Crypto Carbon: Ethereum Reduced its Emissions by 99%. Let’s Talk About That 1%
Cryptocurrency has taken the market by storm. It is a revolutionary way to pay for things without the need to consult a third party in the midst of a purchase. Replacing popular contactless payments like Venmo or Apple Pay, cryptocurrency has gained the interest of investors and consumers alike.
As interesting and innovative as the concept of cryptocurrency is — it isn’t all that green or good for the future of the environment.
Cryptocurrency, while it isn’t great in the fight against climate change, has presented a unique set of benefits. For instance, one of the biggest plusses to implementing the use of cryptocurrency is improving upon the corrupt use of traditional currencies. Basically, cryptocurrency allows the power of the currency to remain in the user’s hands, whereas the twenty-dollar bill in my wallet today may not be worth the same amount tomorrow.
But does that sustainable value make up for the deleterious effect that cryptocurrencies have on the environment?
Crypto carbon: The numbers behind crypto mining
Cryptocurrency requires mining, and extensive use of energy, and definitely doesn’t meet the requirements to reach net-zero emissions by 2050. For example, Bitcoin, one of the most popular cryptocurrencies, uses almost 91 terawatt-hours of electricity annually, even though, the latest news say it uses 10.9% renewable energy. That’s more electricity than Finland needs to power their country of 5.5 million people for an entire year.
Ethereum, the second-largest company that deals with cryptocurrency behind Bitcoin, recently finalized “the merge” in an effort to reduce its use of energy. Long story short, we are still waiting to see the beneficial results of the project which is meant to cut out the middleman — or the miners of cryptocurrency.
Mining is the most energy-intensive and highest carbon-emitting component to the process of harvesting cryptocurrency. By eliminating the need for mining, Ethereum is trying to position itself as a sustainable crypto giant. But it still has a lot of work to do before being seen as one.
The amount of energy used by cryptocurrency companies is alarming. Ethereum alone is responsible for 0.34% of the world’s total energy. While this may not seem huge, it’s taxing on the globe’s limited supply of energy. It is commendable that a cryptocurrency company like Ethereum is attempting to make use of blockchain technology to decrease its emissions. But the entire sector of cryptocurrency needs to widen its sustainability efforts.
In 2020 alone, Ethereum was responsible for producing 16.6 million tons of carbon dioxide emissions. In order for Ethereum to offset the emissions it created, over 84 million trees would have needed to be planted.
Is there a solution to all this?
So, what can be done for cryptocurrency companies to reduce their massive carbon footprint? Unfortunately, cryptocurrency companies must realize that reducing their emissions alone will no longer be sufficient. An industry that is utilized by so many, multifarious organizations — should be cognizant to recognize that no reduction tactics will allow mankind to reach net-zero emissions.
All companies, businesses, and individual endeavors are going to create a carbon footprint of some kind. That part is inevitable — but what businesses and individuals alike do to offset their own emissions, is not.
It’s never a waste of time for one to attempt to reduce their own emissions. Therefore, cryptocurrency companies like Ethereum shouldn’t stop seeking new methods to decrease their electricity. However, they should strive to think outside the box. Cryptocurrency companies like Ethereum need to find ways to contribute to carbon offsetting projects to help reduce emissions externally.
Crypto carbon: A wait to invest sustainably?
Many people invest in cryptocurrencies simply because they want to make money. As so many users of cryptocurrencies are seeking financial gain, why don’t more cryptocurrency companies seek to align themselves with the ideals of impact or socially responsible investing?
Impact investments are investments that are made in order to create beneficial social and environmental impacts in addition to a lucrative financial return. Impact investments can be made in both developed and established markets. Socially responsible investing, on the other hand, refers to a type of investing where the stakeholder is also interested in creating beneficial social or environmental change — but goes one step further. The potential investment must adhere to several environmental credentials, such as an ESG score or a company obtaining an ISO 14001.
Cryptocurrency may not be able to completely alter the model of their currency to adhere to these investments. But they can most definitely promote the primary mission — to contribute to a social cause in conjunction with their investments. For example, cryptocurrency companies could create donation programs to invest in cryptocurrency. This is in conjunction with common carbon offsetting projects that help to mitigate excessive emissions. These can include reforestation, sustainable travel, and helping developing countries establish carbon neutrality.
Read the full article: https://beincrypto.com/crypto-carbon-ethereum-emissions/
