The Carbon Footprint of a Branch of Fintech
Bitcoin, considered the first open-source cryptocurrency, was released back in 2009 and slowly crept up on the unassuming public. In the past, the entire coin mining community consisted of a handful of enthusiasts using their rigs with powerful video cards and processors. Today, the explosive and sudden growth of cryptocurrency has led to the development of specialized chips and a global shortage of GPUs (Graphical Processing Units).
As impressive as that may sound, with over 4,000 different altcoins and tokens to choose from and mine, it quickly becomes apparent that one of the major downsides of crypto mining is the ravenous consumption of electricity. Furthermore, entrepreneurs in crypto must be aware that nearly all the intensive Proof of Work (PoW) calculations are being done using non-renewable, environment polluting power sources. The current crypto-craze is only exasperating the problem and pushing out individual miners, due to the excessive barrier of entry. This inevitably advances the cryptocurrency economy towards the antithesis of cryptocurrency: centralization, as large corporations slowly become the only entities who have the necessary equipment and budget for mining. Entrepreneurs in crypto must seize the opportunity to prevent it from reaching that point.
This significant rise in power utilization is already an unfortunate disadvantage of this new phenomenon, which carries all the flags of being the next notable alternative financial system. Analysts at Morgan Stanley assert that, “Miners of bitcoin and other cryptocurrencies could require up to 140 terawatt-hours of electricity in 2018, about 0.6% of the global total.” That is set to be higher than the projected demand from electric vehicles in 2025. A glaring bulk of that electricity produced is from dirty sources, such as coal, petroleum and other fossil fuels.
Blockchain Goes Green
Blockchain technology is beginning to go green, and entrepreneurs that are looking for eco-friendly, yet innovative blockchain technologies should take note of companies such as GEAR, which is working to give back to the Earth using renewable (GEAR) powered data mining centers.
GEAR utilizes four different main pillars: GEAR Earn, GEAR Grow, GEAR Reserve and Neutral:
- GEAR Earn is an approach that will distribute the network’s annual net proceeds from mined crypto to provide token holders with an income stream.
- GEAR Grow mitigates the need for future outside capital by financing development of GEAR’s networks of green energy farms and data center facilities.
- GEAR Reserve is a reserve fund that allows for stable expansion and advancement of the GEAR network, GEAR facility maintenance, and as contingency capital for unforeseen events.
- Neutral GEAR assists and nurtures research investments and development programs to help discover more efficient ways to produce green energy, enhance renewable technology, and offer other recyclables.
GEAR, on the other hand, is not the only way blockchain can assist in saving the environment. The fundamental technology behind blockchain means that every transaction is transparent, a saving grace for the public that cannot be sure of whether a product came from where it claims it is from. It can help curb fraud and unethical practices that may occur in consumer markets. This doubly applies to charities, where one cannot be sure if the money that was donated has gone straight into the CEO’s pocket, or actually helped the charity. Blockchain projects such as FoodTrax or Bitgive are two such examples of environment-friendly cryptocurrency companies.
It is up to entrepreneurs to be aware that there are numerous advantages to going green in blockchain. In almost every case, the benefits are due to the absolute nature of blockchain. Now is the time to make the utilization of these services mainstream to reduce the carbon footprint of blockchain technology.