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By Gerelyn Terzo, Benzinga
Cryptocurrencies are renowned for disrupting the financial system, starting with payments. And while there’s no denying the impact the blockchain space has had across sectors of the economy, it has also commanded a great deal of reflection and action regarding its environmental impact from activities like mining.
Bitcoin mining, where equations are solved to secure the blockchain and more bitcoins are created, requires a massive amount of computing power. The University of Cambridge likens Bitcoin’s annual energy consumption of 147.7 TWh per year to that of entire nations such as Ukraine, Malaysia or Poland.
Elon Musk thrust the sustainability issue into the spotlight in 2021, when he declared Tesla (NASDAQ: TSLA) would stop supporting Bitcoin until it became more environmentally friendly.
One project that has been leading on sustainability since its inception is EcoAI Coin. The EcoAI Coin’s mission is to leverage the power of blockchain and artificial intelligence (AI) to encourage a positive impact on the environment.
Fortunately, the wider blockchain space is also starting to value sustainability. Bitcoin and Ethereum are part of key trends that are helping to shape the future of a more sustainable blockchain space.
Ethereum’s Proof-Of-Stake Example
Ethereum, which is behind the industry’s second-biggest cryptocurrency, ether, is one of the most high-profile projects to focus on the environment. But it didn’t happen overnight. When it was founded in 2013, Ethereum started with the energy-intensive PoW system, similar to Bitcoin, as it was the only viable option at the time.
However, from the onset, Ethereum co-founder, Vitalik Buterin, had his sights set on a more sustainable model. By 2022, the Ethereum project overhauled its consensus algorithm from PoW to the more environmentally friendly proof-of-stake (PoS) model. Bitcoin’s PoW consensus algorithm has an annual electricity consumption of 112.06 TWh compared with Ethereum’s PoS electricity consumption of 0.01 TWh, according to Bitwave.
Instead of relying on computing power, PoS harnesses participants’ token holdings to secure the blockchain through an activity called staking. Ethereum stakeholders earn rewards (more ether) in exchange for helping to secure the blockchain network. If there’s any malicious activity suspected, stakers run the risk of losing their ether holdings. Not to be outdone, other popular blockchains that have similarly pursued the PoS model include Cardano, Polkadot and Solana, among many others.
Renewable Energy Push
The Bitcoin network runs around the clock, making it an ideal candidate for renewable energy sources like wind power and solar. The Bitcoin ESG Forecast, which looks at Bitcoin through the lens of an ESG asset, demonstrates this trend. In 2023, the use of renewable energy sources in Bitcoin mining soared to a fresh all-time high of nearly 55%, a 3.6% year-over-year increase.
One example is Bitfarms (NASDAQ: BITF), a Toronto, Canada-based Bitcoin mining company. Bitfarms is setting an example by relying on Paraguay’s cheap and sustainable hydroelectric power to create a more efficient Bitcoin mining operation.
Other projects are catching the green energy wave too, including Dogecoin. The Dogecoin project is often compared to Bitcoin and similarly relies on the PoW consensus algorithm to secure its blockchain. Dogecoin urges its miners to use renewable energy to the extent possible, saying, “It’s the responsible thing to do for the environment.”
Carbon Offsetting Innovation
A United Nations study suggests it would require the planting of 3.9 billion trees to offset the CO2 emissions from cryptocurrency mining operations in the 2021-2022 period. Carbon offsetting is a way in which individuals and organizations can potentially contribute to reversing greenhouse emissions by supporting positive environmental behaviors. It also represents yet another way in which some cryptocurrency projects are proving their commitment to the environment.
Blockchain projects are taking unique approaches to participating in the carbon offsetting market. Among them, the Terrapass Coin gives token holders, including individuals and businesses, the opportunity to offset carbon emissions produced through activities such as cryptocurrency mining, including projects that rely on renewable energy for their electricity. Every individual Bitcoin mined can be offset with two Terrapass carbon credit offsets.
Another example is Terawulf, which mines Bitcoins using hydro and nuclear power and takes a zero-carbon approach to its activities. Rather than offset any carbon emissions, Terawulf leaves a zero-carbon footprint from the onset.
EcoAI Coin Leads The Way On Sustainability
One cryptocurrency project whose technological roots are embedded in both innovation and sustainability is EcoAI Coin. The EcoAI Coin uses both the power of the Ethereum blockchain and cutting-edge AI technology for good. Users earn rewards in the form of EcoAI Coins for their contributions toward saving the planet.
As evidence of its commitment to sustainability, EcoAI Coin has adopted what’s called the
proof-of-environmental work mechanism. It’s a model that rewards participants for their mining activities and sustainable behavior, including recycling and aligning mining and transaction validation processes with environmental goals.
Miners are rewarded with EcoAI Coins commensurate with their “sustainable actions and contributions to environmental preservation,” according to the project’s whitepaper.
EcoAI Coin is building a flourishing community of token holders and miners who are
committed to the project’s vision, which is three-pronged: supporting transparency in energy consumption, promoting the use of renewable energy sources and engaging in education to increase awareness of eco-sustainability in the blockchain space.
Featured image by Skitterphoto at Pixabay
Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.
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