This Softly Spinning Gem:
The Crypto Community seeks to take responsibility for its carbon outputs and be a force for good.
Written by Giovan J. Michael at Mesh Mosaic
As the Silver Surfer, the shimmering sentinel of the skyways flies over planet earth, he ponders aloud:
“In all the galaxies, in all the endless reaches of space, I have found no planet more blessed than this — No world more lavishly endowede with natural beauty, with a gentle climate, with every ingredient to create a virtual living paradise! It is as though the human race has been divinely favored over all who live!”
I think few would disagree with the Silver Surfer, our planet is absolutely breathtaking. However, as we learn more about climate change (and the subtle ways that all of us contribute to it) we see that this beauty hangs in a delicate balance that needs to be protected. And while it’s easy to scorn the obvious culprits of pollution and carbon emissions like oil tycoons or fast fashion corporations, it’s much harder to take a look inward and reflect on what each of us is doing to contribute to the rising levels of carbon in our atmosphere.
When blockchain technology first gained popularity, it was easy to focus only on the positives. Blockchain allows people in developing nations to send and receive money without needing to go through a bank, it helps resist censorship from oppressive nations that seek to separate their citizens from the rest of the world, and it allowed for a creator economy that provides both accessibility and scarcity at the same time. There’s no denying that the implications of the blockchain are wonderful, and we haven’t really even started to scratch the surface of what blockchain can do for us, but as Web3 enthusiasts, we need to address the elephant in the room: Crypto pollutes, and if Web3 is going to become the tool for justice that we believe it can, then that fact is going to have to change.
So, we are faced with a question: how can we create a decentralized world that is also carbon neutral? It’s not an easy question to answer and it’s not one that this article alone will be able to tackle. But throughout this series, we hope to shine a light on new projects and proposed methods that allow us to eat our cake and have it, too. In this article, we will focus specifically on identifying the major issues that we face in creating a carbon-neutral Web3 and some of the most interesting methods that have been proposed to combat that issue.
We know we have a long way to go before we’ve done our part to protect the planet, but this is a community of idealists. In fact, the mere existence of Web3 is proof that most humans want to create a society that is equitable for all in a way that respects the planet. The goal of this series is to get people thinking about these issues because this isn’t something that any one of us is going to be able to do alone.
Part One: Identifying the Issue
The mathematical algorithms behind cryptographic hash functions are necessarily complex. So complex, in fact, that they irradicate all need for trust or a governing body to verify transactions or back currency with a valuable item like silver, gold, or cows. For all intents and purposes, this is a very good thing. It means that we can have a reliable system to back our digital currencies and ensure their value, without having to live at the mercy of an unjust government or tyrannical bank. When it’s more likely that you will find a single grain of sand hidden on a beach than it is that you will guess a hash function correctly, the fear of forgery or unbacked currencies goes out the window. Since Bitcoin, Etherium, and many other cryptocurrencies use this method of verification to introduce new tokens into the system, this process incentivizes miners to verify the transactions while also being compensated generously for their work.
While all of this is a very eloquent way to get around the need for trust, it comes at a hidden cost. The functions that miners have to solve in order to earn new coins would likely melt the computer, phone, or tablet you are using if you tried to solve them on your own. Do you know how people often say that our smartphones are more complex than the room-sized computers that took the Apollo mission to the moon? Now, imagine how much more complex these mining computers would have to be if their job would literally melt your phone or pc!
In order to stop their computers from turning into liquid magma, miners of Bitcoin or other currencies need to use massive amounts of energy while running their hardware, as well as powering and housing their fans and cooling systems. The infrastructure specialist Tara Shirvani spoke on this issue in her 2019 TEDx talk. She had this to say:
“The global energy consumption of Bitcoin processing around the world was as high as 22 terawatt hours in a year. That’s a lot of energy. In fact, it’s the same amount of energy a country the size of Ireland consumes in a year.”
If this high amount of energy usage sounds familiar to you, perhaps it reminds you of the Silver Surfers' old master, Galactus the Destroyer of Worlds who is known to eat entire planets to curb his eternal hunger. It goes without saying that this mining method is far from sustainable and if left unchecked will only continue to add to the already high levels of carbon pollution that are putting our beautiful planet at risk.
So, what can we do? Were all those idealistic possibilities of crypto just a pipe dream? Are we forced to go back to a fiat currency or else be complicit in a highly polluting system? No. There is hope, and measures being taken to avoid a Galactus-level threat to the environment, but those changes haven’t been fully implemented yet, and they are far from enough to solve the problem. That being said, let's look at some ideas and see what we can learn from them.
Part Two: Identifying Sollutions
The immense amount of energy required to mine crypto is a consequence of its verification system. This system is called Proof of Work or PoW. While PoW is the most commonly used system of mining, it is not the only system out there. Another system exists called Proof of Stake (or PoS), and it’s the first step that we need to take in our journey of making a decentralized world compatible with a carbon-neutral one.
Unlike PoW, PoS requires a dramatically smaller amount of energy which turns out to be a good thing for everyone involved. The miners themselves save on their outlandishly high energy bills because they no longer need to pay for thousands of computers, fans, and rent an industrial building to house the whole mining farm in. Where Proof of Work was essentially a competition between miners to see who could solve hash function the quickest and rewarding the winner with freshly minted tokens, Proof of Stake takes a different approach.
In PoS miners must own a significant amount of the tokens that they are mining, or to put it another way: they need to have a ‘stake’ in the coin. PoS rewards miners in three major ways:
- Size of Stake
- Coin Age Selection
- Randomized Block Selection
That last method, Randomized Block Selection, helps keep the system fair and prevents the oldest or the wealthiest stakeholders from being continually rewarded, allowing the rich to grow richer. These three methods are not the only methods possible in Proof of Stake, and any coin that wishes to use PoS can add other methods and qualifications that it thinks will better serve its community of users.
Etherium, one of the most popular cryptocurrencies in the world, has been saying for years that it will move to a proof of stake system, but it looks like that is finally happening. In a process it is calling The Merge, Etherium has decided to transition its system of mining from PoW to PoS as early as this year. Carl Beekhuizen, a writer for the Etherium Foundation Blog had this to say:
While Ethereum continues to use PoW for now, that won’t be the case for much longer. In the past few weeks, we have seen the emergence of the first testnets for The Merge, the name given to the moment Ethereum switches to from PoW to PoS. Several teams of engineers are working overtime to ensure that The Merge arrives as soon as possible, and without compromising on safety.
This is a big deal. It means that a leading cryptocurrency is trying to correct course and become more sustainable. While I commend Etherium for finally taking the leap, I highly doubt that it would have happened without pressure from its users. We can learn a powerful lesson from The Merge because it provides precedence for the fact that impactful changes can be made, but only if we want them to, and if we ask loud enough. As members of the growing Web3 community, the responsibility falls on our shoulders to continue to demand that the companies and currencies we support are doing everything they can to move toward carbon neutrality.
Part 3: Creating a New Economy
One of the biggest problems with the current money system (and the current economy for that matter) is that polluters are rewarded for polluting. There is absolutely no incentive to pollute less when the only goal of most companies is to produce as much as they can, as cheap as they can. Cheap production methods and high output levels have led to an unnecessary and embarrassingly high level of pollution coming from our factories worldwide. It’s embarrassing because it's avoidable, the only problem is there is absolutely no reason for companies to try and avoid these high levels of pollution when it allows them to keep their costs low and their profits high.
Many countries around the world have created Environmental Protection Agencies and created taxes and punishment to try and fight pollution, and yet the global temperature of the earth is still steadily rising. So, punishing companies who pollute is obviously not the answer. Instead, we need to find a way to reward companies that find innovative ways to cut down their CO2 emissions.
This process has already gone into effect with the invention of Carbon Points and Carbon economies. In a carbon economy, companies are allotted a certain amount of carbon points, each point representing one tonne of carbon that might be emitted into the atmosphere. If a company is able to cut back on its pollution through innovation or sustainable practices, then it can sell its remaining carbon points to companies that need them in order to produce. This means that companies are rewarded with their existing profit as well as an additional profit from the sales of carbon points.
While carbon economies are nothing new, they are far from perfect. They are often scattered, disorganized, and quite inaccessible to the everyday citizen who might want to buy a few carbon points. However, crypto allows us to solve all of these problems at once by tokenizing carbon points and allowing people to buy them with their digital wallets.
Enter Universal Carbon or UPCO2. UPCO2 advertises itself as the world's first tradable carbon token. Much like a dollar used to be backed by a physical amount of gold, these Carbon Tokens are backed 1:1 by a certified carbon credit. The currency uses the smart contracts in ERC-20 token on the Etherium network to wrap itself with these carbon credits, so as the value of these tokens goes up, so does the cost of polluting. Or, to put it another way, the more people who engage in this token and trade it, the higher the potential reward will be for companies who are able to innovate and cut back on their pollution and sell these carbon cryptocurrencies which keep growing in value.
As more carbon tokens come into existence, we will see how the unique benefits of crypto and Web3 will provide us better tools to combat climate change and create a sustainable future for all of us. Crypto has the potential to be a world-changing moment in the history of mankind, rewriting the rules of the economy, and solving problems of equity that were previously thought unsolvable. But this will not happen without human interaction, and if left unchecked crypto could actually work to the detriment of humanity. But that’s not why we’re here at Mesh Mosaic. We’re here to foster a community of creators that believe in the future I’ve written about above, and who are willing to ask for it. And ask for it loudly.
- “Silver Surfer, Volume 1” by Stan Lee and John Buscema
- “How Can We Sustainably Power a Cryptocurrency Future?” TEDxCambridgeUniversity, by Tara Shirvani
- Etherium Foundation Blog, Carl Beekhuizen
- Universal Carbon: https://universalcarbon.com/