Blockchain Sustainability: Will Blockchain Help Address Climate Concerns?

Blockchain Sustainability: Will Blockchain Help Address Climate Concerns?

Climate change is progressing faster. Governments and organizations are actively looking for sustainable alternatives, resources and green energy to mitigate climate change. 

The planet’s average surface temperature has increased by 2 degrees Fahrenheit and 1 degree Celsius. The ice sheets in Antarctica and Greenland are shrinking. Glaciers are retreating and the sea levels are rising. The CO2 level is at its peak. Further, scientists have revealed that the current warming rate has broken all records of the past 10,000 years.  

In such an adverse climate condition, we welcome a futuristic technology – blockchain. Blockchain has the power to support sustainable development.  

However, to address the environmental issues, blockchain itself has to become green. Green blockchain projects like Cardano, Stellar, Hedera and others have become quite popular due to their eco-friendly nature. 

In this article, we will be discussing the 2 sides of blockchain sustainability. The article will also focus on top green blockchain projects and the best blockchain projects that stand for ecology and environmental protection. 

 

Understanding The 2 Sides Of Blockchain Sustainability 

Blockchain has become a revolutionary technology. With its decentralization features and unique attributes, it is helping businesses transform their workflow and scale growth and value. From finance to supply chain, logistics, real estate and healthcare, blockchain is helping these sectors introduce decentralization, transparency and security.  

However environmental experts have always raised a question about blockchain sustainability.  

Blockchain sustainability has 2 sides. They are: 

• The first is exploring how blockchain can play a role in sustainable practices. Intensive studies are going on in this sector to find out blockchain’s potential in renewable energy management, ESG policies and addressing issues of climate change. 
• The second is to reduce the environmental impact of blockchain and cryptocurrency mining through green crypto and eco-friendly blockchain networks. 

For the blockchain to effectively address climate change and environmental issues, it has to become eco-friendly itself. Only when we have efficient green blockchain technologies in hand, we can further use them for sustainable management. 

Blockchain requires a massive amount of electricity to process activities on its network. According to a survey, the Bitcoin blockchain uses 204.5 Twh of electricity annually. This is equivalent to the annual electricity consumption of Thailand. 

Further, researchers have also pointed out that energy usage in cryptocurrency mining is enormous. For instance, Bitcoin mining consumes 150 terawatts of electricity every year, which is equal to the energy consumption of Argentina. 

Data from the Bitcoin energy consumption Index shows that the carbon footprint of Bitcoin is 37 megatons. The carbon footprint graph of Bitcoin is equal to that of New Zealand.  

Another research data indicates that the carbon footprint of 1 Ethereum transaction is equal to the 226,910 VISA transactions. 1 Ethereum transaction emits 102.38 kilograms of carbon dioxide. 

The December 2021 Cambridge Electricity Consumption Index shows that Bitcoin has a share of 0.52% of the total global electricity consumption. 

The carbon footprint and energy consumption of blockchain have always been an issue for environmentalists. The blockchain community believes that while we cannot stop web3 development, we can always make it greener. 

Green blockchain projects like Hedera and Cardano use the hashgraph consensus mechanism and Proof of Stake mechanism to reduce the environmental impact. These green blockchains are energy efficient and use a fraction of energy as compared to Bitcoin and Ethereum to process transactions and stake tokens on their network.  

Blockchain can be a transformational technology that helps mitigate climate change concerns. With the right strategy and development, blockchain can help understand climate issues, innovate systems that will efficiently adapt to changing environments and commit to a more sustainable future. 

Eco-friendly blockchain projects are already in progress that is coming out with innovative ways to monitor industrial carbon emission, track electricity distribution and set in place sustainable policies to make the earth a better place to live. 

For example, Moss Earth is a climate tech company that works for the conservation of the Amazon Rainforest. Its product MCO2 is a tokenized carbon credit that is available on major crypto exchanges. World’s leading corporates use MCO2 to offset their customer and corporate carbon footprints. 

 

Top 3 Green Blockchain Projects 

Hedera 

Hedera utilizes a groundbreaking hashgraph consensus to enable fast and economical transactions with significantly lower energy consumption compared to typical blockchain systems. 

At the core of hashgraph are two key innovations, “gossip about gossip” and “virtual voting”, which allow Hedera to provide a secure, stable, fair, and swift platform, consuming an average of only 0.00017 KWH per transaction, in contrast to Bitcoin’s staggering 885 KWH and Ethereum’s 102 KWH. 

To put it in perspective, that’s a fraction of the energy consumption of other blockchain systems. 

Despite its energy efficiency, Hedera does not compromise on speed. In fact, it processes an average of 10,000 transactions per second, compared to Bitcoin’s 3, at an average fee of only $0.0001 per transaction, compared to Bitcoin’s $22.57. 

Hedera is not just revolutionizing blockchain to make it more sustainable and scalable. It is also democratizing and making it more accessible to the masses. Developers can create and manage fungible and non-fungible tokens, maintain verifiable event logs for any app or permission framework, and deploy smart contracts in popular programming languages to create centralized apps and protocols. 

Cardano 

Cardano’s foundation is an ouroboros, a peer-reviewed protocol that combines behavioural psychology, economic philosophy, and mathematically-verified mechanisms. According to Cardano, the ouroboros is the “first provably secure proof-of-stake” protocol and is up to 4 million times more energy-efficient than Bitcoin. 

Cardano sees itself as the preferred blockchain for change-makers, innovators, and visionaries, providing the tools and technologies to facilitate the positive global transformation that will last. According to their website, it is the infrastructure of the future. 

Stellar 

Stellar also boasts faster, cheaper, and more energy-efficient transactions than typical blockchain, offering another sustainable and scalable solution. 

Stellar, however, emphasizes a primary point of distinction: while other blockchain solutions were developed to undermine or replace existing financial systems, Stellar is a decentralized system that exists to enhance global financial systems by enabling transparent currency trading. The Stellar network is not intended to trade lumens (its native digital currency), but to trade all currencies. 

Launched in 2014, Stellar has already processed over 2 billion transactions, serving large enterprises and single-developer companies building global payment apps, asset exchanges, and micropayment services. 

This technology makes money borderless, particularly useful for international remittances and payments. End-users experience it like cash, not tokens. 

 

Top 3 Blockchain Sustainability Projects For The Environment 

WePower 

WePower is a blockchain platform that facilitates funding and trading of renewable energy. Its objective is to help renewable energy producers obtain investment by releasing their own tokenized assets.  

The platform brings together energy manufacturers and buyers, allowing them to purchase energy at competitive rates. WePower has developed an Ethereum Smart Energy smart contract for WPR tokens to standardize and simplify the global energy investment ecosystem. 

The primary aim of WePower is to create infrastructure for integrating renewable energy production and traditional energy system operators, thereby advancing the world towards 100% renewable energy. 

WePower operates as an auction where energy suppliers auction off their energy, and buyers bid for desired volumes and prices. Once a buyer successfully acquires a lot, they receive a digital power purchase agreement (PPA), which fixes the price and quantity of energy at the time of acquisition.  

WePower simplifies the PPA contract signing process and enables the purchase of small shares of energy, thereby opening up new markets for customers. 

In February 2020, People Energy and QEnergy companies signed a 10-year PPA contract using the WePower platform. QEnergy acquired 100% equivalent energy production from a 9.4 MW solar photovoltaic plant located in Robinwale, Australia, under an agreement valued at $10 million. 

Plastic Bank 

Plastic Bank is a Canadian social enterprise that aims to tackle ocean plastic and global poverty through recycling. The company pays people to collect plastic, preventing it from entering the ocean.  

Its Plastic Positive program enables anyone to invest in Social Plastic Collection Credits (SPCC), which fund wages for plastic collectors and the infrastructure to reintroduce materials into the supply chain. This approach makes recycling profitable for disadvantaged communities, reducing pollution and poverty. 

Blockchain technology enables Plastic Bank to create a transparent supply chain, enabling users to track project impact in real time. The distribution of SPCC occurs through the blockchain platform, ensuring transparency and compliance with investor obligations. IBM is partnering with Plastic Bank to implement its global expansion plans, leveraging IBM Blockchain technology delivered in a private cloud from Cognition Foundry. 

Plastic Bank is partnering with SC Johnson, a leading household chemicals manufacturer, to establish plastic recycling centres throughout Indonesia. The program benefits local waste collectors who depend on waste collection as income.  

Residents can bring collected plastic to these centres and receive digital tokens in return, which they can use to purchase goods and services. Each centre can receive up to 100 tons of plastic per year. Plastic Bank also operates in Haiti, the Philippines, and Brazil. 

Sun Exchange 

In contrast to other companies mentioned in the article, Sun Exchange does not develop its own blockchain solution but instead leverages cryptocurrencies to promote solar energy adoption.  

The company installs solar panels for organizations and businesses seeking to switch to solar energy, then launches a crowd sale of solar panels that anyone worldwide can purchase.  

Once sold, the panels are leased to the organization and pay for the electricity consumed. Owners of solar panels receive rent fees on their digital wallets, and payments can be made in local currency or Bitcoin. 

Sun Exchange has completed over 20 successful projects in South Africa and has more than 9,000 buyers and tenants registered in 145 countries. Over 580,000 solar panels are currently powering 20 organizations, including schools, supermarkets, and a wildlife centre. 

 

Conclusion 

Blockchain technology can be a powerful tool in addressing various environmental issues and contributing to the preservation of our planet. Through the use of distributed ledgers, blockchain solutions can help in providing transparency and accountability in environmental programs, allowing individuals and organizations to track the impact of their contributions. 

By leveraging the unique features of distributed ledgers, we can develop innovative solutions that can help us transition to a more sustainable future. 

Empower your sustainable projects with custom blockchain solutions from Chaincode Consulting. Contact us today to discuss your project requirements.