Energy Web CEO Jesse Morris explains why blockchain can make “going green” more efficient, how fighting climate change is easier and why they are building on Polkadot.
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The Metaverse is quickly becoming one of the most important places for companies and individuals looking to expand their reach. New findings from research firm MarketsandMarkets predict that the Metaverse market size will grow from $61.8 billion in 2022 to $426.9 billion by 2027. In addition, a recent report from Juniper Research links nonfungible token (NFT) growth to metaverse use cases. According to these findings, metaverse-related NFTs will experience an increase from 600,000 transactions in 2022 to 9.8 million by 2027.Given this potential, a number of regions across the globe have started to establish a virtual presence. For example, the emirate of Dubai announced the launch of the Dubai Metaverse Strategy in July this year. As Cointelegraph previously reported, the Dubai Metaverse Strategy aims to attract companies and projects from abroad while also providing support in metaverse education aimed at developers, content creators and users of digital platforms.While the concept may sound futuristic, industry experts believe that this is a logical progression. Hrish Lotlikar, co-founder and CEO of Superworld — an augmented reality content platform — told Cointelegraph that as Web3 technology becomes integrated into everyday lives, future-forward regions, governments and organizations will capitalize on communication, gamification and monetization opportunities in the Metaverse. Organizations bring regions to the Metaverse for a purposeThis appears to be the case, as many organizations are focused on establishing geographical territories within Metaverse ecosystems. For example, Africa can be accessed virtually in Ubuntuland, a Metaverse platform that houses a land called Africarare. Mic Mann, co-founder and CEO of Africarare, told Cointelegraph that Africarare connects Africa to the global digital economy:“Africa is one of the fastest growing populations in the world, and by 2050, it’s predicted that it will be one of the biggest populations. Therefore, we thought this was the perfect time to upskill Africa’s youth for this new world. Africarare aims to create the future of work for Africans and organizations who wish to connect with people across this continent.”Mann added that Africarare has secured a 12×12 village, or 144 plots, of virtual real estate in Ubuntuland to establish its visibility. He explained that users are defined by digital avatars, which can enter Africarare’s “central hub” land to partake in custom experiences. “These range from art to education and include experiences like galleries, live performances, stand-up comedy, video content channels, film festivals, safaris and more.” Image from Africarare. Source: AfricarareAlthough Mann believes that Africarare will enable a sense of virtual tourism, he pointed out that the project is meant to create improved work and educational opportunities for the African population. “We believe that the Metaverse is the world’s greatest equalizer. Through Africarare, we can allow Africans to partake in this new space and thrive,” he said. In order to ensure this, Mann explained that the World Data Lab — a data enterprise based in Austria — recently acquired a 6×6 village in Ubuntuland to develop their presence and connect to other organizations within this part of the Metaverse. According to Mann, World Data Lab plans to use this collaboration to raise awareness of key-impact topics through virtual initiatives. “This includes developing a data science “metaversity,” to better understand Africa’s growing population.” Mann further commented that companies establishing a digital presence in Ubuntuland will seek to recruit a digital workforce from the platform’s user base. Mann noted that users in Ubuntuland will use the UBUNTU token as its currency, which is built on the Ethereum blockchain and will be made available later this year. In the meantime, Mann remarked that art galleries across Africarare have already been established and are dedicated to showcasing Africa’s prolific creativity. “Over 15,000 users visited the platform during an alpha launch we did in October 2021 with our Mila Gallery,” he said. Based on this success, Mann noted that the Mila gallery, which means “tradition” in Swahili, will continue to host curated collections by some of Africa’s foremost artists. He also shared that Africarar’s Inuka gallery — Swahili for “rise” — will feature works by emerging African artists. “Both galleries will stage various exhibitions on an ongoing basis with art pieces being sold as NFTs,” he said. While Ubuntuland is focused on Africa’s metaverse, a project known as Alóki will allow users to virtually experience the Central American country of Costa Rica. Bartek Lechowski, chief operating officer of Alóki, told Cointelegraph that the platform reconnects people to nature through blockchain technology. “This play-to-own metaverse will enable users to do good for the planet and help build a sustainable future for society at large,” he said. To accomplish this, Lechowski explained that Alóki offers its users the chance to virtually explore Costa Rica’s rainforests while participating in sustainable development. This will be accomplished through the project’s blockchain-based game in which digital actions mirror those in the real world via NFT ownership. Lechowski said:“Alóki aims to make people pay attention to the climate change problem and be interested in contributing to something useful. For example, planting a tree in the Alóki metaverse can result in a real tree being planted in the Alóki Sanctuary of Costa Rica.”Lechowski — who is also an owner of the Alóki Sanctuary, which is a 750-acre patch of rainforest in Costa Rica — said that thei project aims to plant more than 10,000 trees through its Metaverse initiative. Image from Alóki. Source: Alóki“We currently have a 10-person team of sustainable farmers and are in the process of hiring even more. We’re working hard to create harmonious heaven — we’ve already planted a whopping 11,000 fruit trees,” he added. In addition to ensuring sustainability, Lechowski remarked that the project aims to create communal buildings that will house coworking spaces and social spaces. “Our online users will eventually be able to come and enjoy Alóki Sanctuary as a reward for their sustainable actions,” he said. Although Alóki has yet to launch, Lechowski explained that the project will take a simplified metaverse-like model approach that will gradually be developed overtime. “We plan to launch Alóki for our community as soon as there is a common Metaverse standard implemented to work across different platforms,” he remarked. Fortunately, work being done by the Open Metaverse Alliance is currently focused on implementing such standards.It’s also notable to mention that a nonprofit organization known as The Heritage Hub will soon allow users to experience Ukrainian history within the Metaverse. Brittany Kaiser, co-founder of the Heritage Hub, told Cointelegraph that the organization uses digital scanning, 3D modeling, and NFT tokenization to preserve local heritage to be shared globally in a metaverse museum. She said:“The problems it solves are three fold: Firstly to have a digital archive of all heritage and cultural sites, artifacts, art and other items of importance to a nation’s history and identity. Secondly, it allows all items to be encrypted on the blockchain for tracking and traceability in case of destruction or disappearance. Lastly, it allows us to use Web3 business models to fund the historic preservation of these sites and items.”Kaiser explained that the first Metaverse being built is for Ukraine to ensure that anyone in the world will have a chance to experience the important cultural heritage of the country. Taras Gorbul, co-founder of the Heritage Hub, added that people will also be able to contribute to digital tourism revenue that will help the country rebuild after the war:“Users will be able to visit sites that are still standing, but that are difficult to visit. Eventually, through an avatar, users will also be able visit sites that have been destroyed in the war but have been rebuilt digitally.”A metaverse with purpose to drive adoptionAlthough it’s innovative for organizations to recreate various regions in the Metaverse, it remains questionable if users will want to engage with these platforms. For instance, market research firm Ipsos recently conducted a survey for the World Economic Forum that found half of adults across 29 countries are familiar with the Metaverse. While notable, the study also found that excitement for metaverse adoption is significantly higher in emerging countries in comparison to most high-income countries. The report noted: “More than two-thirds of people in China, India, Peru, Saudi Arabia and Colombia say they feel positive about engaging with extended reality, compared to fewer than a third in Japan, Great Britain, Belgium, Canada, France and Germany.”This in mind, Mann believes that education is still needed in order to drive adoption. “Education and access is needed to up skill and empower Africans and the general population about these new technologies and how they can create equal opportunity,” he said. Echoing this sentiment, Lotlikar noted that regions like Dubai that are looking to enter the Metaverse also require education that extends beyond the hype of NFTs and blockchain technology. “The vast majority of people need to understand how they can benefit from this technology in the real world,” he remarked. In addition, Lechowski pointed out that a Metaverse with purpose will be essential moving forward. “Simply redirecting daily activities into the Metaverse is not going to drive massive adoption. We believe that providing custom experiences might do just that.” For instance, even if a Metaverse is only capable of providing an imitation of reality, Lechowski believes that Alóki has the potential to democratize access to nature in the long term.Kaiser further noted that as more culturally important parts of Ukraine are added to the Heritage Hub’s digital museum, the initiative will be able to roll out tools for more teams wanting to add items to the museum themselves. “In the future, other countries will be able to use the Heritage Hub tech stack to create digital tourism revenue and to open source access to their heritage for education and recreation.”
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Using nonfungible tokens (NFTs) as carbon credits, or carbon offsets, reveals an outlet for Web3 technology to foster a more environmentally friendly future.NFTs as carbon credits are a slow-rolling trend in the refinance market and decentralized finance (DeFi). Most of this activity currently takes place on the Polygon (MATIC) blockchain, as it has already offset its entire carbon footprint. However, the way these digital assets work with carbon credits differs from other ventures in the space. Rather than a store of wealth or a piece of unique digital art, carbon credit NFTs serve as a repository of information related to a specific batch of carbon offsets. This information could include, but is not limited to, the total number of offsets (i.e., how many metric tonnes), the vintage year of the removal, the project name, geographical location or the certification program utilized. Such NFTs are then fractionalized into Ethereum-based ERC-20 tokens, fungible with each other. However, unlike the majority of NFTs available to consumers, a properly functioning carbon credit NFT comes with a catch. In order for it to serve its true purpose, verifying and standing in for carbon emission offsets, it must be burned. In off-chain settings in the carbon market, this is called “retirement.”A core member of KlimaDAO, a decentralized organization, using DeFi to fight climate change, explained to Cointelegraph how this works both on- and off-chain. “Retirement means that someone is essentially taking that carbon offset, claiming it for its environmental benefit, meaning that they’re basically offsetting their emissions. Then that carbon offset is permanently taken out of circulation and can no longer be traded or sold to anyone else.” However, when it comes to retiring these carbon offsets in an on-chain setting, one must burn the token once the retirement certificate is obtained. In other words, it must be removed from the database and no longer available for trades. It’s very important that if there is any type of environmental claim being made regarding the offset being embedded in an NFT, that NFT is actually burned in some respect, and a specific entity or individual is named to claim that environmental incident.There are a large number of projects popping up in the space that claim to implement NFT technology for carbon offsets, including carbonABLE and MintCarbon. However, with a market value of over $850 billion, the carbon credit industry is not a small one. Like other profitable markets, it is susceptible to scams. As NFTs continue to rise in popularity, NFT scams become more prevalent. Related: Scams in GameFi: How to identify toxic NFT gaming projectsKlimaDAO stressed that projects that claim NFTs as carbon credits should also carry accreditation from internationally recognized standards. Principally, an endorsement from ICROA, or the International Carbon Reduction and Offset Alliance. If not, projects with this claim should be looked at carefully before investing under that pretext. Although the carbon credit market is valuable, the way it operates is still vunknown to the masses. “The thing is, you’re combining Web3 with a market that isn’t very well known. So, unfortunately, you do have various actors that are taking advantage of people.”Nonetheless, these carbon offset NFTs could be really useful if fully disclosed because they would be doing what they promise. These offsets provide an injection of capital from some other source to maintain and develop a project. This could range from renewable energy generation to forest protection or reforestation.
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Data from a recent Ark Invest report highlights another utility for Bitcoin (BTC) mining in the realm of sustainability and energy. According to the findings, there is enormous potential to transform methane emissions into energy for Bitcoin mining, which, in turn, will turbocharge solar and wind-generated electricity at onsite wells. Important research from @skorusARK on #Bitcoin’s potential role in transforming methane emissions into bitcoin mining that will turbocharge electricity generated by solar and wind. @skorusARK https://t.co/6cgxGHNcJZ— Cathie Wood (@CathieDWood) July 26, 2022Annual gas flaring emissions equal 140 billion cubic meters, along with an additional 125 billion cubic meters in annual methane emissions. Therefore, left untouched, this means 265 billion cubic meters of natural gas emissions are wasted yearly. However, an analysis of the methane needed for the current Bitcoin hashrate stands at only 25 billion. While harnessing the entirety of the emissions is impossible due to the oil industry’s preexisting flaring operations investments, capturing methane is a viable and early solution. Ark Invest’s Sam Korus tweeted that over half of all vented methane occurs onsite at wells. This makes the location a prime spot for mining to capture such emissions and productively employ them.Additionally, instead of the methane being vented, it would be able to generate electricity at rates far below what mining companies currently pay. Recently the mining industry has been showing signs of increased energy efficiency and a pivot towards sustainability. Last week the Bitcoin Mining Council released its Q2 review of the network. It revealed the industry’s use of sustainable energy is up 6% from the same quarter in the previous years. In conclusion to their findings, the council referred to Bitcoin mining as “one of the most sustainable industries globally.”However, this has been an active effort to change on the part of the mining industry. Previously, environmentalists shamed the industry due to its unjustifiable carbon footprint. Korus suggests that while there are other ways to harness methane, Bitcoin mining is an ideal option as “It is highly scalable with modular hardware that can be transported to and shifted among operating well sites.”While the new data backs up these claims, they are not new. There are already companies actively doing so. Back in February, Cointelegraph spoke with Kristian Csepcsa, the CMO of Slush Pool, on how miners are aiding oil companies with flare reduction by running their generators on natural gas, which would otherwise be burned off. Nonetheless, there are still skeptics. One Twitter user pointed out that the emissions in question are not naturally occurring. Rather, they are extracted via fossil fuel extraction, which due to climate change, is under pressure to be cut entirely. @skorusARK U seem to be missing the big picture. We aren’t talking about naturally occuring gas emissions, but emissions caused by extracting fossile fuels from the ground, right? This extraction has to stop completely in the next few years @fossiltreaty. That’s the real solution— siegfried.arweave.dev (@ZwigoZwitscher) July 26, 2022
As the industry continues to adapt to global sustainability standards, time will tell if such solutions will bring about the future of Bitcoin mining and energy production.
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On the last day of June, the European Union reached an agreement on how to regulate the crypto-asset industry, giving the green light to Markets in Crypto-Assets (MiCA), the EU’s main legislative proposal to oversee the industry in its 27 member countries. A day earlier, on June 29, lawmakers in the member states of the European Parliament had already passed the Transfer of Funds Regulation (ToFR), which imposes compliance standards on crypto assets to crack down on money laundering risks in the sector. Given this scenario, today we will further explore these two legislations that, due to their broad scope, can serve as a parameter for the other Financial Action Task Force (FATF) members outside of the 27 countries of the EU. As it’s always good to understand not only the results but also the events that led us to the current moment, let’s go back a few years.The relation between the FATF and the newly enacted EU legislationThe Financial Action Task Force is a global intergovernmental organization. Its members include most major nation-states and the EU. The FATF is not a democratically elected body; it is made up of country-appointed representatives. These representatives work to develop recommendations (guidelines) on how countries should formulate Anti-Money Laundering and other financial watchdog policies. Although these so-called recommendations are non-binding, if a member country refuses to implement them, there can be serious diplomatic and financial consequences.Along these lines, the FATF released its first guidelines on crypto assets in a document published in 2015, the same year when countries like Brazil started debating the first bills on cryptocurrencies. This first document from 2015, which mirrored the existing policies of the United States regulator the Financial Crimes Enforcement Network, was reassessed in 2019, and on October 28, 2021, a new document titled “Updated Guidance for a risk-based approach to virtual assets and VASPs” came out containing the current FATF guidelines on virtual assets.Related: FATF includes DeFi in guidance for crypto service providersThis is one of the reasons why the EU, the U.S. and other FATF members are working hard to regulate the crypto market, in addition to the already known reasons such as consumer protection, etc.If we look, for example, at the 29 of 98 jurisdictions whose parliaments have already legislated on the “travel rule,” all have followed the FATF’s recommendations to ensure that service providers involving crypto assets verify and report who their customers are to the monetary authorities.The European digital financial packageMiCA is one of the legislative proposals developed within the framework of the digital finance package launched by the European Commission in 2020. This digital finance package has as its main objective to facilitate the competitiveness and innovation of the financial sector in the European Union, to establish Europe as a global standard setter and to provide consumer protection for digital finance and modern payments.In this context, two legislative proposals — the DLT Pilot Regime and the Markets in Crypto- Assets proposal — were the first tangible actions undertaken within the framework of the European digital finance package. In September 2020, the proposals were adopted by the European Commission, as was the Transfer of Funds Regulation.Related: European ‘MiCA’ regulation on digital assetsSuch legislative initiatives were created in line with the Capital Markets Union, a 2014 initiative that aims to establish a single capital market across the EU in an effort to reduce barriers to macroeconomic benefits. It should be noted that each proposal is only a draft bill that, to come into force, needs to be considered by the 27 member countries of the European Parliament and the Council of the EU.For this reason, on June 29 and June 30, two “interim” agreements on ToFR and MiCA, respectively, were signed by the political negotiation teams of the European Parliament and the Council of the European Union. Such agreements are still provisional, as they need to pass through the EU’s Economic and Monetary Affairs Committee, followed by a plenary vote, before they can enter into force.So, let’s take a look at the main provisions agreed to by the political negotiation teams of the European Parliament and the European Council for the crypto market (cryptocurrencies and asset-backed tokens such as stablecoins).Main “approved” topics of the Transfer of Funds RegulationOn June 29, the political negotiation teams of the European Parliament and the Council of the European Union agreed on provisions of the ToFR on the European continent, also known as the “travel rules.” Such rules detailed specific requirements for crypto asset transfers to be observed between providers such as exchanges, unhosted wallets (such as Ledger and Trezor) and self-hosted wallets (such as MetaMask), filling a major gap in the existing European legislative framework on money laundering.Related: Authorities are looking to close the gap on unhosted walletsAmong what has been approved, following the FATF recommendation line, the main topics are as follows: 1) All crypto asset transfers will have to be linked to a real identity, regardless of value (zero-threshold traceability); 2) service providers involving crypto assets — which the European legislation call Virtual Asset Service Providers, or VASPs — will have to collect information about the issuer and the beneficiary of the transfers they execute; 3) all companies providing crypto-related services in any EU member state will become obliged entities under the existing AML directive; 4) unhosted wallets (i.e., wallets not held in custody by a third party) will be impacted by the rules because VASPs will be required to collect and store information about their customers’ transfers; 5) enhanced compliance measures will also apply when EU crypto asset service providers interact with non-EU entities; 6) regarding data protection, travel rules data will be subject to the robust requirements of the European data protection law, General Data Protection Regulation (GDPR); 7) the European Data Protection Board (EDPB) will be in charge of defining the technical specifications of how GDPR requirements should be applied to the transmission of travel rules data for cryptographic transfers; 8) intermediary VASPs that perform a transfer on behalf of another VASP will be included in the scope and will be required to collect and transmit the information about the initial originator and the beneficiary along the chain.Here, it is important to note that European ToFR seems to have fully followed the recommendation enshrined in FATF Recommendation 16. That is, it is not enough for Virtual Asset Service Providers to share customer data with each other. Due diligence must be performed on the other VASPs with which their customers transact, such as checking whether other VASPs perform Know Your Customer checks and have an Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) policy, or facilitate transactions with high-risk counterparties.Related: European ‘MiCA’ regulation on digital assets: Where do we stand?In addition, this agreement on the ToFR must be approved in parallel by the European Parliament and Council prior to publication in the Official Journal of the EU, and will commence no later than 18 months after it enters into force — without having to wait for the ongoing reform of the AML and counter terrorism directives.Main “approved” points of the Markets in Crypto-AssetsMiCA is the key legislative proposal regulating the crypto sector in Europe, although it is not the only one within the European digital finance package. It is the first regulatory framework for the crypto-active industry on a global scale, as its approval imposes rules to be followed by all 27 member countries of the bloc.Ich bin mir sicher, MiCA ist ein europäischer Erfolg und globaler Standardsetzer. Danke an das Verhandlungsteam @McGuinnessEU /3 pic.twitter.com/bSJh10OY61— Stefan Berger (@DrStefanBerger) June 30, 2022As already mentioned, negotiators from the EU Council, the Commission and the European Parliament, under the French presidency, reached an agreement on the supervision of the Markets in Crypto-Assets (MiCA) proposal during the June 30 political trialogue.The key points approved in this agreement are as follows:Both the European Securities and Market Authority (ESMA) and the European Bank Authority (EBA) will have intervention powers to prohibit or restrict the provision of Virtual Asset Service Providers, as well as the marketing, distribution or sale of crypto assets, in case of a threat to investor protection, market integrity or financial stability.ESMA will also have a significant coordination role to ensure a consistent approach to the supervision of the largest VASPs with a customer base above 15 million.ESMA will be tasked with developing a methodology and sustainability indicators to measure the impact of crypto assets on the climate, as well as classifying the consensus mechanisms used to issue crypto assets, analyzing their energy use and incentive structures. Here, it is important to note that recently, the European Parliament’s Committee on Economic and Monetary Affairs decided to exclude from the MiCA (by 32 votes to 24) proposed legal provision that sought to prohibit, in the 27 EU member countries, the use of cryptocurrencies powered by the “proof-of-work” algorithm.Registration of entities based in third countries, operating in the EU without authorization, will be established by ESMA based on information submitted by competent authorities, third country supervisors or identified by ESMA. Competent authorities will have far-reaching powers against listed entities.Virtual Asset Service Providers will be subject to robust Anti-Money Laundering safeguards.EU VASPs will have to be established and have substantive management in the EU, including a resident director and registered office in the member state where they apply for authorization. There will be robust checks on management, persons with qualifying holdings in the VASP or persons with close ties. Authorization should be refused if AML safeguards are not met.Exchanges will have liability for damages or losses caused to their customers due to hacks or operational failures that they should have avoided. As for cryptocurrencies such as Bitcoin, the brokerage will have to provide a white paper and be liable for any misleading information provided. Here, it is important to know the difference between the types of crypto assets. Both cryptocurrencies and tokens are types of crypto assets, and both are used as a way to store and transact value. The main difference between them is logical: cryptocurrencies represent “embedded” or “native” transfers of value; tokens represent “customizable” or “programmable” transfers of value. A cryptocurrency is a “native” digital asset on a given blockchain that represents a monetary value. You cannot program a cryptocurrency; that is, you cannot change the characteristics of a cryptocurrency, which are determined in its native blockchain. Tokens, on the other hand, are a customizable/programmable digital asset that runs on a second or third generation blockchain that supports more advanced smart contracts such as Ethereum, Tezos, Rostock (RSK) and Solana, among others.VASPs will have to segregate clients’ assets and isolate them. This means that crypto assets will not be affected in the event of a brokerage firm’s insolvency. VASPs will have to give clear warnings to investors about the risk of volatility and losses, in whole or in part, associated with crypto-actives, as well as comply with insider trading disclosure rules. Insider trading and market manipulation are strictly prohibited.Stablecoins have become subject to an even more restrictive set of rules: 1) Issuers of stablecoins will be required to maintain reserves to cover all claims and provide a permanent right of redemption for holders; 2) the reserves will be fully protected in the event of insolvency, which would have made a difference in cases like Terra.First introduced in 2020, the MiCA proposal went through several iterations before reaching this point, with some proposed legislative provisions proving more controversial than others, such as NFTs remaining outside the scope but being able to be reclassified by supervisors on a case-by-case basis. That is, nonfungible tokens have been left out of the new rules — although, in the MiCA settlement discussions, it was pointed out that NFTs may be brought into the scope of the MiCA proposal at a later date.Related: Are NFTs an animal to be regulated? A European approach to decentralization, Part 1In the same vein, DeFi and crypto lending were left out in this MiCA agreement, but a report with possible new legislative proposals will have to be submitted within 18 months of its entry into force.As for stablecoins, a ban on them was considered. But, in the end, the understanding remained that banning or fully limiting the use of stablecoins within the EU would not be consistent with the goals set at the EU level to promote innovation in the financial sector.Final considerationsShortly after the ToFR and MiCA agreements were reported, some criticized the ToFR, pointing out, for example, that while legislators had done their part, the approved origin and recipient identification measures will only reach central bank digital currencies, but not privacy-focused blockchain networks like Monero and Dash.Others have argued for the need for a harmonized and comprehensive framework like the MiCA proposal, which brings regulatory clarity and boundaries for industry players to be able to operate their businesses safely across the various EU member countries.Do you think European policymakers have been able to use this opportunity to build a solid regulatory framework for digital assets that promotes responsible innovation and keeps bad actors at bay? Or do you think that new means of transactions will emerge to impede the traceability of crypto assets with zero threshold? Do you see a need for regulation to prevent the loss of more than $1 trillion in value of the digital asset industry in recent weeks caused by the announced risk of algorithmic stablecoins? Or do you believe that market self-regulation is sufficient?It is true that market adjustment is shaking up many scammers and fraudsters. But unfortunately, it is also hurting millions of small investors and their families. Regardless of positioning, as an industry, the crypto sector needs to be mindful of accountability to users, who can range from sophisticated investors and technologists to those who know little about complex financial instruments.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.Tatiana Revoredo is a founding member of the Oxford Blockchain Foundation and is a strategist in blockchain at Saïd Business School at the University of Oxford. Additionally, she is an expert in blockchain business applications at the Massachusetts Institute of Technology and is the chief strategy officer of The Global Strategy. Tatiana has been invited by the European Parliament to the Intercontinental Blockchain Conference and was invited by the Brazilian parliament to the public hearing on Bill 2303/2015. She is the author of two books: Blockchain: Tudo O Que Você Precisa Saber and Cryptocurrencies in the International Scenario: What Is the Position of Central Banks, Governments and Authorities About Cryptocurrencies?
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The ever-raging debate around Bitcoin’s energy consumption has been re-ignited, with founding member of Ethereum Anthony Donofrio claiming that Bitcoin is using “way too much” energy. According to figures from Digiconomist, Bitcoin (BTC) currently uses 0.82% of the world’s power while Ethereum (ETH) uses 0.34%. Ethereum researcher Justin Drake posted the figures to his 56,000 followers that Donofrio retweeted, stating:If bitcoin is really using nearly 1% of the energy on earth that is way too much for a pet rock. https://t.co/CDL32jk5FF— Texture, PhD (@iamtexture) June 9, 2022Ethereum proponents are attempting to take shots at Bitcoin while simultaneously promoting Ethereum’s upcoming transition to proof-of-stake, Drake added another tweet moments later that read: “Ethereum post-merge: 0.000% of world.”However the validity of the figures are in doubt.Even Drake was forced to acknowledge alternative sources of data in a later tweet which estimated energy consumption figures at nearly 60% lower. Data sourced from Digiconomist, which markets itself as a platform that “exposes the unintended consequences of digital trends,” has drawn criticism from blockchain industry professionals in the past. The most notable of which is fellow Ethereum developer Josh Stark who called out the publication for frequently presenting the worst-case scenario when it comes to blockchain technology.In November last year, Stark published a Twitter thread that questioned the accuracy of Digiconimist’s research methodology. Stark pointed out that almost all of the figures concerning blockchain power consumption were at the “very high end” of any theoretical outcome, especially when compared to more rigorous sources like the University of Cambridge. Where Digiconomist claims that Bitcoin currently consumes 204 terawatt hours (TWh) worth of electricity per year, the University of Cambridge’s Bitcoin Electricity Consumption Index estimates that Bitcoin’s real consumption is much closer to 125 TWh, a 39% difference.Related: Are we misguided about Bitcoin mining’s environmental impacts? Slush Pool CMO Kristian Csepcsar explains.While it may be a well-known fact that Bitcoin’s proof-of-work consensus mechanism is an energy-consuming process, the discussion around just how much power the Bitcoin network actually uses remains a hot-button issue. According to a report from Cointelegraph, putting a specific number on Bitcoin’s actual power consumption can be quite difficult because of the variation in energy sources that power Bitcoin mining globally.As of January this year nearly 60% of global mining operations were reportedly powered by renewable energy sources, and Bitcoin mining operators are rushing to utilize “stranded” natural gas resources that would normally be burned off. Additionally, a report published by CoinShares in January this year found that Bitcoin mining may account for just 0.08% of the world’s total CO2 emissions in 2021.Sam Tabar, chief security officer of Bit Digital, a publicly-traded Bitcoin mining company, told Cointelegraph that the environmental impact of Bitcoin is frequently exaggerated by critics:“The environmental impact of Bitcoin mining is massively exaggerated by critics & traditional financial authorities (IMF, etc.) because they know they can divide a new counterculture movement by using fake environmental arguments. They are trying to gaslight us against each other. They gaslight the world with fake green arguments, and I understand why: They don’t want to lose influence over the levers of power of a system that only works for the elite.”
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Earth Day, a 52-year-old tradition celebrated annually on April 22, provides an opportune moment for the world’s citizens to reflect upon their environmental progress, as well as rally support for political policy-making, cultural climate awareness and individual commitments to sustainability.The emergence of blockchain and Web3 has provided the core architecture for a structural remodeling in public transparency, and as such, a technology that has the potential to be harnessed in service of the visions established by the United Nations Sustainable Development Goals and the Paris Climate Accord.Cointelegraph spoke to a number of environmental experts to gauge their opinions and ideas on how Web3 companies can make positive impacts in the global climate endeavor by utilizing the power of blockchain technology.Sander DiAngelis, the head of growth and partnerships at Toucan Protocol, advocated for an amalgamation of physical and digital initiatives, noting that “tokenized carbon credits” are enabling the creation of “virtual carbon sinks that generate real-world planet-positive impact.”Coinbase’s philanthropic climate program, which allocates 1% of its corporate revenue towards projects seeking to enhance the democratization of cryptocurrency, recently awarded a $500,000 ecosystem grant to Toucan Protocol to build their carbon markets infrastructure.Announcing: @Coinbase Giving x Toucan: Ecosystem Grants for Regenerative Innovation How this looks? Coinbase Giving is granting $500k to Toucan to kickstart our Builder Hub!https://t.co/C63JcKqbFFDetails pic.twitter.com/BG6B5jk7bZ— Toucan Protocol @ETHAmsterdam (@ToucanProtocol) April 20, 2022Projects such as Pachama and Dovu are utilizing artificial intelligence and hash graph technologies, respectively, to calculate, quantify and report carbon footprint data for the purpose of enhancing accountability and transparency within the corporate and Web3 industries.In partnership with action groups such as REDD+, Pachama have established a number of restorative ecosystem projects such as the Colombian coastal deforestation-prevention scheme titled Bajo Calima y Bahía Málaga. Nearing the end of its ten-year term, over 1.2 million metric tonnes of carbon have been sequestered from the environment via credit issuance.Within the crypto space, organizations such as the Climate Chain Coalition and Crypto Climate Accord — both of whom earned the spot of 34th in Cointelegraph’s Top 100 of 2022 list — have made considerable advances in encouraging collaboration, and enacting environmental pledges with the crypto space.Mitch Liu, the CEO of blockchain video streaming platform Theta Network, shared his belief that the cultural significance placed on the climate change crisis could instigate the creation of cutting-edge decentralized solutions.He cited ClimateDAO’s work in “pooling its members’ resources to buy shares in big, polluting companies to make their activities more sustainable from the inside” as a prime example of this innovation. He continued on to say: “As NFTs have entered the mainstream conversation over the past year, the environmental backlash has become fierce. There has been a pernicious assumption that all NFTs are bad for the environment.”Liu says that this blanket assessment “completely ignores Proof of Stake blockchains like Theta, which use 0.05% of the energy compared to chains like Bitcoin and Ethereum.”It’s time to settle it with a poll. Which Metaverse token do you prefer?— Cointelegraph (@Cointelegraph) April 19, 2022
Christian Hasker, Chief marketing officer of Hedera Hashgraph spoke about “striving for a clean Web3” within the distributed ledger technology (DLT) space, emphasizing the industry’s collective obligation to ensure that “We not only have the knowledge and solutions to ensure that the next generation of the internet is sustainable – but crucially, we have a responsibility to do so.”Prior to pledging Hedera’s continued focus on building green applications with the support of their twenty-six council members, he cited the negative perception of Proof-of-Work consensus mechanisms, even those adopting environmentally-friendly principles, stating:“It is my firm belief that carbon neutrality at Layer 1 is the only way to deliver on the promise of a sustainable future built on DLT. The greatest way to preserve energy is to not use it in the first place — a sentiment that is shared by mammoth industries and large organizations which are introducing zero carbon goals.”
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April 22 is Earth Day and with environmental sustainability one of the key topics in the global debate surrounding Bitcoin mining, analysts say the industry has begun to naturally gravitate towards cleaner and cheaper energy sources.According to a January report by the Bitcoin Mining Council, by Q4 2021, the global Bitcoin mining industry ran on an estimated 58.5% renewable energy.The preference for clean energy is due to a combination of environmental conscientiousness, political pressures, and an eye on the bottom line. It’s resulting in a sea change that could have ripple effects that extend well beyond Bitcoin (BTC) mining onto power grid systems around the world.Bitcoin miners in Norway are cleaner than almost anywhere else on the planet thanks to the country’s access to hydropower and other renewables. In fact, 100% of Norway’s electricity is generated from renewable energy. Of Norway’s 157 Terrawatt hours (TWh) of power produced per year, 88% is from hydroelectric, with wind and thermal force making up the remainder. Miners use that renewable energy to produce about 1% of the total Bitcoin hashrate according to data from blockchain research firm CoinShares.Norway contributes about 1% o the total Bitcoin hashrate: CoinSharesMas Nakachi is Managing Director of Miami-based XBTO Group’s Bitcoin mining operation XBTO. Founded in 2015, XBTO’s mining operation takes in upwards of $25 million per year and claims to be completely powered by renewable energy sources. He believes “hydropower is one of the most reliable renewable energy sources available to us.” Wind power depends on the weather and solar power depends on daylight, but rivers can flow all day every day — and in various locales water can be pumped uphill during off peak periods as a way to store excess energy to run generators when needed. Nakachi told Cointelegraph that: “Harnessing hydroelectric power has remained an effective mechanism to maintain the most efficient mining possible.”Whereas a Feb. study published in the Energy Research & Social Science journal concluded “cryptocurrency is unsustainable by design,” Nakachi believes there is a simple path for mining operations to develop both an economically and environmentally sustainable model: “Prioritizing some form of clean energy to power the majority of operations is, in the long term, a sustainable model for successful mining operations.”As reported by Cointelegraph, another option being explored in Texas is the utilization of flexible data centers which can switch from the public grid to temporarily generating its own clean energy from dedicated energy generators to relieve stress on the grid during periods of high retail demand. Related: Marathon Digital moves Montana BTC mine to pursue carbon neutralityTech entrepreneur and self-proclaimed environmentalist Daniel Batten described a multi-pronged way in which the Bitcoin mining industry is creating positive change on the April 22 podcast from Brave New Coin. Batten argued that Bitcoin mining incentivizes building renewable energy plants and helps decarbonize power grids.0/18BREAKING: #BTC Mining can drive us to 70% renewables-based energy consumption by 2030. To say “#BTC mining is good for the environment” is like saying “the sun is warm”: a massive understatement. #BTCmining is our unexpected superhero. Here’s how.https://t.co/Arl1zZXTY6 pic.twitter.com/AleegYAbwM— Daniel Batten (@DSBatten) April 13, 2022Batten believes Bitcoin mining drives increased demand for electricity and therefore investments in renewable energy plants. Mining is suited to intermittent power sources and it can be easily moved to far flung locales to take advantage of excess generation of renewable electricity.The only problem that Batten sees is that the industry may not be big enough to incentivize all the renewable energy required:“My only real concern is ‘Is Bitcoin mining requiring enough electricity to help us build up that grid to the extent we need to?’”
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The Polygon network announced on Tuesday its commitment to going carbon neutral and climate positive this year by releasing their “Green Manifesto: A Smart Contract with Planet Earth.” They also made a $20 million pledge to offset their carbon footprints, and buy extra credits to eventually become carbon negative. #PolygonGoesGreenUnveiling the Green Manifesto – a smart contract with Planet Earth!https://t.co/p9DFtUG9XP [1/2] pic.twitter.com/Xgn8jubffa— Polygon (@0xPolygon) April 12, 2022Part of the Ethereum scaling solution’s plan for a more sustainable future includes providing resources for ecosystem partners who also want to offset their carbon footprint. Additionally, they hope to facilitate NGOs to make donations that go towards fighting climate change.According to the company, the Green Manifesto places freedom “at the center of the Web3 ethos” and climate change as the biggest threat to that liberty. Going carbon neutral means that every NFT minted, token bridged or DeFi trade made on Polygon will be accounted for and its environmental impact is offset. Their long term vision is for the ecosystem to become the first blockchain to be what they call climate positive.Polygon is collaborating with KlimaDAO, an organization of developers that provides on-chain carbon offsetting technology as well as Offsetra that provides Polygon with an analysis tool that gauges the network’s carbon intensity. By analyzing emissions from staking node hardware or bridging activities and the energy consumption from interacting with Ethereum Mainnet, the can better form a management strategy.Polygon also published an emissions analysis that found that 99% of Polygon’s emissions are due to checkpointing and bridging activities that involve transactions on Ethereum Mainnet. Polygon cited a total network emissions of 90,645 tonnes CO2e from February 2021 – February 2022, under companies like Microsoft and Deloitte.Polygon recently raised $450 million in a Sequoia-led funding round and other big blockchain venture funds in order to expand its scaling solutions, which includes Polygon PoS, Polygon Edge and Polygon Avail. According to Polygon’s co-founder Sandeep Nailwal, these scalability and sustainability initiatives are part of their overall strategy to foster mainstream adoption of Web3 applications.
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Bitcoin (BTC) mining in Norway is 100% renewable and “flourishing” according to a report by Arcane Research. “A green oasis of renewable energy,” Norway contributes almost 1% to the global hash rate and is almost entirely powered by hydropower.The report compiled data from the Cambridge Bitcoin Electricity Consumption Index and data from Coinshares to conclude that Norway contributes 0.77% to the Bitcoin total global hashrate. By way of comparison, Norway’s population of 5 million contributes a tenth of that–or 0.07% of the global population.Crucially, according to the Norwegian Water Resources and Energy Directorate (NVE), Norway’s electricity mix is 100% renewable, with 88% hydro and 10% wind. That means Bitcoin miners in Norway are solely using “green” energy.”The most important takeaway for bitcoin miners regarding Norway’s electricity mix is that it’s fully renewable, and will stay like that.”Jaran Mellerud, an analyst for Arcane Research and the author of the report, told Cointelegraph that there will be “huge growth for mining in Northern Norway, where stranded hydropower is abundant, giving miners access to extremely cheap and 100% renewable electricity.”“Heat is very valuable in the cold north, which allows for the repurposing of excess heat from mining operations, which can further benefit both the industry and society.”German company Bluebite has operated data centers in the Norwegian Arctic since 2018. One of its datacentres mines Bitcoin in an area previously known as the “Hell of Lapland” due to its “unpleasant and inhospitable atmosphere,” Conor Davis, CEO of the company told Cointelegraph. Bluebite’s facility in Bodø, Norway (the very far North). Source: NHOThe introduction of Bitcoin mining has rejuvenated the area formerly known for its copper mining industry, as it taps into Norway’s cheap, stranded and renewable resources. Indeed, the land of the midnight sun offers “energy at a cheap price, secondary uses for electricity, 100% sustainable energy, free cooling and it’s an area where people would profit from new jobs,” Davis told Cointelegraph. Bluebite is now investigating whether channeling the heat generated by Bitcoin mining could vertically farm strawberries–or even provide heating to local populations.Nonetheless, Norway’s size and scale mean it’s still “not for everyone” as Norway is small and unattractive to “Chinese investors,” Davis told Cointelegraph. The report suggests that “Norwegian miners are not the biggest,” but Norway remains an attractive country to mine Bitcoin due to its renewable energy credentials and the wealth of interesting and innovative secondary uses for the heat generated by Bitcoin mining. Timber waiting to be dried by Bitcoin miner ‘waste’ heat at Kryptovault’s mining facility. Source: KryptovaultA growing trend, Bitcoiners around the world and finding fresh ways to use the ‘waste’ heat from Bitcoin mining. One Bitcoiner is heating his campervan with an S9, while a Dutch company is growing Bitcoin flowers thanks to Satoshi’s invention.Related: Crypto ownership among Norwegian women doubles, mirroring global trendsThe CEO of Kryptovault, Kjetil Hove Pettersen told Cointelegraph that they plan to “get started with seaweed operations” to complement their existing timber-drying operations thanks to Bitcoin miner heat. Currently, “99% of our electric energy turns into thermal energy” ideal for secondary uses, Pettersen explained.The rather idyllic, 100% renewable Kryptovault facility in Hønefoss. Source: kretslopet.noPettersen agrees with Davis in that while “you need strong nerves and faith in this space to persevere when times are tough,” Norway is an “ideal” location for Bitcoin mining. A final benefit to Bitcoin mining in Norway is that the Scandinavian country has:“Higher production than consumption and very limited capacity to transfer that excess energy to other regions such as mainland Europe.”
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Next time someone tries to poo-poo the renewable credentials of Bitcoin (BTC) mining, remember AmityAge Mining Farm. Founded by Gabriel Kozak and Dušan Matuska, the Bitcoin mining facility uses human and animal waste to generate electricity for mining.Matuska, the man “who met Satoshi Nakomoto”, told Cointelegraph that “methane from biodegradation processes runs our machines.” As human and animal waste isn’t running out any time soon, their BTC mining process is both environmentally friendly and renewable. Matuska and his colleague rigging up the Bitcoin miners in the plant. Source: Dušan MatuskaAccording to Matuska, using renewable energies such as biogas “shows that we can really accelerate the adoption of these renewables and make their return on investment higher in the end,” while also being a cheap source of energy. An ecologically sound and low-cost way of generating electricity, biogas electricity plants convert waste into methane gas due to a fermentation process. The gas is then burned as fuel. A steaming hot delivery of unmined Bitcoin, ready for energy transfer. Source: Matuska Matt Lohstroh, Co-founder of Giga Energy, a natural gas Bitcoin miner in Texas, told Cointelegraph that “finding cheap energy [for Bitcoin mining] quickly is the largest issue. All the low-hanging fruit is being plucked away.” Matuska added that “the situation with energy in Europe changed dramatically in November with a huge price increasing together with a conflict around the corner.” As Lohstroh alludes, turning a profit with Bitcoin mining can be tricky, which keeps Matuska both “busy and worried.”However, an eternal optimist, Matuska also told Cointelegraph:“The most exciting part [about Bitcoin mining] is knowing that we are like ‘Bitcoin security guys,’ helping just a little with our hashrate. We are still helping to protect the network.”Matuska adds that the overall environmental “footprint is pretty low” for their plant and that one of the excesses is “mostly excessive heat.”Matuska a “Bitcoin Security Guy” in front of the biogas facility. Source: MatuskaIf he is looking for ideas for the excessive heat, look no further than the creative Bitcoin mining community which uses Bitcoin mining heat to warm campervans, grow flowers in the Netherlands and dry out timber from logging in Norway. Matuska “definitely” recommends that more and more curious Bitcoiners get into Bitcoin mining: “You can gain a lot of useful knowledge while setting up your first miner. No need to earn a lot but the experience is worth a fortune.”Related: ‘How I met Satoshi’: The mission to teach 100M people about Bitcoin by 2030For those interested in getting into Bitcoin mining at home, while the process used to be complicated and costly, solo mining is making a come back. Compass Mining, the pioneers of Bitcoin mining at home, launched direct-to-consumer hardware sales in late 2021. The CEO of Compass, Whit Gibbs, told Cointelegraph that Bitcoin miners are some of the biggest Bitcoin bills. He illustrates the point, “you could buy $10,000 worth of bitcoin or you can buy an ASIC (Bitcoin mining machine),” knowing full well that it should return the initial investment over a “12 to 14-month” period. He concludes:“You have to be bullish on Bitcoin to believe that you’re going to see that return in a timely manner as opposed to just buying that amount of Bitcoin outright.”
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Last week, Bitcoin (BTC) dodged a regulatory bullet in the European Union when proposed cryptocurrency legislation was altered to not include a ban on proof-of-work- (PoW)-based crypto assets. Policymakers had raised a number of concerns about the relative anonymity of crypto transactions and their environmental impact. Some experts including Tim Frost, founder and CEO of Yield App, believe that the “climate change” angle reflects a hidden attempt to ban Bitcoin. But, why? The proposed EU regulation on Markets in Crypto Assets (MiCA) can be seen as a hybrid approach, which sometimes treats crypto assets as securities and at other times treats them as currency. This has left legislators divided, as the European Council, composed of representatives of the respective countries, believes the European Banking Authority (EBA) should be the new crypto watchdog, while the European Parliament would hand that role to the European Securities and Markets Authority (ESMA).Green protectionism and green deals While an outright ban on proof-of-work, which would have hobbled Bitcoin, has been avoided, the environmental rhetoric surrounding the EU push for regulation remains. This reflects a trend towards “green protectionism” in EU regulation: The EU is attempting to protect its market and institutions (in this case, its currency, which is less than a decade older than BTC) using environmental concerns as a rallying cry. This approach has already attracted the ire of the EU’s trade partners. In 2019, shortly after European Commission President Ursula von der Leyen assumed office, the EU officially declared its “Green Deal” goal of having net-zero greenhouse gas emissions by 2050. This followed a wave of greens winning in the European Parliament earlier that year. The idea of a “Green Deal” had originally been promoted by the United States Democratic Party but was opposed by former President Donald Trump, which prompted Europeans to borrow the concept. The EU intends to pursue this goal by shifting to renewable energy sources for electricity generation, increasing housing energy efficiency and creating “smart infrastructure.” The price tag for the program was set as one trillion euros in the first decade. According to the Valdai Club, “The symbolic significance is as follows: the EU declares itself a global leader in promoting the climate agenda and sets new standards for cooperation between the state, business and society in countering climate change.”Green — with envy? Bitcoin vs. euroThe European banking system has faced several major crises since the introduction of the euro as a common currency within the eurozone in 1999, notably the financial crisis in 2008, the 2011 euro sovereign debt crisis and the COVID crisis. Pervasive problems such as negative inflation and difficulties in coordinating monetary policy have often left the bloc relying on several stronger economies such as Germany to bail out weaker states such as Portugal, Italy, Greece and Spain in times of need. This has elicited questions about the long-term sustainability of the currency.To make matters worse, austerity mandates have often empowered populist politicians such as Italy’s Five Star party to threaten withdrawal from the euro bloc. This has weakened Brussels’ aspirations to sell the euro as an alternative “world reserve currency” to the U.S. dollar. While trade in euros dwarfs the global volume of cryptocurrency transactions by several orders of magnitude, it’s understandable that eurocrats would want to avoid competition with a liquid medium of exchange. Europe’s financial targetsAccording to Tim Frost, founder and CEO of fintech firm Yield App, “there has been little work undertaken to truly understand the actual environmental impact of mining cryptocurrencies, not least compared to the oil and gas industry that the EU and other global governments are still very happy to support through kickbacks and incentives.” He adds that “if regulators were seriously concerned about the environmental impact of industries, then cryptocurrency would surely be the last industry to be considered.” Frost voiced suspicion about singling out of cryptocurrency in the environmental debate, which he said was “somewhat lopsided, if not suspicious,” given that the proof-of-work system originally targeted by legislators was an essential part of the architecture of Bitcoin, which accounts for the lion’s share of the cryptocurrency economy.It can be said, however, that both the euro and cryptocurrency possess a unique set of political risks in that they are not tied to traditional states engaging in traditional monetary policy. EU regulators have already been accused of trying to “punish” the United Kingdom for Brexit as a warning sign to other potential leavers, so it’s not unfair to argue that attempts to hobble crypto could be driven more by self-interest than by environmental notions. Brussels as an exporter of regulatory standards Setting new rules involving trade is also seen as a win for European lawmakers in and of itself. During Donald Trump’s time in office, many opined that the U.S. could no longer be seen as “the leader of the free world” in terms of policy initiatives and was focusing on “America first.”The United States, in the eyes of Europeans, had turned its back on global regulatory initiatives. The most poignant reflection of this was Washington D.C.’s decision to pull out of the Paris Agreement on climate change. Trump’s backtracking on the Iran deal was another indicator that the U.S. had switched to favoring unilateral policymaking and was willing to “weaponize” its role in the global economy as well as that of the dollar.This left the EU with a window of opportunity to take a leadership role. While international formats such as the G-20 and Organization for Economic Co-operation and Development (OECD) had larger aggregate economies, they lacked the EU’s expertise as a consensus-based supranational union capable of establishing and maintaining standards. In the late 1990s, when the internet and global banking were first coming into their own, the OECD had taken the lead in introducing new global regulations to prevent companies from utilizing low-tax jurisdictions. In 2000, the OECD introduced a “blacklist” of uncooperative tax havens and identified 31 such jurisdictions by 2002. At the time, the OECD countries accounted for the lion’s share of the global economy. These were able to force all of them to implement its standards of transparency and exchange of information.Taken together, these forces underlie what on the surface looks as the push to emphasize environmental concerns the EU’s emerging crypto regulation
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