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The surging demand for cryptocurrencies and accelerating adoption of blockchain-based solutions have highlighted a critical issue: the technology’s growing energy consumption and its impact on our climate.
A new private-sector initiative known as the Crypto Climate Accord was recently launched to make the cryptocurrency industry greener, led by the decentralized blockchain-based energy market, Energy Web, in partnership with RMI and Alliance for Innovative Regulation. The initiative aims to make the cryptocurrency industry fully renewable by 2030, or sooner. Inspired by the Paris Climate Agreement, the agreement plans to bring together the crypto and financial technology industry to build sustainable infrastructure.
“Today, we’re excited to announce the next step in Ripple’s sustainability journey: our commitment to the Crypto Climate Accord(CCA) — a new initiative organized by EW, RMI, and the Alliance for Innovation Regulation (AIR) to make the cryptocurrency industry 100% renewable.”
Ripple joined along with over 20 supporters across different industries and blockchains, including the United Nations, CoinShares, Compass Mining, the XRP Ledger Foundation, and ConsenSys.
What’s interesting to note here is, this wasn’t Ripple’s first shot at maintaining sustainability. The previous year, the San Francisco-based blockchain firm, partnered with Energy Web (EW) and the Rocky Mountain Institute (RMI) to decarbonize public blockchains.
On the contrary, cryptocurrencies have a bad reputation when it comes to energy usage especially Bitcoin.
According to this recent report, the Ethereum network consumes around 33.6 terawatt-hours of electricity per year when measured, on par with a small country like Denmark. This represents about a third of the estimated 95 TWh per year consumed by the Bitcoin network.
“As Bitcoin’s price goes up, the energy consumption, the carbon footprint of PoW mining that happens to validate transactions, continues to scale aggressively. 1 Bitcoin transaction is equivalent to 75G of gasoline being burnt.”
Philanthropist Bill Gates was also one of the skeptics, with the computer pioneer recently commenting,
“I’m not a fan of Bitcoin specifically because of all the energy it uses.”