For some, blockchains are still most strongly associated with speculative cryptocurrencies like Bitcoin. Yet, since the invention of blockchain as a solution to the Byzantine General Problem in software, the technology has since spawned numerous other cryptocurrencies, more advanced protocols, and applications, giving rise to an entirely new terminology with words like Ethereum, Ripple, Doge, DeFi, ICOs, DAO, and dApp. The technology is certainly transformational.
Thanks to its capacity to decentralize data and processes while simultaneously assuring top-tier security, blockchain is being touted as a core infrastructure that will change the way commerce works in supply chains, medicine, insurance, transportation, commerce, energy trading, and carbon trading. However, like any new technology, blockchain has various drawbacks that are hampering its adoption.
Blockchain’s Environmental Impact
Although ‘mining’ Bitcoins may be a digital process, it requires a huge amount of energy. As a comparison, annual energy consumption from mining Bitcoins equates to the same amount as the country of Ireland. The reason behind this energy expenditure is the Proof-of-Work consensus algorithm. Server farms are pitted against one another to solve complex mathematical problems.
The more processing power you throw at the problem, the higher the chance of finding the right answer, resulting in the addition of a block of transactions to a chain in which all transactions are stored and linked together (hence blockchain). Solving the mathematical puzzle and adding a block to the chain earns the miner a bitcoin reward.
Currently, the reward is 6.25 btc, and this reward halves approximately every 4 year. As decentralized, consensus-based technology becomes more prevalent across industries, the energy powering these digital ledgers becomes more problematic.
Like server farms on which cloud data centers run, ASIC farms mining bitcoin and other cryptocurrencies require significant amounts of constant energy. To address climate concerns, some firms, such as Apple, Facebook, and Google, have started using clean electricity to power their data centers. Ireland, a location of choice for many tech companies in the EU, is seeing an increase in data processing and, as a result, an increase in structures to store it.
Ireland has planned to authorize 31 new data centers as of January 2020, and the country already has some of Europe’s largest facilities. In 2019, Facebook announced that it would expand its massive Irish data center from 86,000 to 150,000 square meters.
Steps To Reduce Blockchain Footprints
Despite efforts to find renewable ways of powering mining, the negative impact remains. Elon Musk stated only a few months ago that Tesla would stop accepting bitcoins owing to the high (dirty) energy consumption required for bitcoin mining. Musk’s stance emphasizes the gravity of the circumstances: the sector must tackle crypto sustainability urgently or endanger stifling crypto development and growth.
On 20 Oct 2021, Bitcoin had a market capitalization of over $1.2 trillion with the total market cap for crypto above $2.5 trillion. As corporations like PayPal, Visa, and Square spend billions in cryptocurrency, market players must take the initiative in lowering the industry’s overall environmental footprint.
While Ethereum is getting ready for its move from Proof of Work to a much more energy-conservative Proof of Stake algorithm, no such actions are being discussed for bitcoin (yet). The Crypto Climate Accord (CCA) is a non-profit inspired by the Paris Agreement of 2015 with an aim to decarbonize the crypto industry.
With more than 40 signatories, notably Ripple, the World Economic Forum, the Energy Web Foundation, the Rocky Mountain Institute, and ConsenSys, the group is focused on making all of the world’s blockchains renewable-powered by 2025.
Ripple, for instance, committed to co-invest $44 million USD with Nelnet to support solar power, an investment that would avoid 1.5 million tons of CO2 from being emitted. While several sector players are looking at sustainable power options, the sector as a whole still has a considerable road ahead to travel. We need to start thinking about the problem in a different way.
Growing A Handprint To Regenerate The Planet
Sourcing 100% renewable energy remains a challenge for many blockchain projects and startups all over the world. Moreover, doing so does not generate a competitive edge as consumers and clients increasingly expect energy to be clean rather than dirty.
For blockchain applications that run on a specific protocol like Ethereum, EOS, or Polygon, the teams behind the applications have limited influence on how the protocol works and can thus not influence its environmental footprint. Besides redeveloping a decentralized application on a more energy-efficient blockchain, there is little they can do.
At least that was the case until companies like Handprint Tech showed up. Whereas a footprint captures all the negative impact one has on the planet, a handprint is the total of all your acts that leave a positive impact on Earth. By focusing explicitly on positive impact, they are challenging the carbon neutrality narrative as insufficient and ineffective.
Instead of ‘being less bad’, companies can focus on how they can ‘do more good’. By focusing on regenerative action that helps reserve, restore and rewild natural ecosystems, businesses of any size can have a meaningful impact on the environment.
Handprint is planet hackers, sustainability rebels disguised as nerds, building a direct pathway into the regenerative economy for millions of businesses, including blockchain companies. Handprint’s technology automates and integrates impactful action into every transaction.
The company started by developing a plugin for e-commerce that empowers merchants to make and display a regeneration pledge at checkout, boosting cart conversion. Since then, Handprint has broadened its capabilities to allow businesses to link positive impact actions to newsletter signups, unique website visitors, online contracting, or even likes, follows, or shares on social media.
The start-up helps these businesses connect their funds with respected NGOs that run projects in reforestation, habitat preservation, ocean plastic cleanup, coral reef reconstruction and even social justice or gender equality projects.
Through its technology, micro-contributions to such projects can seamlessly be integrated into existing transactions, ensuring that your handprint grows as your transaction volume increases, so that companies can grow with the planet.
Handprint is now collaborating with blockchain firms to integrate the fight against climate change into all things blockchain. By transforming transactions into actions, blockchain firms can incorporate micro-donations to benefit impact initiatives that matter to them. What if each 100th block was linked to regeneration, or every trade was linked to the planting of a tree?
What if each NFT minted on OpenSea’s marketplace actually cleaned the oceans? While the NFT space shows a lot of potential for this concept (with various POCs underway), Handprint is expecting more blockchain entrepreneurs to see the writing on the wall and start to get serious about environmental impact.
When companies have no reasonable way to reduce their footprint, their customers will demand they find other ways to save the planet. Handprint’s aim is to help businesses and people in creating these positive impacts in a simple and accessible way.
Handprint is not only building the digital infrastructure to encourage positive change, but is also allowing businesses to showcase their efforts to their audiences and connect directly with the tangible, positive impact they are having on the natural world.
Climate change is already having catastrophic effects. Droughts, stronger typhoons, heat waves, and mudslides are just some examples we have seen in 2021. It is not enough to make idealistic pledges to sustainability. As Greta Thunberg said, we are sick of the ‘blah blah’ generation. We need to stop talking and start taking action.
Crypto, in collaboration with climate activists, clean tech sector experts, and even governmental actors like the World Bank, can promote blockchain as the most feasible route toward achieving a green, digitized economic future.
There is a natural convergence. Blockchain entrepreneurs are rebelling against an outdated financial system, Handprint is doing the same against the outdated approach to sustainability. Time to get our hands clean!
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