(Sponsored) The finance world is undergoing a huge transformation driven by environmental awareness and the rise of technologies, including cryptocurrencies.
Sustainability has become an imperative aspect for investors and businesses alike, as social inequality, climate change and corporate responsibility are hot topics at the moment.
In this context, crypto investors seek new opportunities to align with the new values.
Cryptocurrencies are responsible for considerable energy consumption due to the mining process.
In order to minimize the carbon footprint, plenty of digital assets have tried to offer new solutions that will make the crypto space greener.
Ethereum has succeeded with this fact, achieving a huge reduction in energy usage.
This transformation made Ethereum greener and more popular, gathering the attention of investors, who are more interested in how to buy ETH.
Let’s see how the crypto space deals with sustainability and what steps could make this industry more eco-friendly.
The bad impact of crypto on the environment
Worldwide, there are more than 15,000 cryptocurrencies, and they present a huge energy consumption problem.
The units of digital assets are produced with the help of an energy-intensive mining process.
This process involves using a proof-of-work consensus mechanism for validating transactions, mining new cryptos and preventing fraud.
Bitcoin still uses a PoW consensus mechanism, designed to be energy-intensive to avoid security breaches.
But this comes at a price, as mining is responsible for much of the global electricity consumption.
For example, Bitcoin alone consumes 127 terawatt-hours a year, more than the total energy consumption of several countries, including Norway.
This is not appealing to consumers who gravitate more towards friendly initiatives. So, the crypto space must become greener to achieve a safe future climate.
Ethereum’s environmental journey: How it went through high emissions to very sustainable practices
Before a software update in 2022, Ethereum presented a concern about its environmental impact, as it used a PoW consensus mechanism.
However, a new journey began with the Ethereum Merge, launched in September 2022, which led to a drastic 99 % reduction in the energy use of Ethereum.
Before the upgrade, Ethereum was responsible for greenhouse gas emissions of approximately 22.5 million tons of carbon dioxide from its inception until The Merge was made.
After the update, Ethereum’s annual emissions have changed drastically to just 2.8 kilo tons of CO2 equivalent.
This massive reduction is a testament to Ethereum’s commitment to environmental sustainability.
With this change, Ethereum proved that ecological responsibility and blockchain technology coexist.
How can sustainability and crypto work together?
Sustainability can start with smart technology
Changing towards a more sustainable crypto mining doesn’t need to be difficult. Numerous technologies can be used to lay the path towards sustainability.
In the same way as smart lighting systems and smart thermostats can be used to keep track of excess energy usage in our houses, technology could help reduce waste in the mining process.
Instead of moving toward an undefined, big and intimidating goal of sustainability, smart tech could help in achieving sustainability goals much easier.
In this way, crypto users can see how much energy they have used and if it is above or below the amount they want to achieve.
Proof of Stake systems are the key to a global change
Many important digital coins use proof of work to validate transactions. This method involves solving complex puzzles and competing against the other users to complete the mathematical problems faster.
This process is called mining, and although it represented a good alternative at first, now is not the most feasible option, as it is highly energy intensive.
Ethereum is the second largest cryptocurrency by market cap, which realized that people want more sustainable choices, and this is why it transitioned to a proof of stake consensus mechanism.
In this way, Ethereum led the way toward a change in the crypto industry.
In the PoS systems, users will still get tokens as rewards, but instead of working on the same complex puzzles for hours in a row, validators have to put up a small amount of their virtual coin at stake for a chance of getting selected, as validators are chosen randomly.
This method eliminates fraudulent transactions, and validators will not need to go through the energy-intensive competitive mining environment.
Renewable energy could lower carbon emissions
The crypto industry could improve sustainability by embracing renewable energy. Validators and traders could move towards wind or solar energy or other green options rather than continuing to use fossil fuels.
Although adopting renewable energy could increase the cost of mining, this option is very likely to become a practical solution that will be widely adopted worldwide.
Carbon offsets can be an immediate alternative
The crypto industry could make a quick difference if they consider offsetting their carbon emissions.
Transitioning to renewable energy systems and proof of stake could take some time and money, but carbon-offsetting projects such as landfill management and tree planting projects could have an immediate effect.
With the help of these projects, anyone in the crypto sphere could create a greener world and reduce their carbon footprint.
Currently, some eco-friendly digital assets reward users for their sustainable actions. For instance, Solarcoin gives rewards to solar energy generators, and Bitgreen rewards users for volunteering and carpooling.
Last words
Ethereum’s massive reduction in energy consumption is an important milestone in the crypto journey toward more sustainable practices.
This achievement can change the perception of how blockchain technology impacts the environment and offer the needed inspiration for other digital assets to follow as well.
The world is increasing its focus on greener practices, and Ethereum’s upgrade shows that technological innovations can align with sustainable practices.
Although the crypto sector is criticized for its huge energy consumption, now this industry has a shining example of balancing planet-friendly practices with technological progress.
Ethereum’s story is more than just a reduction in emissions; it represents a new standard for a more sustainable future.