Sustainability goes beyond being just a trend; nowadays, it has become a necessity.
Eco-friendly initiatives are a crucial movement for businesses and individuals who want to address the concerns that ruin the planet, like carbon footprint, which is hardly manageable since everything requires technology, which means a lot of energy consumption.
Still, for the past few years, blockchain technology has emerged with some green initiatives that could reshape the future of eco-conscious organizations that look for advanced ways to bring the business to the next level while still being mindful of the environment.
2024 is the year of improvements in the crypto market; in fact, with the adoption of the new consensus mechanism proof-of-work (PoS), the opportunities to create a sustainable supply chain, and trade renewable energy, the digital world is offering a new transformative perspective for the web3.
In this article, you can find a series popular green initiatives in the market:
Proof Of Stake vs. Proof Of Work
Proof of work (Pow) and Proof of stake (PoS) are both consensus mechanisms that stand at the core of the blockchain technology.
A consensus mechanism determines what transactions will be added to the blocks and at what intervals. In percentages, Pow dominates the crypto world, being the system for the market leaders like Bitcoin, Dogecoin and Litecoin.
On the other hand, PoS has been adopted recently by Ethereum, BNB chain, and Cardano, and it’s mainly found in smart contracts.
With Proof of work, the blockchain is secured through the energy used by miners to work, while Proof of stake comes up with sustainable initiatives.
As there is no need for intensive mining, it lessens the energy required to make PoS environmentally friendly. To have an idea of the impact of Pow, according to recent studies, bitcoin mining produces 62 metric tons of carbon dioxide emission yearly.
Additionally, it also consumes 112 TW hours of electricity and about 39 kilotons of electric waste every year. On the other hand, PoS uses computers with 8 GB of RAM for validation, which is a considerable reduction of the environmental impact.
The Mining Process
Mining is a complex process that requires a lot of energy. In 2024, the mining sector is going through a wave of innovation.
The Crypto market showcases green efforts to lessen the environmental impact of mining, adopting strategies that promote green values:
- Renewable energy: switching to renewable energy, like solar, wind, or hydroelectric power, can cut out the need for fossil fuels for the mining process, reducing the carbon footprint
- Energy-efficient hardware: it significantly reduces the overall energy consumption, drastically reducing the environmental impact of electricity.
- Carbon offsetting programs: they help reduce the carbon emissions produced by the mining process, supporting initiatives like renewable energy projects.
Renewable Energy Trading
Renewable energy has become a crucial part of the inevitable solution for sustainability. Energy sources like wind, sun, and biofuel offer eco-friendly alternatives to damaging fossil fuels.
They’re renewable because they have an endless supply, and they are naturally replaced. Still, traditional energy commerce organizations face many challenges that make communication more problematic, resulting in chaos.
This is where crypto comes in with a sustainable initiative in 2024. Thanks to the peer-to-peer network of blockchain technology, multiple parties can directly exchange units of energy.
Also, thanks to the smart contracts that automate the regular paperwork and the buying and selling process, this system is becoming an attractive solution for energy companies created on the distributed ledger.
Consumers can choose the power source they want to purchase, and they can choose whether they want it from independent or governmental organizations.
This interesting interconnection between blockchain and energy trading is a rising trend that is subject to deeper research to vote on the future efficiency of this practice.
Sustainable Supply Chain
The transparent and decentralized nature of the blockchain technology offers great advantages for companies who look for efficient ways to put a green label on their name and create a green supply chain.
Blockchain technology enables the monitorization of the products to ensure that the goods are transported properly and the packaging is traceable.
Still, the main point of this system is to monitor the environmental impact of the practices. Thanks to the ease of traceability, stakeholders can identify the weaknesses and strengths of their supply chain in terms of eco-friendliness and adopt the right strategies to minimize the damages.
Moreover, since it’s on a public ledger, even consumers can track the cycle of the products, providing them with the transparency that conventional chains don’t offer.
Blockchain For Climate With AI
Artificial intelligence is a powerful tool for addressing climate change. Its algorithms can perform an advanced analysis of data, make predictions, and, hence, enable the development of strategies for organizations that want to embrace eco-friendly practices.
The blockchain technology plays a crucial role in climate change mitigation efforts thanks to multiple features that, together with AI, might contribute to a better future for the planet:
- Data analysis: the decentralized nature of blockchain, enable the storage of climate-related data of companies, and, thanks to AI algorithms, they can extract valuable insights that drive efficient eco-friendly strategies.
- Smart contracts: they automate climate finance mechanisms for carbon markets and green companies, offering ease of accountability and transparency.
- DAOs: Decentralized autonomous organizations are built on a blockchain. With the help of AI, they empower climate initiatives, make collective decisions, and allocate funds for climate change projects.
The Bottom Line
In 2024, the adoption of environmentally friendly practices in the crypto market will reshape the future of finance.
Multiple industries are becoming eco-conscious, and they embrace technology to develop efficient strategies to address the environmental concerns, looking for new ways to put a green label on their name.
On the other hand, the transformative eco-features of blockchain also give extra points to the market, winning the trust of the users and creating an overall future-oriented green reputation that exceeds the traditional financial systems.