Today is Earth Day. Have you reflected on how your choices influence our future?
There is no better day than today to think about your environmental footprint and the impact of what you do on the beautiful world we live in. Frequently, Earth Day is also a day on which we collectively point fingers and assign blame or, contrastingly, set examples and bestow accolades. Eating meat is bad for carbon emissions but planting trees is good, and so on. Unfortunately, such simplified ideas do not always represent reality or are based on misleading assumptions.

A popular narrative in the press over the past year is that cryptocurrencies, and Bitcoin in particular, are environmental outlaws. You may have heard that one Bitcoin transaction is equivalent to a million Visa transactions, or that the contribution of Bitcoin to climate change is similar to a country like the Netherlands. Frequently, this negative portrayal of the underlying technology of Bitcoin reflects onto other cryptocurrencies or the blockchain in general. This is like saying that since my brother is a criminal, I must be a criminal, too. It is also a myopic view – data centres worldwide use three and a half times (350%) the energy of the Bitcoin network , but people are not suggesting we stop binge-watching Breaking Bad or give up email.

Bitcoin appears to have a large carbon footprint due mainly to its proof of work consensus (POW) which requires intense computing power to ‘mine’ the coins. However, this mechanism has the benefit of being truly decentralised and makes transactions more secure than crypto currencies based on other consensus protocols such as proof of stake (POS). New cryptocurrencies, based on Avalanche (AVAX) or Binance Smart Chain (BSC) are much less environmentally impactful and have an energy consumption that is in the same order of magnitude as existing payment systems such as Mastercard or Visa.

We need to reduce the energy consumption of crypto currencies but that does not necessarily mean that we should dismantle cryptocurrencies. The truth is that progress is essential and fundamental to a growing human condition. So the dilemma is how can we drive progress and at the same time heal our environmental wounds? Past decades have brought progress – the Industrial Age of manufacturing, cars in every garage, computers in every home – but these came at a cost we didn’t realise until recently. Today, we have the foresight of knowing that we need evolution but should offset the harm with the benefits it can create.

The pace of change and adoption could be on our side.
Blockchain and cryptocurrencies are a new technology with an incredible pace of development. There are so many opportunities for improvement and innovation (think of surfing the Internet on AOL or trying to find information on Ask Jeeves). In evolutionary terms crypto is at inception, like the Wright brothers launching their prototype ‘flying machine’ off that sand dune in Kitty Hawk, North Carolina. Yet, pundits compare the crypto industry with existing legacy systems that are as mature as an Airbus A380.

The Web3 evolution will take decades, but its acceleration and impact have already ignited. After all, the Internet was born in the 1960s at DARPA. It was a full 30 years later before email reached wide adoption and it took a full 57 years for it to reach a point where Tik-Tok taught your mom how to do the Polly Shuffle! Judging Bitcoin and cryptocurrencies on what is happening now and not what they could be in the future, misses the point. When you dive deep, crypto currencies would appear to be much better for the environment than legacy payment or transaction systems. One of the very cool features of crypto is smart contracts. This software-driven action allows users to execute specific transactions automatically decreasing intermediation costs and environmental footprint. Look at their potential differently: how many business trips could be avoided? How many transactions can be performed online while saving environmental, social and financial resources? How much of the electricity requirements of Bitcoin mining and consensus could be shifted to renewable energy sources?

The contribution of Bitcoin and cryptocurrencies to society in general, is controversial. Even so, the technology is new and incremental improvements in efficiency are already coming.
Ethereum is transitioning from a Proof of Work to a Proof of Stake consensus mechanism, zero-knowledge (ZK) roll-ups aggregate transactions before they put them on the network, reducing the work involved in transacting and thus the energy consumed. Initiatives like the Crypto Climate Accord are working to decarbonize the carbon sector. Green coding practices, focusing on creating programming code that has minimal energy consumption, are under development. DAOs buying carbon offsets have huge traction. Innovative companies are developing greener and efficient mining practices by utilising wasted electricity to mine bitcoin and using the proceeds to pay for more renewable sites. Imagine that future – Bitcoin mining saves the planet!

Cryptocurrencies and blockchain are not perfect but have huge potential and if used correctly, have the potential of leaving this world better than we found it. Jump on board the Web3 train now, rather than watching it leave the platform! To help this nascent technology improve, take steps to educate yourself (Chamonix Crypto is here to educate executives on Web3) and then jump aboard. So, on Earth Day ask yourself one question: Shouldn’t I give it a try?