The Crypto Climate Accord: crypto to go green
Industry heads are flocking to join the long due green renaissance of crypto after institutions around the world refused to allow the enormous energy consumption of mining
Inspired by the Paris Climate Accord, the Crypto Climate Accord (CCA) signed in April 21, seeks to transition all blockchain mining activities to green energy, and complete carbon neutrality by 2040. This move may be interpreted as the industry’s logical answer to drawbacks after institutions and businesses cracked down on crypto due to environmental concerns.
Elon Musk, for example, had withdrawn Bitcoin transactions as method of payment for Tesla vehicles, due to its mining activities exceeding the carbon consumption of the entirety of Argentina. In China, several crackdowns were issued citing environmental concerns, while in the US, a bill banning blockchain mining in New York was barely blocked, after obsolete coal power plants were reissued for ming.
Factors like these caused a major price dip across the crypto collection, from which the industry is slowly recovering as new innovations on sustainable mining come through. 45 companies and individuals have already signed the accord.
The initiative is led by three organizations, the Rocky Mountain Institute and the Energy Web foundation, which are NGOs focussed around sustainability, and the Alliance for Innovative Regulation, and international advocacy for fair financial systems.
While the market obliges crypto businesspeople to engage in the project, it is not devoid of problems. Green energy remains to be fairly scarce, and dedicating a large portion of it to mining, would create competition for it with other sectors. This creates a similar scenario to what happened in Iran, where crypto mining using hydro plants caused power shortages throughout the country.
While in the case of Bitcoin, the problem could be cushioned by its recently declined hash rate, projections suggest an increasing rate in the future. The global hash rate had gone down significantly after the Chinese government disbanded several mining operations across the country, which led to mining difficulty, the complexity of calculations to generate one coin, going down as well.
Therefore, energy consumption had decreased along the way. A mining boom to the use of renewable energy however will see the opposite effect, a new crypto gold rush, and the question arises whether the power demand can be met.
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