Despite heavy emissions due to some parts of the industry, not all crypto mining efforts have such a large carbon footprint, even if they use proof of work. Mining can rely on solar, wind, hydroelectric and geothermal renewable energy systems. To discourage carbon-intensive crypto mining operations, New York legislators have proposed a moratorium to partially limit cryptocurrency mining operations that use proof of work authentication methods to validate blockchain transactions. . The moratorium will not apply to mining operations using renewable energy.
The Paris climate accord’s Net Zero 2050 goal is ushering in an era of self-checking, as industries scrutinize their industrial processes and carbon footprints. One way to do this is to evaluate the cradle for critical lifecycle evaluation of crypto transactions. Sometimes referred to as an environmental lifecycle analysis (e-LCA), this framework provides an inventory of a product’s environmental footprint and a structure for conducting the assessment.
Moving towards lifecycle assessment will also help companies in preparing data driven ESG statements. As ESG standards guide investors to green products and services, more industries, including crypto companies, will self-analyze their own carbon footprint and environmental lifecycle. And good actors will be motivated to assess and broadcast their virtuous carbon-free lifecycle.
Although most environmental lifecycle-related disclosures are currently voluntary, this may change. The United States Securities and Exchange Commission (SEC) has proposed rules for registrant companies to hold Scope 1, 2, and 3 emissions inventory. If these proposed regulations become law, publicly traded cryptocurrencies will be subject to their life cycle emissions from direct operations (Scope 1), electricity purchases (Scope 2), and indirect upstream and downstream activities (Scope 3) emissions. intensity needs to be understood.
Crypto mining as a catalyst for renewable energy projects
While there is always the fear that conducting an environmental assessment may reveal “inconvenient details”, it also represents a unique opportunity.
Crypto mining companies are often located near power sources to feed their power-hungry computers. As a result, crypto mining can be a catalyst or market driver for new renewable energy projects. For example, Digital Power Optimization in New York now runs 400 mining computers from excess electricity produced by a hydroelectric dam in Hatfield, Wisconsin. There are many remote geographic regions where the energy demand market is not sufficient to support a utility-scale renewable energy site.
It is this symbiosis of crypto computer farms and remote green energy projects that offers the potential for mutual benefit – and it cannot stop with rural projects.
Many cryptocurrency stakeholders and enthusiasts expect the DeFi market to expand its reach to near space, the Moon, and beyond – and that idea is not far from being realized. Already being considered for a range of distributed ledger technologies space domain,
A multi-signature bitcoin transaction has been demonstrated aboard the International Space Station. Other companies are moving forward with a variety of space applications, including fundraising, smart contracts, autonomous satellite communications and blockchain applications, to manage a range of satellite assets in a decentralized and accountable manner.
Perhaps one day in the future a space-based solar power plant could generate several gigawatts of clean energy and power a range of blockchain applications in space.
Several countries, including China, India and the UK, are seriously considering space-based solar power. As the world seeks decentralized, accountable and carbon-free technological solutions, it is this type of cooperative partnership between clean energy providers and blockchain applications that can answer the call.