Cryptocurrencies represent not only the first real innovation for our monetary system since its conception but also the only viable alternative to it.
There are many arguments that the adversaries of cryptocurrency present that are easily dismissed as false.
The huge requirement for energy by Proof-of-Work coins like Bitcoin is not one of them.
But this huge need for energy comes with some amazing opportunities that far outweigh the negative impact Bitcoin mining has on our environment.
In this article, we want to look at how Cryptocurrencies and the Blockchain can be beneficial for the climate change movement, enable consumers to make environmentally conscious decisions and how the Blockchain can be used to save our planet.
Cryptocurrencies don’t require any paper
Cryptocurrencies eliminate the need for cash, bank statements, filing taxes, reminders for overdue payments, bills, receipts and other paperwork associated with our current financial system.
All that paper could soon be replaced by Smart Contracts and transactions on the Blockchain.
Some Cryptocurrencies actively subsidize and enable renewable energy producers
Some Cryptocurrencies are good for the environment by design. One such example is SolarCoin (SLR), established in 2014. SolarCoin aims to reward solar energy producers, based on how much solar energy they have produced.
Producers can claim SolarCoins at a rate of “one SolarCoin (SLR) per Megawatt-Hour (MWh) of solar energy produced.”
SolarCoin is another way to incentivize the production of solar energy. Anyone that produces solar energy can claim their SolarCoins and trade them on an exchange like Bittrex for other cryptocurrencies, although the volume has died down quite a bit recently.
Cryptocurrency mining enables sources of renewable energy that were previously unprofitable
Renewable energy, especially geothermal, hydroelectric and wind power, have one major drawback:
The areas in which they naturally occur are rarely populated enough to efficiently use the energy they produce. The energy has to be transferred at a massive loss to where it is needed.
One extreme case is Germany: Germany transfers it’s renewable energy to Norway where it is used to pump water up a mountain and into a dammed lake.
When energy is required, the dam is opened and the water flows back down, powering a turbine and generating energy.
A more efficient way would be to deploy cryptocurrency miners right next to sources of renewable energy, eliminating the need to transfer power at a loss through the electrical grid. One such example is Hydrominer, another is the failed Envion project. Both projects didn’t take off quite as expected.
There are some efforts by
energy providers to utilize renewable energy more efficiently through
cryptocurrency mining, but so far, no major mining farms have been built.
Cryptocurrencies present an alternative to the system that is responsible for climate change
Climate-Change is largely
caused by big corporations exploiting our environment for profit. The empowering nature of
cryptocurrency as money of the people enables everyone to take a stance against
lobbyism, abuse of power and the destruction of our environment through
pollution and greed.
Blockchain technology can support and enable environmentally conscious consumer behaviors
The Blockchain can not only be
used to transfer value – You can also track the origin, supply chain and even CO2 footprint of
products and goods. There are numerous developer teams and companies
working on implementing functionalities that would enable consumers to have
verifiable, immutable information readily available before their purchase.
The Blockchain makes the flow of money transparent and accountable
The main use-case for Blockchains at the moment is to keep a distributed ledger of transactions. This ledger shows the Balances of every address in the network. Now imagine if campaign donations for politicians were as transparent as the Blockchain – We would immediately know if someone took money from lobbyists or other questionable sources and what happened with that money.
You can even hold a country accountable for how they spend the taxes they collect and enforce more environmentally conscious ways to distribute our tax-dollars.
A look at the environmental impact of the Bitcoin network
All that said, cryptocurrencies and Bitcoin, in particular, have to continue working on becoming more efficient and less energy reliant.
There are already multiple cryptocurrency projects working on proof-of-stake, a more energy-friendly approach than the current proof-of-work that is powering most of the big cryptocurrency projects.
If you want to do your part, share this article or our infographic with the #cryptoforclimate Hashtag.