Is post-Merge Ethereum PoS a threat to Bitcoin’s dominance?

September 25, 2022 Coin Telegraph

Cory Klippsten, the CEO of Swan Bitcoin, shares his views on how "the competition for liquidity" between Bitcoin and Ethereum will play out after the latter's switch to a proof-of-stake system.

While Ethereum (ETH) fans are enthusiastic about the successful Merge, Swan Bitcoin CEO Cory Klippsten believes the upgrade will lead Ethereum into a “slow slide to irrelevance and eventual death.”

According to Klippsten, the Ethereum community picked the wrong moment for detaching the protocol from its reliance on energy. As many parts of the world are experiencing severe energy shortages, he believed the environmental narrative is taking the back seat.

In an exclusive interview with Cointelegraph, Klippsten said “I think the world is just waking up to reality and Ethereum just went way off into Fantasyland at the exact wrong time.”

“It is just really bad timing to roll out that narrative. It just looks stupid.”

According to some predictions, institutional capital will increasingly turn away from Bitcoin (BTC) and flow into Ethereum unless Bitcoin doesn’t move away from the energy-consuming proof-of-work system.

Klippsten dismisses this narrative as false, citing that, ultimately, all valuable technologies need to rely on real-world energy to function correctly.

"If you don't have some tethering to the real world using laws of physics, you're basically off creating some kind of like metaverse fantasyland".

Watch the full interview on our YouTube channel and don’t forget to subscribe!

Texas a Bitcoin ‘hot spot’ even as heat waves affect crypto miners

July 26, 2022 Coin Telegraph

Analysis

Extreme heat won’t stop miners from setting up operations in Texas, but more sustainable practices may be required.

Record-breaking heat waves are being documented across the world as extreme weather is worsening due to climate change. States throughout America are continuing to see temperatures rise above 100 degrees Fahrenheit (38 degrees Celsius), while the United Kingdom recently saw temperatures reach 104 degrees Fahrenheit (40 degrees Celsius).

While hot climates may be unusual for many of these regions, Texas — a state notorious for its boiling summers — is experiencing hotter-than-usual temperatures. The Electric Reliability Council of Texas (ERCOT) recently stated that Texas’ power load demand has been breaking records consistently this month.

Unsurprisingly, Texas’ continuous heat wave is having a major impact on crypto miners located throughout the Lone Star State. As Cointelegraph recently reported, a number of miners in Texas had to cease operations entirely earlier this month in order to accommodate Texas’ energy grid load.

Lee Bratcher, president of the Texas Blockchain Council, told Cointelegraph that there are about 10 industrial-scale crypto miners and 20 smaller-scale miners currently located in the region.

Earlier this month, ERCOT asked businesses and residents to voluntarily conserve electricity during the Texas heat wave. A Riot Blockchain spokesperson told Cointelegraph that its Whinstone facility in Rockdale is now participating in ERCOT’s Four Coincident Peak program, noting that the facility will curtail all power to help stabilize the grid during peak hours of demand. “As part of Riot’s participation in the program, in June the company curtailed energy consumption for a total of 8,648 megawatt hours,” the spokesperson said.

Peter Wall, CEO of Argo Blockchain — a crypto mining company that recently opened a data center in West Texas — also told Cointelegraph that the company curtails mining operations when ERCOT sends out a conservation alert. On July 19, 2022, he said that Agro had to undergo this, along with many other mining operators in the area.

As a result, Bitcoin (BTC) miners saw the biggest drop in computing power on July 21, 2022, since China banned crypto mining in May 2021. This came as a surprise to industry experts who would have expected the Bitcoin hash rate difficulty to increase based on current trends. Frank Holmes, CEO of Hive Blockchain Technology — a publicly traded crypto mining company with operations in Canada and Europe — told Cointelegraph that Bitcoin’s hash rate difficulty was supposed to rise 3% each month based on financial models, but that this hasn’t been the case due to a number of reasons. He said:

“As the price of Bitcoin fell, many S9 mining machines went off, or electricity surged and miners had to stop operations. But more importantly, many machines that were going to be plugged in are now unable to be utilized, which has also made the difficulty go down.”

Holmes noted that the drop in Bitcoin computing power has been beneficial for Hive since their facilities have not been impacted by climate change or other factors. He added that new mining machines are being delivered to Hive each month and that slots are being filled to accommodate growth. Yet, Holmes shared that Hive continues to scout out locations to establish its next mining facility in Texas, which will serve as the company’s first U.S. establishment.

Despite Texas’ extreme weather conditions on miners, Holmes explained that Hive’s method of using 100% green energy to mine both Bitcoin and Ether (ETH) will not disrupt the state’s power grid. Holmes elaborated that Hive’s future Texas facility will operate as a solar wind farm, which will not be subject to ERCOT’s regulations. “There are various locations in Texas that have the infrastructure we require for this. There are also credits to ensure that we build a solar farm.”

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While Holmes is confident that Hive will soon operate in Texas, he explained that the company has big ambitions for the facility, noting that it would require 300 megawatts of power. Given this, Holmes explained that Hive is being cautious about setting up in Texas too quickly, noting that a large-scale mining operation is risky when it comes to delivering on time. “We don’t want to scare communities or disappoint our shareholders,” he remarked.

Issac Holyoak, chief communications officer of CleanSpark — a sustainable Bitcoin mining and technology company — also told Cointelegraph that the firm is planning to open a mining facility in West Texas. While the bulk of CleanSpark’s miners is located in Georgia, Holyoak explained that the company has a co-location agreement in West Texas with the energy company, Lancium. He said:

“Lancium performs controlled load response, so they build large data centers that can power up or down based on the power supply curve. If there is a lot of energy required due to a hot afternoon, they can power down to compensate for this. Alternatively, if there is a low demand for energy, they can power up and mine Bitcoin.”

According to Holyoak, CleanSpark and Lancium’s Texas-based mining facility will launch in December of this year. Like Hive, Holyoak noted that CleanSpark has been benefiting from miners in Texas shutting down since there is less network competition. But, he believes it’s beneficial for the company to have operations in Texas due to the abundance of renewable energy in the region, along with the welcoming nature of counties looking to bring in additional commerce from mining operations.

“It’s a very unique market and it does have renewable resources that are extremely important to sustainable miners,” he said. With locations in Georgia and a few in upstate New York, Holyoak added that it’s important for CleanSpark and other miners to diversify their locations, noting that climate change and other extreme weather events can happen anywhere.

Will sustainable mining help Texas miners?

Even though Texas-based miners are being impacted by severe heat, Holmes believes that many of them are handling the situation well by powering off when needed. However, as more sustainable miners enter the state, already established operators may want to reconsider their mining techniques.

For example, Holmes explained that Hive educates authorities in the regions where they are based to help them understand their long-term environmental, social and governance targets. He said:

“In Quebec, we have a 40,000 square foot building with 30 megawatts of electricity, and we send the heat generated from our ASIC mining machines to heat 200 square feet of the building. The energy is recycled and is meant to accommodate the unique building structures in New Brunswick.”

This being the case, Holmes noted that having a long-term sustainable vision when it comes to mining can be very beneficial. He added that Hive’s Sweden location has software that ensures the company’s mining operations are down between the hours of 7–9 a.m. and 5–7 p.m., five days a week. “These are sensitive, peak demand times. We have a strategic relationship with the region to ensure our operations stop when needed,” said Holmes. He further shared that Hive mines about 9.8 BTC and 100 ETH per day.

Taking a different approach, CleanSpark uses immersion cooling to mine Bitcoin. Matthew Schultz, executive chairman of CleanSpark, told Cointelegraph that the company is among the first large-scale data centers of its type in North America to purchase immersion cooling infrastructure for their Norcross mining facility. He explained:

“Immersion cooling is a technique that we use for Bitcoin mining. The mining machines are prepared via the removal of their fans and submerged in tanks of biodegradable mineral oil. This increases mining efficiency by an estimated 20%. The oil is recycled through the facility and re-used while running through a heat exchanger that keeps the temperature around 125 degrees F.”

Holyoak added that most fan-based mining operations are kept cold by using ambient air, so hotter climates will impact the performance of machines, but immersion cooling can help mitigate this factor.

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He noted that immersion cooling will not be impacted by excessive heat. However, heat waves can spike energy prices which in turn may make it uneconomical to run machines. According to Holyoak, this is likely the case with Riot, as the company announced last year the use of immersion cooling at their Whinstone facility.

All things considered, industry experts believe that utilizing clean energy sources will help miners prevail against climate change. Elliot David, carbon management specialist at Sustainable Bitcoin Protocol — a company that verifies sustainable Bitcoin mining practices — told Cointelegraph that based on recent events, every mining company will have to think about climate resilience, whether they are based in a hot climate like Texas or cold climates like Norway:

“Utilizing clean energy sources is also an important solution because while they are intermittent, energy systems are all really exercises in balance. The grid has to meet demand with supply, and flexible loads such as Bitcoin make those balancing acts much easier.”

Go green or die? Bitcoin miners aim for carbon neutrality by mining near data centers

May 10, 2022 Coin Telegraph

Bitcoin mining

Bitcoin mining companies must prove carbon neutrality as new regulations come to play, but are carbon offsets enough?

Bitcoin (BTC) mining has always been a controversial topic. But, Bitcoin’s proof-of-work (PoW) model has reached new levels of concern as senior decision-makers and investors pay closer attention to environmental, social and governance factors.

As such, many crypto miners are highlighting environmentally friendly practices by acquiring carbon offsets. Yet, some would argue that this isn’t enough to guarantee green Bitcoin mining. Other risk factors may also be involved with carbon credits.

For instance, Kevin O’Leary — the Canadian entrepreneur better known as “Mr. Wonderful” for his role on Shark Tank — told Cointelegraph that he typically indexes public mining companies like Marathon Digital Holdings, Riot Blockchain Inc. and others. However, O’Leary pointed out that once these companies claimed carbon neutrality through carbon offsets, their stocks dropped drastically. O’Leary believes this is because the United States Securities and Exchange Commission (SEC), may soon plan to audit carbon credits. O’Leary expressed his concern, stating:

“Carbon offsets are unauditable. So indexers like me dumped those shares — we had to sell. The only way institutions will now invest in Bitcoin mining is for those companies to claim there is no carbon involved at all.”

Bitcoin mining and data centers

In order to ensure zero carbon mining, O’Leary explained that Bitcoin miners should build in parallel with data centers. This would then allow mining companies to efficiently use excess energy omitted from data centers to mine Bitcoin, resulting in “zero carbon displacement,” a process that produces zero carbon emissions.

Bitcoin mining company Bitzero began implementing such a model two years ago in Norway. Akbar Shamji, CEO and founder of Bitzero, told Cointelegraph that the company initially built an infrastructure partnership with Norway’s local government two years ago that prompted the region to release unused hydroelectric power generation for Bitcoin mining:

“This was the perfect opportunity for us to test this idea. At the same time, big data companies started to use renewable energy sources in places like Norway, but this wasn’t profitable for the region. We’ve built a long-term, low-cost 100% zero carbon displacement power source to have an edge over the market. We hit revenue when we mined our first Bitcoin in December 2021.”

Being aware of the massive demand for data storage today, Shamji further explained that electricity generated from data centers should be properly harnessed. “We call this the ‘Norway model.’ Electricity generation is there but it remains stuck at high voltage. So, we executed the electrical step down from high voltage to low acquiring transformers and substation, allowing us to drive containers full of ASIC miners efficiently,” he remarked.

In other words, Bitzero draws power directly from surplus capacity at local hydro plants, resulting in zero carbon displacement. At the same time, Shamji explained that Bitzero is delivering fixed data centers made of sustainable and local materials that consist of heat capture technology.

“In the case of Bitcoin mining, when electricity passes through these computers, the PoW algorithm doesn’t take much energy to generate. If this wasn’t implemented, the heat generated from these computers would go back into the air and be lost entirely,” he said. Although a zero carbon displacement model is yet to be widely adopted, Shamji said that Bitzero typically mines 129 Bitcoin per month, using 40 megawatts of power. He added that this will eventually grow to 110 megawatts.

The crypto mining company Argo Blockchain also plans to open a data center in West Texas to conduct mining operations. While Argo isn’t taking a zero carbon displacement approach, Peter Wall, CEO of Argo, told Cointelegraph that the company aims to become carbon neutral:

“There’s an enormous amount of renewable power in West Texas, and Argo’s mission is to mine Bitcoin in the most eco-friendly way possible. We chose Dickens County in particular because there is a substation that is adjacent to the property we chose to build Helios, which is our new flagship mining facility.”

Like Shamji, Wall is aware that clean power running through the substation located in Dickens County, Texas, is stranded and is not being utilized. “There is not a lot of local demand or local load to use that power, so we felt that this was a strong opportunity to help stabilize the grid,” he remarked.

Interestingly enough, energy and gas companies are also setting up shop in areas where energy is emitted. For example, Alex Tapscott, author and co-founder of the Toronto-based Blockchain Research Institute, told Cointelegraph that energy producer ExxonMobil has been quietly mining Bitcoin in North Dakota’s Bakken region for a year as part of a plan to curb emissions from flared gas.

*North Dakota gas flare. Source: Joshua Doubek*

“The pilot project has been enough of a success that the company plans to roll it out on a much wider basis. ConocoPhillips is reportedly working on a similar project,” said Tapscott. In addition, the energy company Grid Share recently announced plans to open a Bitcoin mining data center next to a hydroelectric dam on New Zealand’s south island to support 100% renewable energy in the region.

According to Tapscott, these initiatives may be surprising to many individuals who believe that Bitcoin mining is carbon-intensive. He explained that models such as these can be helpful for reducing carbon footprints:

“A typical Bakken well produces oil but also natural gas which is burned off or flared into the atmosphere. This is a significant source of carbon entering the atmosphere. Instead of flaring the gas, Exxon has partnered with Denver-based Crusoe Energy to capture gas and divert it to generators where it mines Bitcoin.”

Tapscott added that Crusoe found Bitcoin mining to reduce the world’s carbon footprint by as much as 63%. “Gas that had no way to get to market and would have been burned straight into the atmosphere instead gets a useful purpose as the fuel for minting new Bitcoin.”

Zero carbon emissions

While green Bitcoin mining has always been a “buzzword,” some would argue that these initiatives, along with zero carbon displacement, have become critical for mining operators that wish to stay in business.

For instance, lawmakers are seeking to pass legislation to ban non-green crypto mining operations entirely. This was recently exhibited by the State of New York, as lawmakers aim to restrict Bitcoin mining operations with a proposed bill currently making its way through the state capitol in Albany.

Meanwhile, the government of Kazakhstan recently proposed requirements for cryptocurrency mining operators to report the electricity consumption and “technical specifications” for connection to the power grid before operating.

Although initiatives like the Crypto Climate Accord aim to achieve net-zero emissions from electricity consumption from the companies involved by 2025, this also raises concerns in terms of how this may be achieved. Tapscott pointed out:

“This is a laudable goal, so long as it does not force Bitcoin to be something it’s not. To wit, some have suggested changing Bitcoin’s underlying code so that it uses the less energy-intensive proof-of-stake consensus mechanism. This would be a mistake. Proof-of-work is a feature that gives the network resiliency and strength.”

From an investors perspective, O’Leary added that he will only invest in Bitcoin mining firms and data centers that can prove to be a sustainable source of energy moving forward:

“Private capital must be compliant with environmental, social and governance factors. ESG was once a marketing term, but now it's a real thing. I can’t be subject to an SEC audit, and can't find an auditor who will sign these statements anyway. The crypto industry is at an interesting inflection point.”

To O’Leary’s point, Bitcoin miners are, indeed, facing an inflection point, yet regulatory clarity remains questionable. Bill Tapscott, CEO of CarbonX — a fintech carbon trading company — told Cointelegraph that the SEC’s proposed disclosures are similar to those that many companies already provide based on broadly accepted disclosure frameworks, such as the Task Force on Climate-Related Financial Disclosures and the Greenhouse Gas Protocol. He elaborated:

“Disclosure creates a baseline from which a government or regulator’s next move is to introduce a carbon tax or an emissions cap and trade system, such as the ARB’s California Quebec Market or RGGI. Carbon credits are part of these programs and have been ‘audited’ for years.”

Given this, Tapscott explained that mining operators will need to report their emissions, which will likely be high if energy originates from fossil fuels even flare gases, or low if these are from green sources like hydroelectric. “Yet, these companies can de-risk future carbon costs by investing long in carbon credits,” he said.

Fossils vs. Renewables, PoW vs. PoS: Key policy issues around crypto mining in the U.S.

January 30, 2022 Coin Telegraph

Bitcoin mining

A recent meetup on the Capitol Hill highlighted several key debates that will define the mining industry’s development in the years to come.

On Jan. 27, a group of eight U.S. lawmakers, led by Senator Elizabeth Warren, sent letters to the world’s six largest Bitcoin mining companies, demanding to reveal the detailed data on their electricity consumption. This isn’t the first time Senator Warren requested this information from a mining operation — last month a similar letter was sent to Greenidge Generation, which uses a natural gas plant to power its facility.

These moves highlight the increasing regulatory pressure on crypto mining businesses in the United States. But, as last week’s Congress hearing showed, the growing scrutiny might turn out to be an opportunity to align the mining sector’s development with the broader political push for clean energy. Here are some of the key themes around crypto mining that have captured the lawmakers’ attention and that will likely inform the intensifying policy conversation.

Total energy consumption

A cornerstone of any environmental critique of Bitcoin and crypto in general, the question of how much energy cryptocurrency mining consumes was expectedly prominent at the hearing. In a 2018 paper published in the prestigious journal Nature, a group of researchers predicted that Bitcoin’s growth could singlehandedly push global emissions above 2 degrees Celsius within less than three decades — not a good look given the international community’s stated mission to prevent the planet’s temperature rise of the exactly same magnitude.

Cambridge University Bitcoin Electricity Consumption Index set the tone of comparing the yearly Bitcoin-driven consumption to various nation’s levels — and as for now, with its 131.1 TWh per year the most popular cryptocurrency consumes more energy than Ukraine (124.5 TWh) or Norway (124.3), according to this source. The current estimate of Ethereum’s annualized energy footprint by Digiconimist stands at around 73.19 TWh.

None of the most widely cited estimates is beyond dispute, as the recent fact-check report by Bitcoin Policy Institute (BPI) suggests. It cited three separate articles from the peer-reviewed Nature Climate Change journal, one of them debunking the 2 degrees argument as “fundamentally flawed” and criticizing its methodology.

Crypto proponents prefer to compare Bitcoin energy consumption not to nations, but to other industries — in that case, according to the BPI report, BTC’s 0.27% of global energy consumption is less than that of gold mining, although the Cambridge Index sets the two equal.

Fossils vs renewables

In the context of the ever-growing political pressure on energy consumption, the search for a sustainable energy framework becomes crucial for any industry that wants to flourish in the digital age.

The critics of the crypto mining industry have recently highlighted several instances of mining operations relaunching the existing fossil power plants. The authors of the letter that some 70 NGOs sent to Congress ahead of the crypto mining hearing called the legislators’ attention to several such instances, like the relaunch of coal waste plants in Pennsylvania by Stronghold Digital Mining and the partnership between Marathon Digital and coal-fired plants in Montana.

There is also evidence that these are not the only American companies buying up the old ‘“dirty energy” plants to feed their mining operations — the pattern is observed from Texas to Missouri. At the Congress hearing, it was Steve Wright, a former general manager of Chelan County’s in Washington public utility district, who talked at length about the problem. He explained that miners’ interst in dormant fossil facilities is driven by a simple market mechanism: As renewable energy prices (on the West Coast specifically) grow in line with increasing demand, coal prices drop due to investors’ flight ahead of the upcoming 2025 ban on any coal usage in Washington state.

As Represenatives kept returning to this issue over the course of the hearing, it became clear that the tension between the use of fossil fuels for crypto mining and the industry’s potential shift to renewable energy sources is at the center of policymakers’ thinking on the issue. Witness John Belizaire, CEO of green data centers developer Soluna Computing, argued that there exist scenarios under which crypto mining can shift from a being “dirty” energy concern to a vehicle complementing and empowering the renewable energy sector.

Belizaire’s core argument is that computation-intensive tasks like Bitcoin (BTC) mining can be powered by the recaptured excessive (or, in the industry terms, “curtailed”) energy otherwise wasted by clean power plants. According to him, solar and wind farms waste up to 30% of generated energy due to incompatibilities with the old energy grids. Belizaire also addressed the problem of energy shortages allegedly driven by crypto miners, highlighting the fact that the kind of computations that miners execute can be stopped at any moment on-demand.

For now, the problem of “dirty mining” is here to stay simply due to the U.S. level of electricity production from renewable sources being below 7.5%. A recent study by DEKIS Research group at the University of Avila ranks the United States as the 25th country in the world in terms of its sustainable mining potential, with Denmark (65% of energy generated from renewables) and Germany (26%) leading the chart.

Nevertheless, America remains a safe zone for mining, while many other nations' electrical grids are less suited to handle additional load. With a reasonable regulatory framework in place, this could be a massive competitive advantage, laying the groundwork for the U.S. to become a global mining haven. Speaking to Cointelegraph, Belizaire explained that there are certain policy steps that can nudge crypto miners to “go green.” He listed a number of specific measures: “Extended tax credits and special investment tax credits for miners that use green energy and serve as flexible load, along with DOE loan guarantee that is extended to encourage the development of green crypto mining.”

PoW vs. PoS

Any discussion of a possible alliance between crypto mining and green energy tends to bump into a Proof of Work (PoW) versus Proof of Stake (PoS) debate, and the recent hearing was not an exception. It was Cornell professor Ari Juels who repeatedly stated that “Bitcoin does not equal blockchain,” in the sense that the energy-intensive PoW consensus mechanism is not the only way to enjoy the decentralization advantages of crypto.

And, of course, the number one alternative on the table is PoS consensus mechanism that will possibly be adopted by the Ethereum ecosystem and is currently used in a large number of new blockchain projects. It is also central to the development of smart contract-based technologies such as decentralized finance (DeFi) and non-fungible tokens (NFTs).

Juels’ statements reflect the general pressure that is building up on PoW. Earlier this month, Erik Thedéen, vice chair of the European Securities and Markets Authority (ESMA), proposed an outright ban on PoW mining in the EU and called for transitioning to PoS due to its lower energy profile.

In the U.S., dominating the global Bitcoin mining market with the 35% share, the issue is way more pressing than in Thedeen's native Sweden, where only about 1.16% of BTC is mined. However, the real problem lies in the Asia-Pacific region, where, according to the The Global Cryptoasset Benchmarking Study, almost 50% of electricity to Proof-of-Work miners comes from coal.

None of the three experts who spoke with Cointelegraph on the matter see the the juxtaposition of the two consensus protocols as productive. John Warren, CEO of crypto mining firm GEM Mining, noted that there are “slim to none” chances of Bitcoin transitioning to PoS. With that fact in mind, and given Bitcoin's status as the biggest cryptocurrency, ‘the industry should focus its attention on increased adoption of carbon-neutral energy sources versus trying to alter the Bitcoin verification process.”

John Belizaire rejected the idea that the government should support any of the bulletins over another:

Congress does not have enough knowledge to make a call on the technical architecture of a global platform that powers billions of dollars in assets [...] The technology community should be the final arbiter of innovation [...] The POW camp will innovate to solve its problems itself.

Mason Jappa, co-founder and CEO of mining company Blockware Solutions, remarked that both Proofs have their comparative advantages, but, in echoing Belzaire’s testimony, underscored the compatibility potential PoW networks possess towards renewable energy. In that sense, Jappa sees PoW mining as a "net positive for society":

Mining is a perfect complement to the energy grid and is repurposing infrastructure that was otherwise not being utilized, along with providing a use case for building out our energy grid.

What’s next?

As Jappa noted, "It is bullish for the ecosystem that this hearing took place", as once again the lawmakers expressed their understanding that cryptocurrencies are here to stay.

Warren specifically appreciated the part of the discussion that “underscored the ability for the mining industry to innovate more eco-friendly solutions.” We still witnessed plenty of 101 explanations of blockchain technology that reminded of the long way lawmakers should go in terms of their understanding of crypto economy, but, as Warren poined out:

It's important to acknowledge that there were a number of positive remarks that stemmed from the discussion, showcasing to the nation that mining has created many new jobs and that Bitcoin introduced valuable blockchain technology to the world. That perspective has been largely missing from some of the recent public discourse around crypto mining.

Besides the obvious need for both the general public and legislators to get better educated on the issue, there are some clear focal points around which the digital mining industry could rally, Belizaire believes.

For example, laws or governmental programs that encourage the use of renewable energy over legacy fossil fuels to power the industry, like “Incentives for job-creating in rural parts of the country where mining operations are set up – at both the state and federal level.”

Thus, it appears that the green mining card is the one that can present a straightforward economic and environmental argument in favor of the crypto industry, while the PoW/PoS debate is something that should be reserved for the crypto community rather than regulators.

Green and gold: The crypto projects saving the planet

January 11, 2022 Coin Telegraph

Charity

While the world argued about the ethics of crypto, these projects changed the world for the better during 2021.

It seems as though the potential benefits of cryptocurrency are often overshadowed by the technology’s inherent vulnerability to exploitation.

And it’s true, crypto adoption does come with risks. Over the past year, governments from around the world have raised concerns that crypto could be used to finance terrorism or other illicit activity like money laundering. There have been prohibitive measures everywhere from China to Nigeria, with many crypto exchanges forced into a legislative chokehold.

While crypto has its challenges, it has also become a tool for policymakers and activists wanting to make the world a better place.

The climate crisis

During 2021, public scrutiny of Bitcoin (BTC) energy-intensive mining practices dominated headlines all year long — and for good reason. According to Digiconomist, Bitcoin mining consumes a similar amount of energy to an entire small country like the Netherlands or the Philippines.

However, many environmental activists are already using the very same technology as a tool in the fight against climate change. For example, smart token contracts have allowed charitable institutions to raise funds in a way never seen before.

Many of these “charity tokens” have a tax system that charges a fee with every transaction, which can then be wired to a charity of choice. For example, the World of Waves (WOW) token is on a mission to restore the planet’s oceans and combat climate change.

In 2020, world's oceans may have stored up to 1 sextillion more joules of heat energy than in 2019. Warmer water contributes to melting sea ice. Seas may have absorbed enough heat last year to boil 1.3 billion kettles of water. Buy $WOW & support climate conservation efforts. pic.twitter.com/4ehOOc2iq0
— World of Waves (Official) (@World_Of_Waves) November 13, 2021

The project has a transactional tax of 11% that is redistributed back to all holders, 3.3% to the liquidity pool and 4.4% to the WOW charity wallet. As the charity wallet grows, funds are extracted monthly for donations towards nature conservation activities and the preservation of wildlife. According to the project’s Twitter page, over $49,000 has already been donated. WOW chief operating officer Kristijan Tot told Cointelegraph:

“It's all about making a positive impact on causes around the world while shining the spotlight on NGOs and creators.”

In this way, charitable giving is hardwired into the token’s underlying algorithm. Not only that but holders are also incentivized to invest and stay invested in the project.

WOW isn't the only crypto project using this type of technology to raise funds for an environmental cause.

Solarcoin distributes tokens as a reward to people who install solar arrays in their homes or businesses. The theory is that when the price of the coin exceeds the energy production cost, solar will effectively become free. The project’s website states:

“As of today, cryptocurrencies are worth over US$2 trillion. Most of that value was distributed in exchange for carbon-intensive crypto mining. What if it was given out to people who produced energy for free?”

Black Lives Matter

Of course, environmental conservation isn’t the only issue crypto projects have attempted to tackle over the past year. In June, the world watched in outrage as George Floyd was murdered by a police officer. His death sparked renewed momentum for the Black Lives Matter movement — and no shortage of controversy in the crypto community.

As previously reported by Cointelegraph, a group attempted to cash in on the turmoil by releasing a George Floyd token, a project rife with shaky tokenomics and an unclear payment system. It was also reported that a person attended the protests holding a sign claiming “Bitcoin will save us.”

Despite the obvious bad taste of these isolated instances, the wider community mainly rallied for the cause. For example, the Giving Block introduced a solution for their users to specifically donate to nonprofits supporting the Black Lives Matter movement such as the Chicago Community Bond Fund, Movement for Black Lives and the Bail Project.

Back in 2020, the crypto fundraising platform partnered with Gitcoin to launch its #CryptoForBlackLives campaign. Initially, Gitcoin matched donations up to $25,000 through a community grant. However, that tally was boosted to over $100,000 by the campaign’s completion.

Black activists have also worked tirelessly to ensure their communities are able to benefit from the monetary gains that crypto has to offer. Founder and lead engineer of Guapcoin (GUAP) Taviona Evans says that her platform was able to accomplish more in 2021 than any year prior. GUAP was created to help close the wealth gap in Black communities and support Black-owned businesses in the United States. She told Cointelegraph:

“We've sparked awareness about crypto among a population with less access and education in crypto and finance — and we continue to do so.”

Improving healthcare

Another area of charitable giving where crypto projects have made a difference this year has been healthcare and mental health. In 2021, the health of many people around the world suffered immensely as the COVID-19 pandemic continued to spread.

Perhaps one of the more unexpected results of the coronavirus was its profound effect on crypto and blockchain, which can be traced to the pandemic’s genesis in late 2019.

From Australia to Mexico, blockchain technology is already being used to verify the authenticity of COVID-19 test results and vaccination certificates.

A number of crypto funds and tokens have also emerged to support communities around the world that have suffered from outbreaks of the virus. In April this year, Polygon co-founder Sandeep Nailwal created the COVID-Crypto Relief Fund as a crushing second wave of the virus tore through his home country of India.

The fund was able to raise a whopping $429.59 million by mid-October, with Ethereum founder Vitalik Buterin, Australia cricketer Brett Lee and Coinbase chief technology officer Balaji Srinivasan among its contributors.

#India @CryptoRelief_ @VitalikButerin @RyoshiResearch
The #India #Covid #Crypto Relief Fund donation has been spent! This is good news for everyone! For the ones that supported the donation, and also for the ones that opposed!
What do you think #ShibArmy?https://t.co/dbxNx84bVF pic.twitter.com/fe7w5swdge
— SHIB INFORMER (@ShibInformer) September 26, 2021

Is crypto a force for social good or bad?

If there has ever been a year to prove that crypto is truly morally agnostic, it was 2021. Around the world, the same technology used to finance terrorism was also used to fund healthcare amid the COVID-19 pandemic. While the world argued about the impact that energy-intensive BTC mining projects have on the environment, others created crypto projects and tokens to save our planet.

As we move into 2022, whether crypto is a force for good or bad remains in the eyes of the holder.

Tezos blockchain notes power savings after PoS switch: PwC report

December 7, 2021 Coin Telegraph

Coin Telegraph

The switch to proof-of-stake has had noticeable energy saving effects for the Tezos network.

Tezos, a privacy focused blockchain network, released its carbon footprint report from PricewaterhouseCoopers Advisory SAS — a French member firm of the PwC network of member firms.

The PwC report reflects drastic improvements in energy efficiency for Tezos since moving from a proof-of-work (PoW) mining consensus to a proof-of-stake (PoS) one.

The PwC report highlighted a significant decline in carbon emission by Tezos network despite a rise in network activity. Tezos blockchain accounted for 50 million transactions while, according to the report, the whole network constituted an energy footprint of 17 world citizens.

The energy efficiency for each transaction on the network increased by 70% while the estimated electricity requirement per transaction was 30% lower than in 2020.

"As more brands and companies factor energy consumption into business decisions, an energy efficient blockchain like Tezos is well poised to meet their needs and deliver efficient, secure, and reliable operations," said Reid Yager, global director of communications at Blokhaus, a marketing firm associated with Tezos.

The annual energy consumption of the Tezos network is estimated to be at 0.001 Terawatt hours (TWh), which is negligible when compared to the likes of Bitcoin (BTC) at 130 TWh and Ethereum (ETH) at 26 TWh. Tezos consumes nearly 2.5 g CO2 equivalent per transaction

The change to PoS has not only helped the Tezos network decrease its carbon footprint, but also opened new avenues in the nonfungible tokens (NFT) and decentralized finance. Tezos has been selected by Red Bull Racing, Honda and McLaren Racing as their NFT launch platform. It was also awarded as the blockchain of choice by Art Basel Miami Beach for its ecosystem exhibition.

There has been a significant increase in the number of blockchain networks making a switch from PoW to PoS owing to energy consumption issues and scalability complexities. Apart from Tezos, ZCash (ZEC), another privacy focused blockchain network. is making a switch to PoS. Most of the blockchain networks making the switch are looking to steer clear of the energy consumption FUD associated with the PoW mining consensus.

Crypto’s climate impact: Are carbon offsets good enough?

November 9, 2021 Coin Telegraph

Coin Telegraph

Carbon offsets could be an important step in the crypto industry’s move toward carbon neutrality, although some experts see them as a pure greenwash.

As global leaders discuss what needs to be done to address the concerns surrounding climate change at the COP26 summit in Glasgow, Scotland, businesses throughout the world are looking to achieve carbon neutrality. Environmental impact has been a hot topic in the crypto sector with renaming it as being a top priority.

Earlier this year, electric car maker Tesla started accepting Bitcoin (BTC) payments and invested $1.5 billion in the cryptocurrency, only to drop BTC payments a few months later over concerns surrounding the “rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal.”

Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021

Since then, efforts for the crypto space to become environmentally friendly grew, partly taking into account Tesla CEO Elon Musk’s statement that the electric car manufacturer would retake BTC payments when there’s a “confirmation of reasonable (~50%) clean energy usage by miners with positive future trend.”

As part of these efforts, cryptocurrency exchange BitMEX became one of the first trading platforms in the sector to announce a carbon-neutral status and vowing to offset emissions of all Bitcoin transactions to and from the platform.

BitMEX revealed it purchased 7,110 metric tons of CO2 credits, valued at around $100,000, in partnership with AI carbon data tracking firm Pachama. Carbon credits are certifications of approval granted by official legislative bodies that allow corporations to use one ton of carbon dioxide in an approach that fosters accountability and data traceability.

BitMEX’s move will ensure that the platform sustains its operations for the upcoming calendar year while offsetting all emissions associated with Bitcoin transactions to and from its servers. To the exchange, a “holistic effort” needs to both include research into the environmental impact, but also fundamental education on the “possibilities unlocked by crypto technology.”

Speaking to Cointelegraph, Alex Salnikov, co-founder and head of product at NFT marketplace Rarible, said that part of the reason that the cryptocurrency industry is so heavily scrutinized over its carbon footprint is “the transparent design” it has, and not necessarily on its environmental impact.

Salnikov added that the “additional pressure is a good thing, as the space is accelerating its push to become energy efficient with proof-of-stake blockchains.” To Salnikov, the ultimate goal is to ensure that most, if not all, Web 3.0 tools “have minimal or zero carbon footprint.”

Carbon offsets, Salnikov said, are “definitely important as a stepping stone.” Not everyone agrees, however, with some arguing that these offsets may do more harm than good.

Are carbon offsets greenwashed?

In early October, executive director of Greenpeace Jennifer Morgan spoke at the Reuters Impact conference on the growing carbon-offset trend and implied that companies are evading their responsibilities through carbon credits.

At the conference, Morgan argued that there is “no time for offsets,” as we are in “a climate emergency” and, as such, there is a need to phase out fossil fuels. She added that “offsetting schemes are pure ‘greenwash’” that allows companies to “do what they’ve been doing and make a profit.”

Speaking to Cointelegraph, Martha Reyes, head of research at cryptocurrency exchange Bequant, seemingly agreed with Morgan, saying that carbon credits are “not an ideal solution to reduce carbon emissions.” She added that both investors and regulators are “rightly waking up to greenwashing, which is an issue in traditional markets.”

As for what cryptocurrency companies can do to reduce their impact, Reyes argued a more sustainable approach for Bitcoin mining is to use more renewable energy. China’s crypto mining ban meant miners that were using carbon-based energy sources were forced to leave the country and migrate.

To Morgan, carbon offsets allow companies to keep polluting without cutting off their emissions, as they simply buy credits from projects that reduce or avoid the release of CO2 such as solar power farms.

In April, according to Reuters, a group researching the integrity of carbon offsets said that 29% of the forest carbon offsets it analyzed in a $2 billion program overestimated the amount of emissions being offset, totaling around 30 million metric tons of CO2.

The problems surrounding carbon offsets are evident, but whether there are other ways for cryptocurrency industry players to make a difference if they aren’t involved in mining is up for debate.

ESG crypto-assets

In the face of a climate emergency, Greenpeace has increasingly been moving against polluting entities. In May of 2021, the organization said its facility for accepting Bitcoin donations was “no longer tenable.” The organization started accepting BTC donations back in 2014 and cited a clearer view of the amount of energy needed to run Bitcoin as the reason for the move.

Speaking to Cointelegraph, Eric Berman, senior legal editor of U.S. Finance at Thomson Reuters Practical Law, said he does not see anything inherently “dirty” about Bitcoin or any other cryptocurrency. Berman added that like other commercial enterprises, BTC uses energy and, as such, sustainability “is in the eye of the miner.”

To Berman, large mining enterprises can be required to use clean energy sources and not because regulators force them to do so, but because the market collectively votes on that happening by preferring BTC mined with renewable energy. He told Cointelegraph:

“As I understand it, developers are currently designing ways to digitally tag a Bitcoin or other crypto units to reflect that it has been sustainably mined, which could create bifurcated markets within each cryptocurrency with the sustainably mined version holding the greater value.”

He said that tracking coins mined with renewable energy could make them accessible to investment vehicles focused on optimal Environmental, Social and Governance (ESG) factors.

Who decides which coins get an ESG tag, he added, is “likely to be quite political,” as even figuring out who would be the arbiter of the rating raises creates “a whole spectrum of questions and would threaten to institutionalize crypto in a way that is antithetical to the spirit of Bitcoin and crypto.”

Bequant’s Reyes also pointed out that cryptocurrency miners are signing energy deals with suppliers and “are taking advantage of the renewable energy market.” Green mining initiatives are growing, she said, considering both their source of energy and the disposal of outdated mining equipment.

Players in the cryptocurrency space have done more than buy carbon credits to reduce their environmental impact. Through the Crypto Climate Accord, an environmental initiative supported by over 150 organizations from the sector, crypto firms pledged to make their operations more sustainable.

However, most firms have not subscribed as CCA Signatories, an act requiring a public statement of commitment to having achieved net-zero carbon emissions from electrical operations by 2030. Nevertheless, experts argue neither Bitcoin nor the cryptocurrency space should be in the spotlight.

Crypto’s role in the climate crisis

While cryptocurrencies are often in the spotlight when it comes to climate change, Sarah Manski, an assistant professor at George Mason University’s School of Business, said that it’s important to understand that “every commodity and every currency has some carbon footprint.” Speaking to Cointelegraph, Manski said:

“It would be reasonable to say that the printing of U.S. banknotes in a year equals about 200,000,000 kilowatt hours of energy consumption, including thousands of tons of ink, cotton, linen and water. Our coins use hundreds of thousands of tons of metal.”

Manski added that while some carbon offsets are greenwashing, many are not, implying not all carbon offsets are equal and some are more transparent than others. Speaking to Cointelegraph, Pete Humiston, manager at Kraken Intelligence, said that developments in the industry have been alleviating concerns surrounding the industry’s “carbon intensiveness.”

Humiston added that China’s crypto ban moved mining hash power to North America, where the “energy mix is much more skewed towards renewables.” He specifically focused on the state of Texas, saying it was a preferred destination for many of the mining entities that fled China and that it derives “a significant chunk” of its energy from wind power.

Large-scale mining entities, he added, purposefully built their operations close to local renewable initiatives to “take advantage of cheap power surpluses which would otherwise be discharged as waste.”

For Humiston, the crypto asset space has made “significant inroads into becoming carbon neutral” and will keep doing so. He concluded:

“This is especially true given that the economics of mining incentivizes miners to use cheap renewable energy to mine Bitcoin and other crypto assets.”

Back in October 2020, the 3rd Global Cryptoasset Benchmarking Study by the University of Cambridge showed that 76% of cryptocurrency miners use electricity from renewable energy sources as part of their energy mix, with 39% consuming only renewable energy when mining proof-of-work cryptos like Bitcoin, Ether (ETH) and Bitcoin Cash (BCH).

The Bitcoin Mining Council (BMC) in July 2021 estimated that the Bitcoin mining industry was using 56% renewable energy in its power mix while using a “negligible amount of energy” when compared to the global energy consumption. BMC’s estimate was based on a three-question survey of just 32% of miners on the Bitcoin network, which revealed a 67% sustainable power mix and was used as a basis for the 56% estimate.

While estimating how far renewable energy is being used to mine Bitcoin or other cryptocurrencies, Humiston has argued that the industry is “going in the right direction.” Reyes claimed an overlooked but growing use of blockchain technology is “in conservation and reforestation efforts,” which benefit from the added transparency and accountability of a blockchain.

A trend is visible among key industry players with or without carbon offsets with a shift toward a more sustainable approach. The industry’s efforts to be more environmentally friendly are showing, as not every institution is running from BTC because of its carbon footprint.

The $9 trillion multinational investment giant BlackRock, which has been vocal about its focus on ESG initiatives, held almost $400 million worth of shares in two Bitcoin mining firms through its funds as of August 2021.

As the industry moves toward a greener future, cryptocurrency adoption may grow as some of those sitting in the sidelines may stop seeing the environmental impact as a concern surrounding their involvement in the industry. Whether other sectors will join crypto’s green ambitions, only time will tell.

New York businesses ask governor to deny permits for crypto mining

October 18, 2021 Coin Telegraph

Coin Telegraph

Crypto mining's environmental impact continues to raise concerns with regulators and businesses alike.

The New York State Governor Kathy Hochul has been asked by a group of local businesses to deny permits for converting the city’s old fossil-fuel power plants into crypto mining centers. The request comes in the form of a letter cosigned by a number of organizations, businesses and labor groups.

The letter calls for an environmental assessment for Proof-of-Work cryptocurrency mining in NYS while urging Governor Hochul to deny permits to convert the Greenidge Generating Station and the Fortistar North Tonawanda power plants into crypto mining facilities:

“Proof-of-Work cryptocurrency mining use enormous amounts of energy to power the computers needed to conduct business – should this activity expand in New York, it could drastically undermine New York’s climate goals established under the Climate Leadership and Community Protection Act.”

The proposal highlighted the inefficiencies of PoW authentication and suggests that repowering defunct fossil-fueled power plants would be “seriously jeopardizing the state’s progress on and meeting mandates for reducing greenhouse gas (GHG) emissions.”

The businesses also quoted NYS Commissioner Basil Seggos of the Department of Environmental Conservation saying that “Greenidge has not shown compliance with New York’s climate law.”

NYS is taking action on #ClimateChange. Today @NYSDEC released for public comment draft air permits for former coal plant turned bitcoin mine, Greenidge LLC. DEC has not made a final determination on the permits and Greenidge has not shown compliance with NY’s climate law./1 pic.twitter.com/PKozYCUIeQ
— Basil Seggos (@BasilSeggos) September 8, 2021

Citing the need for a full environmental assessment related to greenhouse gas emissions, the letter demands Hochul’s administration deny the Title V Air Permits for the two fossil-fuel facilities.

On the other side of the world, Russian authorities are planning to introduce special electricity tariffs for recently-displaced Chinese cryptocurrency miners.

On Oct. 13, Russian Energy Minister Nikolai Shulginov suggested a new energy consumption framework to differentiate tariffs between general usage and cryptocurrency mining, stating:

“We can’t let miners capitalize on the situation at the expense of low residential electricity tariffs.”

According to research conducted by the New York Digital Investment Group (NYDIG), Bitcoin’s (BTC) energy consumption will remain below 0.5% of the global total over the next decade. The study also suggests that the carbon footprint of Bitcoin will be dependent on fluctuations in Bitcoin’s price, mining difficulty and energy consumption.

The focus of the blockchain climate discussion is missing the point

October 2, 2021 Coin Telegraph

Coin Telegraph

Bitcoin’s energy consumption and its dependency on climate-damaging fossil fuels has raised debates from both inside and outside the blockchain community.

As the nonfungible tokens craze took off at the start of the year, many climate-conscious artists vocalized their disapproval of Ethereum’s energy consumption. In May, Elon Musk then derailed Bitcoin (BTC), citing the energy consumed by Bitcoin as cause for Tesla to withdraw its plans to accept BTC as payment for its electric cars.

Both of these events have provoked a surge of debate from inside and outside the blockchain community. In particular, the arguments tend to focus on two areas: Bitcoin’s energy consumption and its dependency on climate-damaging fossil fuels versus renewables and, secondly, the benefits of one blockchain platform over another — generally focusing on consensus models and promoting proof-of-stake as the greener option.

Each debate is overflowing with arguments for both sides. If the IPCC is right, then the need for drastic action to help reverse some of the damage cannot be overstated. To do that, the focus ought to be on the positive applications of blockchain.

Leveraging blockchain’s strengths

One significant way that blockchain’s impact is already substantial is in its ability to crowdsource large amounts of otherwise wasted energy — which is aggregated and reignited for further utility. Crowdsourcing wasted energy is in keeping with the principles of a circular economy, which eliminates the throwaway culture, for recirculating available resources as much as possible. And computing power is one example.

Whether it be on a personal laptop or a commercial server out of office hours, there’s a vast amount of wasted idle computing power lying around on hardware, particularly when not in use. At the same time, there’s a vast demand for computing power that’s being met by companies like Amazon Web Services, which is continually building new data centers to accommodate this need.

Blockchain networks, like Cudos’ decentralized cloud computing platform, redirect spare computing power from idle computers and put it to better use, reducing waste in the process. Other networks like Filecoin or Bluzelle focus on storage services, but the principle remains the same.

Decentralizing the energy grid

Other projects are using this concept to decentralize energy networks. Brooklyn Microgrid is a hyper-local initiative allowing “prosumers” (producers and consumers) of solar energy to sell their surplus by funneling it into a microgrid where other participants can buy it. It’s the kind of “act local, think global” project that proves anything is possible if you’re willing to start from scratch.

In Vienna, the government had previously funded an initiative allowing citizens to earn token-based rewards for identifying sources of heat waste that can be recycled back into the energy grid. A slightly different variation on the same decentralised theme, but uses the same principles of leveraging blockchain technology for the greater good.

Trustless green credentials

Blockchain technology also has a fundamental role in bringing transparency and accountability to governments and corporations for their role in fighting climate change. Transparency in ESG (environmental, social and governance) matters is currently high on the agenda for chief financial officers following the introduction of the EU Sustainable Finance Disclosure Regulation earlier this year. In its broadest terms, the regulation obliges banks and financial institutions to categorize their investment products according to their green credentials.

Using blockchain to store and verify this information would increase visibility and vastly increase the level of trust that investors can place in products brandishing ESG credentials. It’s quickly becoming easy to envisage a future where consumers and enterprises can make choices based on the algorithmic ESG ranking of any type of organization on the blockchain.

Being the “least bad” blockchain platform will no longer suffice, and the community is far from helpless when it comes to the climate emergency. It has a powerful technology at its disposal, along with some of the best, brightest and most innovative thought leaders in the world.

Clearly, blockchain technology can be applied to a myriad of positive use cases that give more to the green cause than they take away. And in doing so, blockchain technology makes a stronger argument for its applications in environmentalism than against them.

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

Matt Hawkins is founder and CEO of Cudo Ventures, a provider of global cloud computing and monetization software, and Cudos, a decentralized cloud computing network bridging the gap between the cloud and blockchain by recycling the world’s idle computing power. He previously founded C4L in 2000, which was acquired in 2016 and was one of the U.K.’s fastest data center ISPs, supporting around 1% of the U.K.’s internet infrastructure, and was winner of many fast-growth awards, including: The Sunday Times Tech Track 100, Deloitte’s U.K. Technology Fast 50 and Technology Fast 500 EMEA, and many more.

How will blockchain technology help fight climate change? Experts answer

September 5, 2021 Coin Telegraph

Bitcoin mining

Here’s what experts on emerging tech think about the role of blockchain in achieving more sustainability and lessening the climate crisis.

Tom Baumann of the Climate Chain Coalition:

Tom is the founder and co-chair of the Climate Chain Coalition, an open global initiative to advance collaboration on blockchain/DLT and digital solutions to enhance climate actions.

“In general, digital solutions can be helpful tools to support a low-carbon economy. The World Economic Forum estimates that digital solutions can help achieve 15% of the Paris Agreement goals. These solutions can be used throughout the entire economy, creating smart grids and buildings, smart transportation, integrating with digital services and more.

Digital tools could link sustainable production to sustainable consumption in a more efficient, equitable manner, for a fair transition. Beyond the described carbon trading market, distributed ledger technologies, including blockchain, can enhance international and intersectoral collaboration.

DLTs can be combined with other technologies, like the Internet of Things, to support digital MRV-based climate action tracking and accounting. They can also facilitate innovative natural resource management. This can lessen market failures by recognizing and preserving the real value of natural resources, all while considering the rights and interests of present and future generations.

In terms of multi-stakeholder empowerment, blockchain has game-changing potential. It enables digital identities and asset management to be linked to people, organizations and businesses in a way that ensures rules are enforced, and it can make governance a community effort. By employing governance tokens and decentralized autonomous organizations, more stakeholders can be brought into decision-making roles.”

These quotes have been edited and condensed.

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

Marco Schletz of Data-Driven EnviroLab and Søren Salomo of TU Berlin:

Marco is a research associate at Data-Driven EnviroLab, an interdisciplinary and international group of researchers, scientists, programmers and visual designers with a goal of strengthening environmental policy at all levels. He is also an innovation fellow at the Open Earth Foundation, a nonprofit organization that fosters sustainable development and solidarity through art and education.

Søren is a professor of technology and innovation management at the Technical University of Berlin.

“Launched in 2009, Bitcoin was the first application of blockchain or distributed ledger technologies more broadly. Despite both Bitcoin and blockchain maturing tremendously, Bitcoin is still frequently perceived and used as a blanket term synonymous with blockchain. Accordingly, problems explicitly related to Bitcoin, such as its energy consumption, create a halo effect that overshadows the potential positive effects of blockchain technology as a powerful means to accelerate climate action.

Blockchain technology creates a distributed network design that enhances transparency and reduces information asymmetries among heterogeneous climate actors. This design is based on bottom-up data contributions from all actors to allow for the triangulation of independent data sources. These new designs are desperately needed to overcome current legacy system thinking and path dependence in order to incentivize collaboration for major change and enable digital democracy for the Paris Agreement.

The reason we need alternative data governance structures to ensure the validity and accuracy of critical emissions data could be seen very recently when Greta Thunberg called out the U.K. for lying about cutting its emissions. Examples of how blockchain can support and accelerate climate action include Yale Openlab’s Open Climate, the World Bank Climate Warehouse, the Blockchain for Climate Foundation, the Climate Ledger Initiative and the Climate Chain Coalition, among others.”

Linda Kristoffersen of KPMG:

Linda is a manager, advisory, at KPMG — a Big Four auditing firm. She also supports blockchain.

“Companies are making bold commitments to deliver on promises for a net zero carbon future and will need to embrace the use of emerging technologies, including blockchain, to be successful in achieving their goals. Stakeholders, investors and the public are looking for accountability and will increase pressure on companies to disclose real measurements while ensuring trust and auditability in reported carbon emissions data — and to provide the associated proof.

In this transition from reporting emissions estimates to real measurements, blockchain is an excellent auditable system of record that can track emissions data provenance, provide data security, prevent the double-counting of emissions and introduce transparency in data processing steps to prove environmental performance and prevent fraudulent claims. Blockchain can provide the same benefits to carbon offsets and credits where a lack of transparency and the double-counting of credits is of great concern.

In addition, by leveraging smart contracts, you can automate and incentivize participation in sustainable practices that require tight coordination between individuals, governments and companies.”

Francisco Benedito of ClimateTrade:

Francisco is the CEO of ClimateTrade, a fintech company helping organizations achieve sustainability by offsetting CO2 emissions.

“Blockchain as a technology is helping to fight the climate crisis on two main levels.

On one hand, we can see how carbon markets have been opaque and prone to fraud. Even though carbon credits have been the first expression of a digital certificate, they have been implemented in different isolated registries and have involved multiple parties that do not trust each other. Sound familiar?

It seems logical in the current context to utilize a single distributed ledger to record the generation of carbon credits and their movement in the market as true digital assets.

This is the first level in which blockchain can help us improve existing processes — by making them more efficient, transparent, secure, faster, cheaper, etc. But the true disruption comes when blockchain enables new models that were not possible before blockchain technology, not just improving existing mechanisms but designing completely new ones.

Blockchain is a very powerful technology, but the biggest advantage that it poses in this context is the ability to shape human behavior. The rise and general adoption of blockchain applications enable us to design financial incentive schemes that will foster the achievement of the decarbonization goals, allowing Earth to continue being a comfortable place to live — and that is precisely what we are doing.”

Emin Gün Sirer of Ava Labs:

Emin is a computer science professor at Cornell University, the founder and CEO of the Avalanche blockchain protocol, and the co-director of the Initiative for Cryptocurrencies and Smart Contracts (IC3).

“We must ensure that new technologies minimize or eliminate actions that negatively impact our planet — this outlook does not limit itself just to blockchain. Without concerted, intentional efforts to mitigate climate change, our planet cannot sustainably exist.

With the initial introduction of proof-of-work-based blockchain systems, many creators like Satoshi didn’t focus on climate impact. Instead, they simply wanted their technologies to work.

We’re now in a place where we can reference past innovations to ensure we’re developing sustainable technologies and protocols. Proof-of-stake is a prime example of people collaborating to improve blockchain’s capabilities in a way that helps fight the climate crisis. This is just the tip of the iceberg for what's possible with blockchain-powered technology for climate change.

Many teams are looking to push the boundaries. Minimizing hardware requirements for blockchain nodes, integrating with eco-friendly hardware and collaborating with leading climate change researchers are a few ways blockchain companies can accelerate progress toward a sustainable economy.”

Catherine Sear of World Bank:

Catherine is the external affairs officer of the World Bank Group Trade Practice, with a specialization in climate change and sustainable development.

“There is significant scope to apply innovations, including technologies like blockchain, as international carbon markets under the Paris Agreement take shape. In particular, these technologies can increase transparency and improve the overall functioning of future carbon markets in two ways.

Technologies like artificial intelligence, drones and smart sensors could help digitize project-level monitoring, verification and reporting systems. Blockchain encryption can be used alongside these technologies to ensure the immutability and integrity of data collected under a digital MRV system. A major benefit would be a significant reduction in the time and effort needed to generate carbon credits, which would reduce barriers to participation in carbon markets. The World Bank is developing protocols for digital MRV systems in collaboration with partners.

At the global level, blockchain technology could track carbon credit transactions, tokenize carbon credits and link transactions to smart contracts. It could also securely store the information required to track a carbon credit. This is being tested under the World Bank’s Climate Warehouse, a meta-registry that demonstrates how national registries can be connected and uses blockchain technology to track transactions between parties. Eventually, we anticipate this will link with the digital MRV system and create a connected digital ecosystem for credible, transparent and liquid carbon markets.”

Candice Teo of the Blockchain & Climate Institute:

Candice is the director of communications at the Blockchain & Climate Institute, a not-for-profit think tank comprising an international network of experts working at the intersection of blockchain technology, climate change and sustainability.

“We are currently in a situation where the time for climate action is now. As Mark Carney highlighted to the United Kingdom Treasury Select Committee, ‘We have left it exceptionally late’ to act effectively on climate change. It is thus integral for us to make ‘good bets’ for the future that scale and not worsen things.

Currently, there is a great deal of mistrust among various stakeholders, including donors and recipients of climate finance. Measurement, reporting and verification (MRV) issues have been major impediments to countries fulfilling their climate finance pledges. With blockchain’s consensus mechanism and crucial immutability feature, especially when paired with other emerging technologies such as AI and IoT, it can significantly enhance MRV, driving trust in climate funding that goes to carbon assets management/trading, biodiversity conservation (REDD ), community renewable energy projects, etc.

According to the International Energy Agency, there is a strong need to reduce peak energy demand. Therein lies a challenge in achieving this while renewables catch up. Local energy trading schemes have proved the value of using blockchain. Paired with AI, peak energy demand could be predicted and managed.

The use of blockchain is also crucial to progress in facilitating circular economies, biodiversity, smart cities, blue economy and oceans, and emissions management and trading.”

Adelyn Zhou of Chainlink Labs:

Adelyn is the chief marketing officer of Chainlink Labs, a decentralized oracle network.

"While many people are voluntarily altering their consumption habits to combat climate change, a global shift in consumption will likely require significant incentive changes to drive sustainable behavior. Self-executing contracts enabled by a combination of blockchains and oracle networks that pull data from the real world can automate incentive systems to directly reward practices that help our environment.

For instance, the Green World Campaign and Cornell University are building smart contracts that use satellite data to automatically reward people who successfully regenerate tracts of land by increasing tree cover, improving soil and implementing other restorative agricultural practices. When Chainlink oracles pull proof of land improvement (via satellite imagery) onto the blockchain, it triggers the smart contract to release a payout. With this system, land stewards can quickly and efficiently receive their rewards. At the same time, only those making a real impact can earn rewards, as payment only happens when a real-world condition is met and verified on-chain. This entire process is automated, scalable and fraud-proof, and can be replicated across hundreds of use cases across sectors.”

Introduction

For some time, the global climate crisis was a hot topic to debate. But the discourse has changed and a consensus has been reached, moving the conversation toward how to stop — or at least to lessen — the ongoing issue of climate change. Two pivotal moments in reaching this point were the adoption of the United Nations’ Sustainable Development Goals (SDGs), whose mission is to be a “blueprint to achieve a better and more sustainable future for all,” and the Paris Agreement, an international accord adopted by nearly every nation six years ago in 2015.

The discussion around how to fight against the global climate crisis has turned to emerging technologies and their role in the process. Back in 2017, the United Nations Framework Convention on Climate Change (UNFCCC) highlighted the importance of blockchain technology in helping to combat climate change globally. The secretariat of the UNFCCC detailed some specific use cases:

“In particular, transparency, cost-effectiveness and efficiency advantages, which in turn may lead to greater stakeholder integration and enhanced creation of global public goods are currently viewed as the main potential benefits.”

Decentralized technologies indeed have the potential to help achieve the SDGs by recasting conventional approaches to sustainable development via the benefits of blockchain technology, such as transparency and immutability. As 2020 showed us, many countries around the globe are already turning to emerging technologies in their fight against the climate crisis and in their efforts to lessen carbon-intensive practices. Some examples include Russia, India, Qatar, the United Arab Emirates, countries in Africa and the Asia-Pacific region, and certainly the G7 nations — which include Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.

Meanwhile, earlier in 2021, concerns about Bitcoin’s (BTC) carbon footprint became a highly discussed topic both within and outside of the crypto community, forcing some major global media outlets to speak up about Bitcoin’s energy consumption and carbon emissions. However, the topic wasn’t a new one, as experts had already been discussing the pros and cons of Bitcoin mining for a while. Bitcoin’s supporters argued that its energy consumption is irrelevant “when compared with global energy production and waste” and that compared with BTC mining, “Processing gold and steel is wasting money, energy and resources.”

It’s best to set aside the problem of who is right and who is wrong in this debate and instead focus on the impact of it. There is a saying that every cloud has a silver lining, and the most important one that came out of this debate is that the crypto industry has accepted that it must prioritize focusing on green technology, offsetting Bitcoin carbon emissions and leveraging renewable energy.

To find out the impact these technologies can have in the fight against the climate crisis, Cointelegraph reached out to a number of experts in emerging technologies whose goals are directly related to sustainable development and technological innovation. The experts gave their opinions on the following question: How can emerging technologies help achieve the U.N.’s Sustainable Development Goals and lessen the impacts of climate change?

Green technology