Over the last few years, blockchain networks have received tremendous flak for their massive energy consumption levels. For instance, the world’s largest cryptocurrency by market cap, Bitcoin, currently consumes 110 terawatt-hours per year — that’s at par with small countries like Malaysia or Sweden — resulting in massive carbon emissions.
Fortunately, growing concerns among developers and investors regarding this issue have led to the development of several eco-friendly crypto projects and initiatives. In this article, we will highlight some of the green crypto networks from 2022 and how they can impact the future of blockchain and our environment.
Post-merge Ethereum
Earlier this year, Ethereum switched from the proof-of-work (PoW) consensus algorithm to the proof-of-stake (PoS) algorithm through a process known as The Merge. The PoW algorithm requires miners to perform complex computational tasks to validate transactions and create new blocks on the blockchain. This process consumes a significant amount of energy, which can be highly detrimental to the environment.
PoS algorithms, on the other hand, do not employ such energy-intensive processes, and instead, require users to "stake" their tokens as collateral to validate transactions. This can significantly reduce energy consumption levels and minimise the network’s carbon footprint.
The Merge was one of the most coveted events in blockchain history and was successfully conducted on September 15 without glitches or hindrances. Due to this upgrade, Ethereum, one of the busiest blockchains in the world, reduced its energy consumption by 99.95 percent.
Polygon and its carbon-neutral mission
Polygon runs on a proof-of-stake consensus mechanism, making it quite environmentally friendly, to begin with. Moreover, it is a layer-2 blockchain built on the Ethereum network. Therefore, its carbon footprint would have also reduced significantly after the Ethereum Merge.
In fact, the Crypto Carbon Ratings Institute (CCRI) indicated that Polygon’s annual carbon emissions dropped to 56.22 tonnes of carbon dioxide equivalent (tCO2e) post the Ethereum Merge. That’s a massive 99.92 percent reduction from its pre-merge annual emissions of 94,782 tCO2e.
In addition, the blockchain also launched a mission to become carbon neutral by the end of 2022. The initiative was announced in April this year, with the blockchain setting aside $20 million to offset its carbon footprint.
These efforts paid dividends as Polygon reached carbon neutrality in June, successfully retiring $400,000 worth of carbon credits. Through the move, Polygon effectively offset 104,794 tonnes of greenhouse gasses, the network’s entire CO2 debt since inception. The network has also partnered with KlimaDAO and Offsetra to analyse its emissions and create better carbon management systems. Finally, Polygon also plans to aid environmentally-focused NGOs in its effort to become the first climate-positive blockchain in the world.
Algorand — the world’s first carbon-negative blockchain
Algorand was always kind to the planet. The network touts itself as the world’s first carbon-negative blockchain and was developed to have a minimal impact on the environment. For instance, it employs a unique pure proof-of-stake (PPoS) consensus mechanism that results in 120 million times less CO2 emissions than Bitcoin for every transaction initiated and digital asset created.
In April this year, it also implemented the first “green” smart contract that will automatically set aside a percentage of every transaction fee to offset its carbon emissions. In addition, the network also employs a "verifiable random function" (VRF) to randomly select the validators who will create new blocks. This ensures that the network is secure and decentralised without requiring a large amount of computational power.
It also uses a "relay-based" architecture, which allows transactions to be processed off-chain and reduces the load (and energy consumption) on the main blockchain. Overall, the combination of its PPoS consensus algorithm and these additional features make Algorand an energy-efficient blockchain platform.
Solana, another carbon-neutral blockchain
In Jan this year, the CCRI released a report stating that Solana was the most energy-efficient PoS network amongst Ethereum-killers, Cardano, Polkadot, Avalanche, Algorand and Tezos. As per the CCRI study, Solana uses 0.166 watt-hours (Wh) of electricity per transaction, equivalent to the energy consumption of two Google searches, while also being much lower than Bitcoin’s 1,722.24 kWh per transaction.
Moreover, the blockchain also has several environmental initiatives in place to reduce the effect of greenhouse gasses on the planet. For instance, in December 2021, the blockchain announced that it would be funding a process called refrigerant destruction. This would result in the permanent destruction of CFC and HFC refrigerants throughout 2022. These greenhouse gasses are 10,000 times more potent than CO2.
The blockchain also publishes quarterly reports that detail the network’s energy consumption and the measures it plans to implement in the future. In its last Energy Use Report, Solana announced two new initiatives to lower energy consumption: Compressed NFTs and the doubling of transaction size.
Compressed NFTs allow up to 10 NFTs to be minted at once, thereby reducing energy consumption. On the other hand, doubling the transaction size will result in less computing power used for a given set of transactions.
Tron — a network that uses 99.99 percent less energy than BTC and ETH
In August, the CCRI published a report highlighting TRON as one of the most eco-friendly blockchains in the world. According to the report, the network consumed only 162,868 kWh of power in 2021, that’s 99.9 percent less than Bitcoin and Ethereum. One of the main reasons for this is Tron’s delegated proof-of-stake (DPoS) consensus algorithm, which is considered more energy efficient than proof-of-work (PoW) algorithms.
Conclusion
Blockchain and crypto projects are growing increasingly conscious of their environmental impact. This has driven several networks to implement green initiatives and look for ways to cut down on their carbon footprint. Hopefully, these developments will help blockchains and cryptocurrencies shrug off the “environmentally harmful” tag that they have gained over the years.
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