Bitcoin to green the planet? – Ecology is now at the center of the concerns of the general public, but not only. These subjects are gradually being transformed into strategic issues and are entering the heart of government policies. And, if against and against the a prioriBitcoin and blockchain technology as a whole were proving to be the missing link to give a new impetus to green initiatives worldwide ? Let’s dig in detail into a climate issue that is increasingly central to our societies.
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- 1 The blockchain is green, a reality beyond appearances?
- 2 The blockchain, an ecological monitoring tool
The blockchain is green, a reality beyond appearances?
Always decried, often considered as part of the environmental problem, blockchain and cryptocurrencies, from the beginning of their short existence, have not had it easy. In this report, we are going to show that far from being the cause, these new technologies, beyond the prejudices, could in reality provide solutions. And, finally, to constitute a real lifeline in the fight against the evil of our century, climate change.
While our planet shows, each year a little more, dramatic signs of alteration of its ecosystem, through the multiplication of natural disasters and the disappearance of species, acting is becoming much more than an emergency. And, blockchain technologies may well have a major role to play in the near future.
A blockchain sector aware of its ecological duty
Ecology is an integral part of the major concerns of developers who implement blockchain technologies. The proof is that many are those who want to be carbon negative like MultiversX (formerly Elrond). Or who act to reduce their impact on the environment. It is not for nothing that the second cryptocurrency in the sector in terms of capitalization, Ethereumproceeded to set up The Merge in September 2022.
Certainly, the initial objective of this evolution planned since 2015 was to allow the network to move to the next level in terms of scalability. However, in concrete terms, the environmental impact of the blockchain has been virtually eliminated. A radical paradigm shift that has enabled blockchain reduce by 99% its energy expenditure and its CO2 emissions by switching to Proof of Stake (PoS).
On the other hand, the second layer network polygon has announcement in June 2022 having bought for $400,000 in carbon credits with the help of KlimatDAO. With the help of this pioneer in the tokenized carbon credits market on-chain, the network has been able to offset all the greenhouse gases emitted since the creation of its blockchain. Polygon thus theoretically becomes carbon neutral.
The Ethereum Climate Platform
Regarding Ethereum, the network does not want to be satisfied with this drastic reduction in its energy consumption. He wants to go further. Its environmental impact is the subject of particular attention. The proof is that during the COP27 on climate, the team made a resounding announcement. She announced the creation of the Ethereum Climate Platform.
With the help of 18 companies in the sector, including ConsenSys and AAVE, the objective will be to offset all the carbon dioxide emitted since the creation of the blockchain. Pollution generated by its operating system in Proof of Work (PoW) until the implementation of The Merge in September 2022. This compensation will finance innovative projects that respect the environment. The objective is clear, not to leave the slightest trace of its passage in terms of ecological impact on our planet.
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The blockchain, an ecological monitoring tool
Despite all the ecological announcements associated with this or that firm highlighting their environmental efforts in the press, it is difficult to discern the true from the false. Hidden behind complex metrics and reports subject to interpretation, the ecological actions of companies are often opaque. Black boxes from which it is difficult to discern the real benefit for our planet. However, this lack of transparency could easily be filled by the use of blockchain technology. This open-source digital ledger would make it possible to trace and quantify step by step the efforts of the various actors in the ecology sector.
Using the blockchain, it becomes easy to follow the carbon balances of companies. As well as the environmental measures taken. In fact, it would be possible to unambiguously verify the concrete involvement of those who claim to act in favor of safeguarding our planet and asserting a carbon-neutral model. Typically, smart contracts (smart contracts) could be implemented within business processes. They would thus trace the rate of CO2 emissions generated at each stage of the manufacturing process of a product. And, this in a completely automated way. This data could then be made public, attesting with certainty to the environmental impact of a company.
Moreover, thanks to the technology Zero Knowledge Proof, it is now possible to reveal the irrefutable proof of a piece of data while protecting the underlying information that made it possible to establish it. Thus, companies would be able to communicate their ecological performance while protecting their sensitive data from the competition.
The blockchain to track and certify ecological initiatives
The technological contribution obviously does not stop at recording the ecological impact of companies. As we have seen, the blockchain also makes it possible to create a carbon credit tokenization system, but not only. The advantage of a tamper-proof registry is that it is able to record and secure any type of activity. From the amount of water used in a given geographical area to monitoring the production of plastics, for example. Governments would be able to monitor all these activities, but also to set limits that should not be exceeded. While ensuring compliance with these measures via the blockchain.
Bitcoin, beneficial energy consumption for the ecological transition
The Bitcoin network consumes energy, that’s a fact. But the whole question is to determine what type of energy is consumed. Using energy in itself is not a harmful fact, on the contrary. It drives our economy. On the other hand, if all the energy on the planet was green, Bitcoin would be environmentally friendly as a result. The problem is not with the Bitcoin blockchain, but with the ubiquitous use of carbon energy in our societies.
The pollution generated by the operation of Bitcoin is, moreover, a drop in the ocean. Recent reports, published in particular by CoinSharesdemonstrates that the Bitcoin network is actually about 0.08% of global CO2 production.
Moreover, to really understand the ecological impact of Bitcoin, you have to go back to the basics of how it works. Mining machines consume electricity to generate bitcoins, indeed. And in doing so, they secure an uncensorable network that allows financial exchanges on a planetary scale, it is also a fact. It must be kept in mind that miners, to increase their profitability, seek to obtain the cheapest energy in the world. But the cheapest energy is the one that no one wants. And very often it is surplus electricity that would be lost anyway. Or an intermittent energy production system, which is difficult to store. The perfect example? Renewable energies. Solar panels, wind turbines, hydroelectric dams… These are the installations of choice for mining machines. Therefore, the miners are in fact providing additional funding to this whole renewable industry.
Bitcoin, unexpected aid for the development of electrical infrastructure
On the other hand, mining occurs recurrently around the world to serve as financing for power supply projects. Initiatives that would otherwise never have seen the light of day. Because funding is needed following the construction of a dam to bring electricity to the populations by building a distribution network. Mining machines, easily transportable, can be connected as close as possible to the installations. They thus ensure a minimum income for the actors. This income allows them to finance the necessary infrastructure to connect to homes and meet demand. Without this early-stage funding provided by miners, all these initiatives would disappear before they even saw the light of day.
In this sense, Bitcoin, too, can serve as a formidable engine in the democratization of renewable energies and accelerate the ecological transition. While giving access to energy to as many people as possible.
Criticisms about the energy expenditure of Bitcoin, cryptos and the blockchain are, in a recurring way, relayed wrongly by the media. Media that very often have not taken the time to dig below the surface. Energy consumption is not harmful in itself, it all depends on its nature and its use. In addition, the blockchain sector demonstrates day after day the omnipresence of its actions to move towards a greener world. It is not for nothing that Bitcoin and cryptos are one of the greenest industries on the planet. Let’s hope governments realize this in time to take advantage now of the great support that the sector is capable of contributing to the fight against climate change, which rightly worries the entire planet.
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