The introduction of blockchain technology had taken the world by storm with the functionality that it has explained to cater towards. Within a few years, the users were claiming blockchain technology to be the next Internet. Cut to 2022, when the crypto space saw a massive shift in the energy consumption with only one of the biggest crypto networks changing its consensus mechanism from being a Proof of Work to a Proof of Stake one; yes we are talking about the Ethereum merge and the network’s transition in its consensus mechanism.
With global warming and the experts predicting the world ending for us in 2012, Earth and how to manage ourselves have come a long way. Starting from reusable coffee mugs by Starbucks to Zomato introducing eco-friendly containers, every big institution is dedicated to working to bring about a sustainability aspect to their energy usage and services. All in all, the time that we are living in, has never been more critical a time the world’s history when environmental sustainability for major businesses has been paid this much attention to. As we are moving forward, the planet is continuing to show signs of dramatic change. These changes and reports that environmentalists are publishing have been garnering more and more public attention and as a result, the public is calling for greater accountability from all industries.
While looking for solutions, the blockchain community has often been portrayed as something that has to do with the problem. However, this is largely a misrepresentation. What the technology has to offer and the way it can help can actually assist institutions in the global transition necessary for a sustainable future. The possibilities that sustainable blockchains can offer are massive, and the upsides for the environment in making use of these are too important to ignore.
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Sustainable Blockchains
Blockchain’s participation in environmental issues has been stigmatized due to the consensus that Bitcoin and some other tokens uses, which is the Proof of Work consensus. While Proof of Work do consume a lot of energy, the Proof of Stake are vastly more energy efficient. One of the most amazing examples would be the Ethereum network’s recently upgraded to PoS, which saw Ethereum’s energy usage drop by 99.9%.
Not only that, there has been work going on to rectify the historical carbon consumption by the Ethereum network with the help of the recently formed Ethereum Climate Platform, also referred to as the ECP, which is a collective of industry stars, that includes Ethereum Enterprise Alliance, ConsenSys, Microsoft, Aave, and Polygon, which launched at COP27’s U.N. Climate Change Global Innovation Hub.
Blockchain networks has even greater potential. They can be put to good use by improving tracking mechanisms and verifiably proving the emissions of a given organization or supply chain; along with he new green credentials. The information can then be reported or managed by various monitoring services, who can then relay it to the public in their annual reports. With blockchain in place, the verifiable, cryptographically enforced nature of the data will ensure that it cannot be falsified or clouded in any way.
Besides that, environmentally friendly blockchains can become a sustainability solution by the tokenization and digital distribution of digital environmental assets. The propelled development of the carbon credit market has attracted engagement in the function from leading organizations across the globe. They include the largest registries which provide accreditation like Verra and Gold Standard, all the way to international bodies like the World Economic Forum.
Source: CoinDesk
