A few days ago I woke up in the middle of the night with some thoughts around crypto and climate. Do they have anything in common, can we find some synergies? Is there any way to create efficiencies in both spaces while we see crypto mainly negatively impacting climate due to mining? I’ve been researching this topic for a while and I found a couple of interesting initiatives that seem to get along with climate quite well minimizing or eliminating mining impact on global warming.
A quick intro to what mining has to do with climate:
Some studies warned that Bitcoin could push global warming beyond 2°C. It’s estimated that bitcoin mining in China alone could generate 130 million metric tons of CO2 by 2024. Globally, Bitcoin’s power consumption has significant implications for climate change and does not help with achieving the goals of the Paris Accord. It generates an estimated 22 to 22.9 million metric tons of CO2 emissions annually. It can be translated to the CO2 emissions from the energy use of 2.6 to 2.7 billion homes for one year.
Ethereum, the 2nd most popular cryptocurrency after Bitcoin, creates the NFTs. The average NFT generates 440 pounds of carbon. It’s the equivalent of driving 500 miles in gas-powered car-producing emissions 10 times higher than the average Ethereum transaction. There is an option to replace the current use of energy with more renewables, move away from proof of work and create greener cryptocurrencies and partially solve the problem.
Source: Bloomberg
Mining necessary to create bitcoins requires vast amounts of energy but mining is not a problem itself. It translates into the emission of hundreds of millions of tons of greenhouse gases and even if we produce much more energy than we consume, excessive energy consumption seems to be something we can be more conscious about though. The way we approach the process and if we do something in exchange can be a good way to offset the process side effects.
Existing Solutions & Initiatives
Bitcoin Mining Council was set up to promote energy transparency. Their broader mission is to promote transparency, share best practices, and educate the public on the benefits of Bitcoin and Bitcoin mining.
Klima DAO is a project focused on addressing climate change in a new way, by creating a DeFi token that is backed by real-world carbon offsets. Buying carbon offsets has become a popular way for organizations and individuals to mitigate their carbon emissions, thereby reducing their overall carbon footprint. This typically involves buying into projects that reduce carbon emissions such as tree planting programs, renewable energy projects, and direct carbon capture.
Klima DAO created a system that locks in these carbon offsets and called it Base Carbon Tonnes (BCT). Every Klima that is minted locks in a BCT in the Klima DAO treasury thereby taking the offset off the market. That will have the effect of removing carbon supply and will potentially make the remaining supply more valuable. More info about the project here and here.
Also, blockchain technology is currently making big efforts to fight against climate change. Several platforms as well as charity tokens have started fund-raising initiatives for good causes and upped their game by increasing climate awareness through sound campaigns.
Raiinmaker is a blockchain-built influencer marketing platform that has been running charity campaigns. The company challenged stakeholders with the debut of its Global Field Day campaign, which kicked off on August 23 and is set to end on October 22. Laudato Tree, a youth-powered movement that seeks to grow about 7 million trees on Africa’s great green wall is one of the beneficiaries of the program.
Elongate (launched in March 2021) is a cryptocurrency trading on the Binance Smart Chain. It was conceived as a crypto project with a social and environmental impact as it gives 10% of every transaction fee to donations. According to NASDAQ, Elongate has raised $3.25 million as of September for notable NGOs like Children International, Human Relief Foundation, and Action Against Hunger.
Saveplanetearth.io (SPE) has a wide array of strategic partnerships, academic support, and a promising cryptocurrency community. SPE is looking to meaningfully change the planet’s outlook through carbon appropriation with the help of global groups and the public alike.
In April this year, blockchain ecological project SafeEarth announced the donation of more than $100.000 to The Ocean Cleanup charity, in charge of removing plastic waste off critical ecosystems. From each token transaction, part of the fees will be used for further donations to charities that focus on green initiatives.
Protocol Labs and Energy Web complete the first showcase of an open-source solution to decarbonize Filecoin. It’s an open-source solution for decentralized renewable energy purchasing by crypto miners.
Blockchain platform Cardano, for its part, intends to plant trees as part of their first “global impact challenge.” Cardano Foundation pledged to plant 1 million trees in Madagascar, and potentially, in Kenya and Southeast Asia.
The goal for the crypto sector is to leverage its digital origins and understanding of the benefits of decentralized technologies to bring new solutions to the market.
1) decarbonize the crypto (and any other) sector with renewables and carbon offsets
2) verify this decarbonization (how to run the process of verification is explained below)
Green Hashrate software enables any crypto miner to verify its use of renewable energy to power its operations. This solution will make it easier for a given miner to prove their green sourcing to investors, regulators, and green mining pool operators.
Energy Web is developing open-source technical architecture to create tokenized pools for crypto miners, exchanges, and investors to procure verified energy attribute certificates (EACs) and carbon offsets. In this architecture, which is inspired by the U.S. Dollar Coin (USDC) model, EAC and carbon offset providers mint their respective supplies, then deliver verification of EAC and offset cancellations on the applicable EAC and carbon offset registries — all on a public blockchain — so that crypto (or any other) buyers can prove their environmental claims. This solution will offer a new digitized option for any crypto market participant to cover its respective energy use or carbon emissions associated with the energy use of its crypto holdings/activity.
Crypto Climate Accord brings sustainability to crypto and makes crypto green. They want to deliver the crypto industry an open-source toolbox of tech solutions to decarbonize and prove progress.
Surging demand for cryptocurrencies and accelerating adoption of blockchain-based solutions have highlighted an important issue: the technology’s growing energy consumption and its impact on our climate. Crypto Climate Accord is working collaboratively with the crypto and blockchain organizations to accelerate the development of digital #ProofOfGreen solutions and set a new standard for other industries to follow. Inspired by the Paris Climate Agreement, the CCA is a private sector-led initiative for the entire crypto community focused on decarbonizing the cryptocurrency and blockchain industry in record time. As of now, more than 200 companies and individuals have joined the Crypto Climate Accord as Supporters.
The Blockchain & Climate Institute (BCI) is a progressive think tank providing leading expertise in the deployment of emerging technologies for climate and sustainability actions. As an international network of scientific and technological experts, BCI is at the forefront of innovative efforts, enabling technology transfers, to create a sustainable and clean global future.
They have a great list of articles about how blockchain can accelerate development and make the transition to more sustainable and environmentally friendly solutions:
–>Blockchain, waste management, and the circular economy
–>How blockchain technology can advance circularity in Global Material Flows
–>Payment for Ecosystem Services and the Applications of Distributed Ledger Technology
–>Blockchain in the maritime sector
–>Industrializing Transition Risk Quantification for Real Estate
–>A Matter of Trust – Climate Finance
Coinbase Chief Policy Officer Faryar Shirzad proposed a commitment to voluntary reporting:
“It may be time for our industry to partner with established leaders in carbon accounting and reporting to develop a bespoke, standardized framework for assessing and disclosing the climate impacts of crypto mining, trading, and holdings.”
Curiosities
Environmentally-friendly NFT – Marissa Sher has recently created the “Memories of Earth” series. Her practice entails building miniature sculptures from found and upcycled objects, then using a combination of mechanical, projection, and special effects techniques to film and composite them digitally.
