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Several Crypto Mining Operations Busted in Russia

Several Crypto Mining Operations Busted in RussiaAuthorities and power utilities in various Russian regions have shut down illegal crypto mining farms, seizing hardware and taking operators to court. The action against the coin minting facilities comes amid discussions on a proposal to introduce criminal liability for miners breaking the upcoming legislation for the industry. ‘Underground’ Crypto Mining Farms Shut Down Across […]

‘Surgical removal’ of crypto will only weaken USD dominance, commentators say

At Least 1,000 Lawsuits Filed Against Crypto Miners in Russia’s Irkutsk Region

At Least 1,000 Lawsuits Filed Against Crypto Miners in Russia’s Irkutsk RegionAuthorities in the Russian region of Irkutsk have so far filed 1,000 lawsuits against what they call “gray” miners, or people minting coins in their homes. In over half of these cases, courts have ordered the defendants to compensate the operators of the distribution networks. Hundreds of Crypto Miners Sued in Irkutsk for Extracting Digital […]

‘Surgical removal’ of crypto will only weaken USD dominance, commentators say

Bitcoin miners as energy buyers, explained

Bitcoin miners as energy buyers utilize renewable energy sources and excess electricity offered by utility companies to fuel their mining operations.

Does the energy system benefit from Bitcoin mining?

Bitcoin mining can spur demand for electricity, which can help advance the development of renewable energy sources, but it also uses a lot of energy and raises carbon emissions.

On the positive side, electricity demand generated by Bitcoin mining can be utilized to promote the development of renewable energy sources and speed up the transition away from fossil fuels. This is due to the fact that Bitcoin miners frequently look for inexpensive electricity, and renewable energy sources, such as solar and wind power, can offer this at a reasonable rate. Thus, Bitcoin mining can be viewed as a strategy for encouraging the creation of renewable energy plants.

By using extra energy that would otherwise be wasted, Bitcoin mining can also help the energy system. For instance, miners might decide to set up operations next to hydroelectric dams, which frequently have additional energy available at particular times of the day. Miners can contribute to improved utilization of the already available energy resources by employing this extra energy for mining.

On the other hand, mining Bitcoin may have detrimental effects on the energy infrastructure. For instance, mining can be a substantial energy consumer because it calls for a lot of processing power, resulting in a hike in the demand for electricity, which would raise energy costs. Additionally, increasing carbon emissions, which can contribute to climate change, may result if miners primarily use fossil fuels to produce electricity.

How do renewable energy resources benefit Bitcoin mining in rural areas?

Renewable energy sources offer a more reliable power supply for Bitcoin mining operations since they are less prone to experiencing power disruptions. Additionally, using sustainable energy for Bitcoin mining can support job growth and economic expansion in rural areas.

In the context of Bitcoin, gridless computing, which refers to the usage of alternative computing resources such as edge devices, can encourage the use of renewable energy resources to mine BTC in Africa. That said, gridless computing offers an alternative to the centralized electrical grid, which is often unreliable or unavailable in many parts of the continent. This can enable miners to operate in remote or off-grid locations using locally generated renewable energy sources, such as solar or wind power.

The lack of electrical infrastructure in many rural parts of Africa makes it challenging to establish and run conventional mining operations. Gridless computing, on the other hand, enables miners to power their mining machinery with portable, decentralized renewable energy sources like solar or wind turbines. This enables miners to establish operations in remote locations and make use of the region’s abundant renewable energy resources.

Gridless computing can also promote the growth of community-based mining operations, which can assist nearby areas economically by generating jobs and sources of income. By offering education and training on sustainable energy methods, these community-based mining companies can also encourage the adoption of renewable energy sources.

How do Bitcoin miners act as energy buyers?

To power their mining operations, Bitcoin miners either purchase electricity from conventional and renewable energy sources or develop and run their own renewable energy facilities, turning them into energy consumers.

Miners typically purchase electricity from energy providers, such as utility companies or independent power producers, to mine BTC. They then use that electricity to power their mining equipment. This can include both traditional energy sources, such as coal or natural gas, as well as renewable energy sources, such as solar or wind energy.

Hydro-Quebec, a Canadian utility company that sells electricity to Bitcoin miners, is a real-world example of how Bitcoin miners act as energy buyers. In order to take advantage of the low electricity prices in the province, the firm has been actively courting Bitcoin miners to establish operations there and utilize excess hydroelectric power to mine BTC.

In some circumstances, miners might also sign long-term agreements with energy suppliers, which could provide them access to a more reliable and consistent source of electricity. Large-scale miners can benefit the most from this, as it enables them to plan and budget for their energy requirements in advance.

By establishing and running their own renewable energy facilities, such as solar or wind farms, Bitcoin miners can also take on the role of energy users and function as energy purchasers. By doing this, they support the switch to sustainable energy sources as well as securing energy for their mining activities.

For instance, a Bitcoin miner called Genesis Mining has established operations in Iceland and is running them using geothermal and hydroelectric energy. This allows the miner to benefit from Iceland’s plentiful renewable energy resources and lessen its environmental impact. Additionally, one of the largest Bitcoin mining facilities in the world, KnCMiner, is powered by a wind farm that the company developed on its own land in Sweden.

To make use of extra energy that would otherwise be wasted, miners may also choose to locate their mining operations next to existing renewable energy facilities, such as hydroelectric dams or geothermal plants. For instance, the Bitcoin miner Greenidge Generation in upstate New York, U.S. generates electricity for its mining operations using extra natural gas from a local power plant. The company also constructed a 7-megawatt solar farm to help meet its energy requirements.

Do Bitcoin miners use renewable energy resources to mine?

While a sizable fraction of Bitcoin mining currently uses non-renewable energy sources, there is a growing tendency among miners to power their operations with renewable energy sources. It is likely that more miners will use renewable energy as it becomes more affordable to power their operations.

As already noted, Bitcoin mining uses a lot of energy for miners to validate transactions and add them to the blockchain by using powerful computers to solve challenging mathematical puzzles. Initially, the majority of Bitcoin mining took place in China, which is also the biggest generator of coal-based electricity in the world. As a result, non-renewable energy sources accounted for a sizable amount of the energy utilized to mine BTC.

When comparing Bitcoin mining by nation, the United States ranks the highest, making it a legal activity after Bitcoin mining was outlawed in China. The use of renewable energy sources by miners, such as hydroelectricity, is an increasing trend, though. This is especially true in areas with a wealth of renewable energy sources, such as Quebec and Iceland.

Additionally, due to a fall in the price of renewable energy sources, mining companies are beginning to use them to power their operations. Moreover, in order to fuel their mining operations, several businesses are also investing in their own renewable energy initiatives, such as solar and wind farms.

Why does mining crypto use energy?

The energy consumption of cryptocurrency mining is a trade-off for the security and decentralization of blockchain networks. However, through the use of sustainable energy sources and effective mining algorithms, there are ongoing efforts to make the process more energy-efficient and sustainable.

Mining crypto uses energy because it is a process that requires computers to perform complex mathematical calculations in order to validate transactions and add new blocks to a blockchain. These calculations use a lot of computer resources, which results in high energy usage. The main sources of energy consumption are the CPUs and GPUs, as well as the cooling systems necessary to keep mining rigs cool. 

The first step in mining cryptocurrency is to confirm the transactions on the blockchain network using a consensus algorithm such as proof-of-work, which calls for miners to solve challenging mathematical puzzles. Miners use specialized software and hardware, such as ASICs, to perform these calculations at high speeds. The first miner to solve the puzzle adds the following block to the blockchain and receives a specific quantity of Bitcoin (BTC) in return.

In order to increase their odds of becoming the first to solve the puzzle, miners are motivated to employ as much computer power as they can. As more miners join the network and competition heats up, the need for energy rises, resulting in increased electricity usage. According to some estimates, the entire energy use of the Bitcoin network alone might be comparable to that of a small nation.

The energy consumption of cryptocurrency mining is a concern because it has an environmental impact. The majority of the power required for mining is generated from fossil fuels, which cause the release of greenhouse gases such as carbon dioxide. The cost of electricity for mining can be rather high in some areas, which makes it less economical for miners.

‘Surgical removal’ of crypto will only weaken USD dominance, commentators say

Climate tech VC argues Bitcoin’s ESG positives outweigh its negatives 31:1

The Bitcoin network has a 31:1 positive to negative ratio according to climate tech VC Daniel Batten.

A climate tech investor has painted a bright view of the Bitcoin (BTC) network, suggesting BTC’s environmental positives outweigh its negatives by a whopping 31:1 ratio.

On Jan. 12, self-proclaimed philanthropist and environmentalist Daniel Batten claimed in a Twitter thread that “Bitcoin is probably the most important ESG technology of our time.”

According to Batten, the 31:1 positive impact ratio was calculated by researching and interviewing grid engineers, climate scientists, BTC mining engineers, methane abatement experts, and solar and wind installers.

The findings discovered 21 ways Bitcoin could be an environmental positive and just five ways it could be an environmental negative.

Batten said that the findings were “uncannily similar” to those for the solar industry.

Many of the positives involved renewable energy grids and benefits from mining such as being the leading technology for responding to grid power demand from over and undersupply. Bitcoin mining farms can be switched on or off depending on power demand constraints.

Additionally, BTC mining can be a solution for geographic curtailment. Power curtailment is a deliberate reduction in the output below what could be produced to balance energy supply and demand, or due to transmission constraints.

There are also benefits in innovation and methane reduction, according to Batten’s findings.

BTC mining can be used to reduce vented landfill gas and flare gas emissions by using this otherwise wasted energy to power rigs.

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The handful of negatives included network emission levels, e-waste production, and the opening up of previous fossil fuel sites. However, the environmental positives far outweighed these negatives, according to Batten who opined:

“Bitcoin mining’s rapid renewable adoption can inspire other industry sectors to follow.”

“We see Bitcoin mining can play a real part in global methane mitigation,” he concluded.

Related: Bitcoin could become a zero-emission network: Report

On Jan. 13, the SCMP opposed the notion that Bitcoin was good for the environment by reporting that BTC accounted for 86.3 million tons of carbon dioxide emissions in 2022.

However, it did acknowledge that Ethereum saw its CO2 emissions drop from 21.95 million tons in 2021 to 8,824 tons last year, according to the data from Forex Suggest. The Ethereum Merge and switch to proof-of-stake last year reduced network power consumption by 99.98%.

‘Surgical removal’ of crypto will only weaken USD dominance, commentators say

Sberbank Analyst’s Editorial Delves Into the ‘Tremendous Potential’ of a BRICS Reserve Currency Fueling De-Dollarization

Sberbank Analyst’s Editorial Delves Into the ‘Tremendous Potential’ of a BRICS Reserve Currency Fueling De-DollarizationDuring the last month, Russia’s ruble has dropped 16.48% against the U.S. dollar as energy and commodity prices have slowed over the last few weeks. Russia’s central bank revealed two weeks ago that it is further distancing itself from U.S. dollar dependence by purchasing the Chinese yuan on foreign exchange markets. Roughly around the same […]

‘Surgical removal’ of crypto will only weaken USD dominance, commentators say

1.5M houses could be powered by the energy Texas miners returned

Bitcoin miners appeared to be the model consumers for the ancillary services in the state.

During the winter storm in Texas in December 2022, Bitcoin (BTC) mining operators returned up to 1,500 megawatts of energy to the distressed local grid. It became possible due to the flexibility of mining operations and the ancillary services, provided by the state authorities. 

In his commentary to Satoshi Action Fund, Texas Blockchain Council president Lee Bratcher stated that miners returned up to 1,500 megawatts to the Texas grid. This amount of energy would be enough to heat “over 1.5 million small homes or keep 300 large hospitals fully operational,” according to the calculations from the Bitcoin advocacy group.

While there’s no specification regarding the exact time period in which miners have accumulated such an amount of power, the global Bitcoin mining hashrate dropped by 30% on Dec. 24-25, 2022. Miners appeared to be the model participants of ancillary services in the state, which stimulate customers to reduce their consumption during peak demand in order to stabilize the grid.

Related: Public Bitcoin mining companies plagued with $4B of collective debt

The winter storm in North America was so severe that it shut down Binance's cloud mining products from Dec. 24-26. During the days leading up to Christmas, a "bomb cyclone" unleashed extreme temperatures across the United States, leaving millions without electricity and claiming dozens of lives.

Back in March 2022, the Electric Reliability Council of Texas (ERCOT) established an interim process to ensure that new large loads, such as Bitcoin miners, can be connected to the ERCOT grid. Software providers have also begun working with miners to ensure they have the tools needed to properly enable grid balancing.

With its 14% share in Bitcoin hashrate, Texas is among the top states for Bitcoin mining in the United States, along with New York (19.9%), Kentucky (18.7%) and Georgia (17.3%).

‘Surgical removal’ of crypto will only weaken USD dominance, commentators say

Amid High Energy Demand From Miners, Russia Mulls Building New Power Plants in Siberia

Amid High Energy Demand From Miners, Russia Mulls Building New Power Plants in SiberiaGrowing electricity consumption in the crypto mining sector may require the construction of new power generation facilities in Siberia, the energy minister of Russia has acknowledged. Demand continues to increase in residential areas as well, after regional authorities abandoned a proposal to introduce higher tariffs for Russians minting digital coins at their homes. Authorities in […]

‘Surgical removal’ of crypto will only weaken USD dominance, commentators say

5 altcoin projects that made a real difference in 2022

2022 was tough on crypto prices, but ETH, LDO, MATIC, DAI and ATOM all made a positive impact on the industry.

Bitcoin (BTC), Ether (ETH) and the crypto market had a rough 2022 from a price perspective, but traders are hopeful that 2023 will include bullish developments that push crypto prices higher. 

Despite the market-wide downturn, a handful of altcoins continued to make a positive contribution to the crypto space and thanks to Ethereum, the term altcoin is no longer a derogatory term.

Let’s explore the top altcoins that made a difference in 2022.

Ethereum fundamentals shone in 2022

Ether’s price hit a yearly high at $3,835 on Jan. 2 and has struggled to regain footing amidst the bear market and other macro factors. The Ethereum network is the top project in 2022 not because of Ether’s price action, but for its fundamentals and for completing the long-awaited mainnet upgrade. The Ethereum merge was completed on Sept. 15, 2022 and while many feared the merge to proof-of-stake (PoS) could cause issues, the transition was flawless.

The main advantage of PoS is that it is much more energy-efficient than proof-of-work (PoW) because it does not require expensive and energy-intensive hardware to validate transactions. This reduces usage costs for the end user and makes it a more sustainable and scalable solution for Ethereum's long-term growth. The Merge also reduced the Ethereum network’s energy consumption by over 99.9%.

Some analysts are bullish on Ether post-Merge due to its emissions schedule becoming deflationary. Although daily active users have increased for the network, emissions have remained inflationary and Ether price is still down from yearly highs.

In 2023, investors are hopeful that increased transactions on the network creates higher demand for Ether and that this translates to a boost in the altcoin’s price.

Lido (LDO) brought Ethereum network staking to the masses

Lido’s makes it easy for users to participate in Ethereum PoS as validators by providing a simple interface for betting without having to reach the high threshold the network requires to stake.

Since launching, Lido has earned $158.8 million in fees from their staked Ether protocol. At the peak, Lido saw 823 daily active users on Sept. 17.

Cumulative Lido fees and daily active users. Source: TokenTerminal

With the Ethereum network Shanghai hard fork scheduled for March 2023, Lido will have a busy Q1 and all the Ether staked in the platform will have the option of being withdrawn. Aztec Connect, the creator of Lido protocol also recently secured a $100 million fundraising round to build an encrypted blockchain.

Polygon partnerships show long-term resiliency

Mass adoption requires traditional companies and brands to get involved in crypto. Polygon (MATIC) has a major focus on partnerships and some of the relationships developed in 2022 include Warner Music, JP Morgan, Instagram and Warren Buffett’s Neobank.

These partners use Polygon in various ways, including integrating the Polygon network into their infrastructure and using Polygon to offer distributed ledger technology (DLT) for their products and services.

Notable companies, including Cointelegraph, also chose to launch NFTs on Polygon. In addition to Cointelegraph, former President Donald Trump, Reddit, DJ Deadmau5 and Nike all launched NFT collections on Polygon.

Some traders expect a 200% upside swing from MATIC due to on-chain metrics showing traction and bevy of future partnerships. Despite all of Polygon’s growth, the Ethereum network still intakes more fees.

Daily fees comparing Polygon (Orange) and Ethereum (Green). Source: TokenTerminal

Polygon’s focus on Web3’s core principles combined with their partnerships, earned them a spot as a top altcoin project in 2022 .

MakerDAO’s DAI proves resilient

In a year that saw algorithmic stablecoins de-peg and perish, Dai (DAI) has shown resilience. Unlike centralized stablecoins, DAI is a decentralized stablecoin that provides transparency, censorship resistance, and the ability to operate outside traditional financial systems.

While DAI is not new to the crypto space, the decision to increase exposure in low-risk assets such as treasuries and bonds earns them a spot as a top altcoin. According to an analysis from Sebastien Derivaux, a crypto scholar, this decision generated 75% of all DAI revenues (600 million.)

Cosmos upgrades attract institutional investors’ attention

In 2022, Cosmos (ATOM) focused on solving the interoperability and communication challenges that exist between different blockchains. On Jan. 1, Cosmos had 74 active developers and this figure more than doubled, reaching a peak of 154 on Nov. 30.

In a year plagued with cross-chain casualties, Cosmos’ inter-blockchain communications protocol (IBC) has so far seemingly weathered the storm. The success caught the eye of Delphi Digital’s research arm and fund managers at VanEck.

Cosmos fees and developer activity. Source: TokenTerminal

Overall, Cosmos has the potential to be an important infrastructure layer for the crypto ecosystem, helping to facilitate the exchange of value and information between different blockchain networks and enabling a more interoperable future.

While 2022 is a year most crypto investors would like to forget, positive factors in mass adoption arose. The altcoins with a focus on building will continue to propel crypto’s future in 2023 and beyond.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

‘Surgical removal’ of crypto will only weaken USD dominance, commentators say

Russia Cracking Down on Crypto Miners Minting in Residential Areas

Russia Cracking Down on Crypto Miners Minting in Residential AreasRussian authorities are now prosecuting miners extracting cryptocurrency using subsidized electricity for the population, according to a top official from the energy ministry. Power utilities are detecting their increased consumption and trying to make them pay at commercial rates. Amateur Crypto Miners in Russia Under Pressure Despite Lack of Regulation for Home Mining Electricity distribution […]

‘Surgical removal’ of crypto will only weaken USD dominance, commentators say

Decentralized solutions for climate change are key as COP disappoints

Climate change initiatives led by politicians and sponsored by some of the biggest polluters demand a change in initiatives — Decentralized tech could play a key role.

Climate change has become one of the most pressing issues in the modern world with mounting pressure on companies to develop and implement climate strategies. Politicians around the globe have also been actively involved, with several nations pledging to go carbon-neutral in the next couple of decades.

Amid all the initiatives and conferences led by politicians and billion-dollar companies over the years, the threat of global warming and the carbon emissions spilling into the atmosphere have only risen.

The 2022 United Nations Climate Change Conference, or Conference of the Parties of the UNFCCC, was the 27th United Nations climate change conference. More commonly referred to as COP, the conference is one of the largest of its kind that sees attendance from top policymakers and tech CEOs.

COP27 ultimately resulted in minimal progress on loss and damage, with high-emission countries agreeing to compensate those countries enduring the brunt of the climate mayhem that they played a negligible role in causing. But, once again, no promise was made to stop the emissions fueling this disaster.

Politician-led conferences such as COP27 have become a glaring example of everything that is wrong with such initiatives. COP27 was host to more than 600 representatives of fossil fuel companies and many others who were there to prevent rather than support progress and action. Above all, the event was sponsored by the largest polluter of plastic in the world — Coca-Cola.

The annual climate carnival concept was probably not the best way to encourage meaningful action on global warming. The presence of the fossil fuel industry and continued failure to fulfill their intended purpose means the problem of climate change needs a modern solution, and for many, decentralized tech is the key that can benefit climate initiatives in the long run.

Decentralized solutions

Decentralized tech has proven revolutionary in data management for many industries apart from the financial sector. Climate change initiatives are already integrating blockchain tech to their benefit including an increasing number of projects at COP held yearly conferences. 

KPMG U.S. climate data and technology principal Arun Ghosh told Cointelegraph:

“One of the major outcomes of COP27 was landing on the loss and damage set of agreements enabling wealthier nations to help provision and plan for the recovery of people and livelihoods in under-resourced nations. Blockchain not only provides the trust and transparency set of enablers but with the introduction of CBDC pilots as well as the adoption of BTC as a recognized medium of exchange in countries like El Salvador, there are accelerated investments and plans emerging to integrate and transact between organizations, countries and citizens.”

Blockchain tech can be implemented in many ways to make climate change-related initiatives more efficient.

Recycling is one sector where blockchain can encourage participation by giving a financial reward for depositing recyclables like plastic containers, cans, or bottles. Similar setups already exist in several places around the world.

Recent: Gensler’s approach toward crypto appears skewed as criticisms mount

Plastiks is a nonfungible token (NFT) marketplace that sponsors initiatives to cut down on plastic waste. Plastiks partners with recycling firms and certifies their plastic recycling using NFTs that can become an additional source of income for the recycling firms. The project claims that recycling data, once recorded on the blockchain, also becomes a hard receipt of how much plastic has been removed.

Due to its ability to transparently track crucial environmental data and demonstrate whether obligations were reached, blockchain technology can also deter businesses and governments from breaking their environmental commitments or falsely claiming progress. 

For example, Regen Network offers blockchain-based fintech solutions for ecological claims and data. Some of their offerings include a public ecological accounting system and the Regen Registry, which allows land stewards to sell their ecosystem services directly to buyers around the world.

EarthFund DAO is another environmental initiative that organizes a decentralized community looking to tackle humanity’s environmental problems. The platform enables tokenholders to vote for and crowdfund “world-changing projects” such as the EarthFund Carbon capture project.

Crypto Climate Accord is a private sector-led initiative focused on decarbonizing the cryptocurrency and blockchain industry. To date, more than 250 companies and individuals in crypto, finance, NGOs and more have joined the movement.

Amid all the major use cases of blockchain tech, its progression in aiding the very complex carbon credit market has been most talked about — for both good and bad reasons.

Carbon markets and how they work

A carbon credit represents one metric ton of carbon dioxide, which can be bought, sold or retired. If a business is subject to cap-and-trade regulation (such as the California Cap and Trade Program), it probably has a set number of credits that it can apply to its cap. The company may trade, sell or store the extra carbon credits if it emits fewer tons of carbon dioxide than it is allowed.

An emission allowance from the seller is bought when a credit is sold. Despite the fact that emissions reduction is the result of an action, a credit becomes tradeable as a result of a genuine reduction in emissions.

Carbon markets aim to reduce greenhouse gas emissions, enabling the trading of emission units (carbon credits), which are certificates representing emission reductions. Trading enables entities that can reduce emissions at a lower cost to be paid to do so by higher-cost emitters. By putting a price on carbon emissions, carbon market mechanisms raise awareness of the environmental and social costs of carbon pollution, encouraging investors and consumers to choose lower-carbon paths.

There are two main categories of carbon markets: cap-and-trade and voluntary. Cap-and-trade sets a mandatory limit (cap) on greenhouse gas emissions and organizations that exceed these limits can purchase excess allowances to fill the gap or pay a fine. As its name suggests, the mandatory market is used by companies and governments that are legally mandated to offset their emissions. The voluntary carbon market, on the other hand, operates outside the compliance markets but in parallel, allowing private companies and individuals to purchase carbon credits on a voluntary basis.

Problems with carbon credits

Carbon credits have been touted as a market-based fix to help curb carbon emissions, but they come with a slew of problems. Carbon credit markets are ridden by poor offset quality, where certain credits might not be of the same quality as marketed and some are outdated and no longer meet the standards of top carbon offset certification organizations.

Some organizations offering such carbon offsets don’t do what they say they will. Voluntary carbon markets are largely unregulated and companies often get away with false advertising called greenwashing. These businesses either invest in non-verified credits or double-count the same credit. All of these actions trick buyers into believing they are reducing their emissions when they are actually not.

For example, according to Yale Environmental 360, a total of one billion tons of CO2 worth of credits have been made available for purchase so far on the voluntary carbon market. However, there are roughly 600–700 million tons more sellers than purchasers. Consequently, only roughly 300–400 million tons of CO2 offsets are actually achieved. This indicates that somewhere between 600 and 700 million tons of CO2 are produced without being offset.

How blockchain can help

There have been significant advances in computational technology within the blockchain realm that can enhance the efficiency of these carbon markets. Blockchain tech can aid in the process of credit creation and validation. R.A. Wilson, chief technology officer at digital carbon offset trading platform 1GCX, told Cointelegraph:

“Blockchain can vastly improve existing bottlenecks within the current carbon credits market, including issues surrounding fraud and misrepresentation and duplication of credits. While these improvements will be key to scaling the carbon credits market and building greater trust within the industry, blockchain is only one part of the solution. To scale the tokenized carbon credits market to its full potential, the industry will also require participation by trusted and established carbon credit providers, as well as collaboration with regulators and government agencies.”

KLIMA DAO is driving the development of the voluntary carbon market by building a decentralized infrastructure that makes the market more transparent and accessible. It sells bonds and distributes rewards to KLIMA tokenholders. Every bond sale adds to an ever-growing green treasury or improves liquidity for key environmental assets.

Nori is another blockchain-based carbon credit market built with farmers in focus. This project supports farmers adopting regenerative agriculture projects to remove CO2 from the atmosphere.

Tegan Keele, KPMG U.S. climate data and technology leader, told Cointelegraph that blockchain, along with other technologies, certainly has the ability to help carbon credit markets in terms of traceability:

“A credit can be traceable but not high quality — blockchain won’t inherently solve the quality problem, but it can help validate when a credited producer makes statements regarding origin or quality.”

Still, not everyone is convinced. Dan Stein, director of the Giving Green earth climate initiative, believes the problem is much bigger than double counting or traceability.

Recent: NFTs could help solve diamond certification fraud

Stein told Cointelegraph that blockchain-based climate solutions are hot air and that the real problem with carbon credits is offset quality:

“If anything, chain-based carbon credits exacerbate this problem by creating a credit as a commodity when it is instead a differentiated product. In fact, I’ve heard stories of companies ‘laundering’ old offsets that they couldn’t sell any other way onto these chain-based solutions.”

He added that by making transactions easier, “it turns credits into more of a commodity, and everyone treats them as the same. What has happened in practice is that project developers have taken old low-additionality credits that they can’t sell in a normal market and loaded them ‘on-chain,’ where suddenly they have found new buyers.”

The use of blockchain technology in the climate change fight has faced appreciation and criticism alike. On one hand, decentralized tech is being actively integrated for new solutions at a global level to make certain aspects more transparent and streamlined. On the other, climate activists believe that current blockchain solutions aren’t as helpful and only focus on tokenization.

Looking ahead, it will be interesting to see which projects catch on and scale to meet the challenges of climate change.

‘Surgical removal’ of crypto will only weaken USD dominance, commentators say