Crypto carbon: Investing in carbon offsetting projects, or by changing their business activities to adhere to the development of sustainable models, could make crypto even more sustainable, says Alexis Normand, Co-Founder of Greenly.
Cryptocurrency has taken the market by storm. It is a revolutionary way to pay for things without the need to consult a third party in the midst of a purchase. Replacing popular contactless payments like Venmo or Apple Pay, cryptocurrency has gained the interest of investors and consumers alike.
As interesting and innovative as the concept of cryptocurrency is – it isn’t all that green or good for the future of the environment.
Cryptocurrency, while it isn’t great in the fight against climate change, has presented a unique set of benefits. For instance, one of the biggest plusses to implementing the use of cryptocurrency is improving upon the corrupt use of traditional currencies. Basically, cryptocurrency allows the power of the currency to remain in the user’s hands, whereas the twenty-dollar bill in my wallet today may not be worth the same amount tomorrow.
But does that sustainable value make up for the deleterious effect that cryptocurrencies have on the environment?
Crypto carbon: The numbers behind crypto mining
Cryptocurrency requires mining, extensive use of energy, and definitely doesn’t meet the requirements to reach net-zero emissions by 2050. For example, Bitcoin, one of the most popular cryptocurrencies, uses almost 91 terawatt-hours of electricity annually, even though, latest news say it uses 10.9% renewable energy. That’s more electricity than Finland needs to power their country of 5.5 million people for an entire year.
Ethereum, the second-largest company that deals with cryptocurrency behind Bitcoin, recently finalized “the merge” in efforts to reduce their use of energy. Long story short, we are still waiting to see the beneficial results of the project which meant to cut out the middleman – or the miners of cryptocurrency.
Mining is the most energy intensive and highest carbon emitting component to the process of harvesting cryptocurrency. By eliminating the need for mining, Ethereum is trying to position itself as a sustainable crypto giant. But it still has a lot of work to do before been seen as one.
The amount of energy used by cryptocurrency companies is alarming. Ethereum alone is responsible for 0.34% of the world’s total energy. While this may not seem huge, it’s taxing on the globe’s limited supply of energy. It is commendable that a cryptocurrency company like Ethereum is attempting to make use of blockchain technology to decrease their emissions. But the entire sector of cryptocurrency needs to widen their sustainability efforts.
In 2020 alone, Ethereum was responsible for producing 16.6 million tons of carbon dioxide emissions. In order for Ethereum to
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