The turn of the century has brought new advancements, unforeseen events, and a ray of hope in the future outcome of the planet. Technology progressed at an astounding rate that far surpassed expectations and introduced new technology that has resulted in more streamlined electric vehicles, a billionaires space race, and the surge of a new currency.
Perhaps one of the most notable breakthroughs to take off within this century is the introduction of a new digital tender, cryptocurrency. In the late 1990s and early 2000s, crypto was attempted by a few individuals; however, any significant plans never made it to the development stage.
Once 2009 came about, Satoshi Nakamoto released Bitcoin to the public, making it the world's first decentralized cryptocurrency. This announcement was met with excitement, confusion, and doubt, as the tender seemed so advanced for the time many believed it wouldn't take due to its complexity and unfamiliar nature.
Fast forward to 2021, and the term Cryptocurrency, and Bitcoin, in particular, is practically a household word. Skyrocketing in popularity since 2009, this newer form of currency has taken the world by storm and cemented itself as the future of peer-to-peer currency exchange.
Although inspiring, the rise of cryptocurrency has seen a fair share of critics who question the currency's environmental footprint and necessity at a time when climate change remains a growing concern amongst much of the population.
The majority of crypto's environmental footprint is due predominately to crypto mining, the action in which large processors compute complex coding systems to create new coins that are introduced into the market. Although mining isn't a necessity for all types of cryptocurrency, the environmental footprint that it does create is enough to make some hesitant to adopt this money tender.
There have been estimates that Bitcoin alone contributes as much carbon dioxide emissions on an annual basis to rival the country of Denmark. Earlier this year, a bill was even introduced to the New York Senate to temporarily put a stop to Bitcoin mining for three years to assess its environmental impact.
However, there have been significant attempts to improve cryptocurrency's environmental footprint. From reusing old power plants for the sake of lowering carbon emissions to enacting the Crypto Climate Accord, the consumer push toward sustainable alternatives is slowly being met, meaning a cleaner and more promising future for society.
Crypto Climate Accord
The Crypto Climate Accord (CCA) was created in April of this year as an attempt to hold miners accountable for their environmental footprint. Modeled after the infamous Paris Climate Agreement, the CCA is a private-sector-led initiative created to decarbonize the cryptocurrency industry.
The CCA aims to achieve net-zero greenhouse gas emissions by 2040 and develop regulations, policies, and standardizations for 100% renewable blockchains by 2025.
Their positive outlook on this initiative is as follows:
"The Crypto Climate Accord will create wins for both the planet and the global economy. For climate advocates, we can eliminate emissions from a fast-growing source of electric load. For the cleantech industry, we can onboard an entirely new class of customers with significant demand for low-carbon solutions. For the crypto industry, we can help support widespread adoption of crypto by making the industry more sustainable."
CCA has a detailed solutions section on their website explaining the many different ways that cryptocurrency can become more sustainable with a group effort and determination. One of the more important steps in this plan is the understanding, reporting, and submission of the environmental footprints of individual currencies; knowing where their current footprint stands will make it easier to improve upon. In addition, submitting their reports to the Environmental, Social, and Governance (ESG) group can help hold the miners accountable for their footprint and aid in a sustainable action plan.
To date, the Crypto Climate Accord has gained the support of 150 companies and individuals who span multiple fields around the country. This initiative can ultimately lead to many technological advancements, more environmentally-focused regulations, and a future with an eco-friendly currency.
The More Sustainable Option?
Granted crypto's footprint is relatively large, it might be a more eco-friendly option than centralized currency due to the thousands of banks, ATMs, and other financial facilities spread throughout the United States. Further, crypto is believed to have a lower footprint compared to the gold mining industry -which carries a significant environmental footprint due to excavation, large machines, processing plants, and transportation costs.
One study comparing gold mining, banking institutes, and Bitcoin found that the latter consumes/emits "less than half of what the gold mining industry does, and less than one-fifth of what Bank branches and ATMs do." That said, comparisons such as these haven't been studied to a vast degree, meaning there is still room for nuance. Moreover, looking at the entirety of each's environmental impact - rather than just carbon emissions - can give a better overview of which is truly the most sustainable option. For now, it does seem as though the continued greening of crypto can make the currency a more sustainable option in the future.
Nevertheless, crypto's rise in notoriety has further proved the notion of an unpredictable future. And though some might not have been able to predict this outcome, what we can do is continue to push for more sustainable initiatives. The Crypto Climate Accords is a shining example of consumer demand prompting real change, and can ultimately lead to a shift in the industry that can result in a greener, decentralized tender.