reduce its carbon footprint. Several new projects are striving to achieve 100% Green Blockchain to reduce environmental impact.
What exactly is a green blockchain?
A blockchain whose consensus mechanism does not contribute significantly to climate change through greenhouse emissions is called a green blockchain. Blockchains that rely on proof-of-stake, which is a less energy-intensive mechanism for validating transactions than proof-of-work, are more environmentally friendly.
The energy consumption of crypto mining remains a major issue that persists before regulators. The question of whether cryptocurrencies will become mainstream in the future depends on whether the industry can reduce its carbon footprint.
How do you make blockchain green?
Many of the top cryptocurrencies on the market use proof of work (PoW) to validate transactions. With the PoW mechanism, powerful computers must solve complex puzzles to complete verifications, and validators compete to solve the same puzzles.
On the other hand, Proof-of-Stake offers tokens as a reward, but validators are chosen randomly. Instead of solving complex puzzles with heavy machinery, validators have to put up a small amount of their cryptocurrency as collateral for a chance to be chosen to validate transactions.
What is the carbon footprint of Blockchain?
Reducing the amount of energy needed is the most feasible way to green a blockchain, especially given that it is fixed at the protocol level. This means that stakeholders do not have responsibility at an individual level for managing the carbon footprint. The biggest challenge with this option is that some inherent security aspects have to disappear.
On the other hand, it can be challenging to limit the energy use of the network to only what comes from specific sources. However, it is not a measure that can be included in the protocol.
According to a report by Forexsuggest.com, the entire Bitcoin network emitted about 86.3 million tons of CO2 emissions in 2022. To remove Bitcoin’s annual emissions from the atmosphere, it would require approximately 431.6 million trees.
Which is the most famous green blockchain?
There are many blockchain networks that are environmentally friendly and do not leave a massive carbon footprint. The proof-of-stake blockchain Algorand is built with an environmental focus and has made great strides towards achieving a negative carbon footprint.
Algorand also partnered with ClimateTrad, enabling them to track their emissions in pursuit of broad sustainability goals. Climate Trade uses blockchain technology to help businesses offset their carbon footprint. Many blockchain platforms purchase carbon offsets to offset their emissions. However, it is still debatable whether this technique has an impact or not.
A carbon offset is a reduction or removal of emissions of carbon dioxide or other greenhouse gases made to compensate for emissions made elsewhere. However, environmentalists do not advocate the idea of buying carbon offsets as a way to reduce carbon emissions. Most companies use carbon offsets as a shield to continue engaging in their unsustainable behavior.
Offsetting carbon emissions means planting trees and setting up renewable energy sources for poor communities. While they are important things and have a positive impact, they do not completely cancel out carbon emissions from other activities. So if you see a project that boasts of being environmentally friendly by buying carbon offsets, understand that it’s just a PR campaign.
Blockchains are transitioning to environmentally friendly mechanisms
Last year, one of the largest blockchain networks Ethereum moved from proof-of-work mechanism to proof-of-stake to reduce carbon emissions by 99%. Although bitcoin continues to remain a proof-of-work network. Solana, Tron, Cardano are among the best networks that use proof-of-stake mechanisms to keep the mining process carbon neutral. Polkadot and Avalanche are also environmentally friendly blockchain networks.
It is certain that the future belongs to environmentally friendly blockchain networks. Ethereum has already set an example of how important it is to reduce the carbon footprint of crypto mining.
