Another Earth Day is here, and blockchain technology has reached its 12th birthday. What started with Bitcoin has now blossomed into a $2.2 trillion ecosystem.
You must be wondering why Earth Day is being pulled into this discussion. That’s because we interact with blockchains daily. And we must account for our blockchain usage and consider whether we are any greener than yesterday. And to do that, there couldn’t be a much better day than Earth Day.
So, have blockchains become greener? Let’s take a look!
Until the beginning of last year, Proof-of-Work (PoW) blockchains had the center stage in the cryptocurrency market. Few outspoken critics have constantly criticized them for polluting the planet and consuming power equivalent to entire countries’ electricity consumption! And they have valid reasons to do so.
Source: https://digiconomist.net/bitcoin-energy-consumption/, 04/15/2021
In a latest study of Bitcoin’s energy consumption and a blow to PoW blockchain technology usage, it was found that the world’s first cryptocurrency system has a carbon footprint of 47.33 Mt CO2 which is roughly equivalent to the carbon footprint of Norway.
Moreover, Bitcoin’s annualized electrical energy consumption was found to be 99.63 Twh (comparable to Kazakhstan), and electronic waste production 11.19 kt (comparable to e-waste generation in Luxembourg).
Finally, single Bitcoin transactions left a carbon footprint of 435.94 kgCO2, consumed 917.78 kWh of electrical energy, and generated 103.02 grams of e-waste.
On the other hand, the DeFi space brought forward the concept of staking. With the increasing number of dApps (built on staking) being launched almost every single day, it became a crying need to transition to the Proof-of-Stake consensus mechanism. Because, as it turns out, PoW is not scalable enough to handle the growth.
Although PoS blockchains like Cardano, NEO, Binance Smart Chain have been around for the last few years, it was only last year that the movement for blockchains to be more scalable and green started gaining momentum. Ethereum 2.0 or ETH 2.0 was the flagbearer of this movement.
ETH 2.0 and the Move to Proof of Stake
Sustainability and environment friendliness is the crucial facet of Ethereum’s transition to PoS because the second-ranked blockchain since its inception has always been an energy-intensive platform.
According to Michel Rauchs, a CCAF research affiliate at the University of Cambridge’s Centre for Alternative Finance (CCAF), and NFT sale on Ethereum translates to as much as 8.7 megawatt-hours of electricity, more than twice what an average British household consumes in one year.
Moreover, “…it is estimated that as of last year Ethereum consumed between 20 and 25 terawatt-hours annually.”
This is slowly expected to phase out in the past, with Ethereum incorporating the Proof-of-Stake mechanism. Last year in December, the team launched the ETH 2.0 Medalla Testnet, which saw validators depositing more than $500 million worth of ETH, thereby activating the Beacon Chain and kickstarting Phase 0 Ethereum’s transition to PoS.
According to the official Eth2 vision homepage, the new system will dock the currently running PoW Ethereum blockchain when both Beacon chain upgrades and shard chain upgrades are operational.
“Although staking will be introduced by the Beacon Chain, the Ethereum we use today will run in parallel for a period of time, before it ‘merges’ or ‘docks’ with the ETH 2.0 upgrades. One system secured by ETH, the other by computing power. This is because, at first, shard chains won’t be able to handle things like our accounts or dApps. So we can’t just forget about mining and mainnet.
Once the beacon chain and the shard chain upgrades are up and running, work will begin on docking mainnet with the new system. This will turn mainnet into a shard so that it’s secured by ETH and far less energy-intensive.”
And Not Just Ethereum, Other Platforms Are Also Contributing to the Cause Of Green Blockchain Technology Usage
In January last year, environment-friendly blockchain Algorand announced the launch of PlanetWatch. It is an air-quality monitoring service that has leveraged the Algorand blockchain and Internet-of-Things (IoT) to roll out the world’s first immutable air quality ledger technologies.
PlanetWatch gathers data from air quality sensors and stores them in blocks in the Algorand blockchain. The planet also rewards contributions to the ecosystem by distributing the PLANET token, a utility token, to sensor owners.
PlanetWatch sensors in Milan, source: PlanetWatch website
AIKON Is Doing Our Part
Environment conservation and sustainability are central to AIKON’s existence. We want to help foster a culture of environment-friendly blockchain uses in businesses. That’s why we partnered with Algorand, which, as mentioned above, advocates sustainable blockchain development.
Our blockchain-based identity management solution, ORE ID, uses an entirely carbon-neutral cloud solution to store and manage the data of people looking to explore decentralized applications.
We also partnered with Ecologi to reduce the carbon footprint from blockchain usage by individuals utilizing our products. So far, our team has helped plant 1,030 trees and offset 60.69 tonnes of carbon dioxide!
How else has blockchain usage become greener? Share your thoughts in the comments below!
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About AIKON
AIKON, a San Francisco-based VC-backed firm, was founded in 2017 to enable the digital asset economy and empower users from all over the globe by securing their personal information via blockchain.
AIKON has developed the Open Rights Exchange (ORE) protocols to manage access to digital rights and access and has been enabling mainstream blockchain technology adoption with its ORE ID secure identity service and ORE Vault — shared wallet for teams. With its solutions, AIKON aims to foster a new era of secure identities that protects users and their data, powered by the blockchain. Follow us on Twitter or connect with us on Telegram!