Carbon Grid Protocol – Decarbonizing Blockchain

The numbers are staggering. And the Bitcoin maximalists think theirs is the future. Bitcoin’s power consumption is extremely high compared to conventional and digital payment methods. One single transaction now uses as much energy as a household in a week.

This is an unsustainable trajectory. It simply can’t continue.

Don’t come with the old counter-argument that even minting cash and mining gold leave a huge carbon footprint. We have the chance to move ahead and create a better world by getting rid of the past’s deficiencies. But not with Bitcoin.

If we compare the extreme spectrum from full decentralization to highly centralized organizations, you’ll see stark differences in the carbon footprint. A single Bitcoin transaction causes CO2 emissions of 300 kilograms (!). An Ethereum transaction results in about 25-35 kilograms of CO2 footprint. Compare this to Visa Card’s 8 grams of CO2 per transaction, or Google’s 5 grams of CO2 per search, etc.

Centralized organizations are not free of carbon footprint, just lesser per transaction. However, with the sheer volume that they process on a daily basis, it adds up.

Similarly, for premined digital tokens such as XRP, it is important to understand at which end of the spectrum of decentralization and centralization they falls under. Of course some still argue XRP is a centralized digital currency controlled by one company. Don’t mix up centralization with efficiency.

XRP is highly efficient in its energy usage, and by this much less different from any other centralized organization out there than some blockchain communities who are trying to achieve “full” decentralization.

Of course talking about Bitcoin and full decentralization is an oxymoron. The token is controlled by miners, end of discussion.

And talking about Visa and Google, while they do not engage in proof-of-work (POW) type of mining, their digital infrastructures still create carbon footprint, and what is their approach in managing their carbon footprint.

Historically, human progress and innovation have always come at the expense of the environment. The benefits of decentralization and the ideas of it can be impactful, but we cannot run away from the fact that the more decentralized, the more inefficient in energy usage and the higher its impact on the environment. We are starting to see hybrids of blockchain solutions appearing in the market, usually a mix between decentralization and centralization.

Proof-of-stake (POS) is a good move away from POW, and is definitely more energy efficient. It allows some form of decentralisation, where holders of the tokens from anywhere in the world get to mine it, instead of depending on a network of nodes to work on one transaction where only one gets rewarded.

But critics will say it is no longer a true sense of decentralization as it creates a scenario where “the rich gets richer.” Similarly, some blockchain companies have developed a proof-of-authority (POA) model, where they assign authority nodes to facilitate transactions, increasing the efficiency of it. Again, critics will often question the selection of authority nodes and how it can be rigged to begin with.

Blockchain technology is still in its early stages, and it remains to be seen whether we ca be more efficient in a fully decentralized model. As more and more companies and enterprises will gradually adopt the blockchain, inefficiencies and emission impacts will inherently become more significant and not go away in any foreseeable future.

Now there is a new kid on the block to solve this issue: a Singapore-based startup tackling the important energy consumption issues surrounding blockchain technology with its affordable and scalable Carbon Grid Protocol.

Their mission is to decarbonize blockchain. By introducing and increasing market access to tradable carbon credits, blockchain networks and decentralized apps will be rewarded for offsetting their carbon footprints, thus helping to reverse the negative environmental impact of cryptocurrency transactions.

Carbon Grid Protocol is blockchain agnostic, meaning it operates and complements projects built on all existing blockchains in the market, allowing for greater adoption of carbon credits.

Carbon Grid Protocol is the first Asian member of the U.N.-sponsored Climate Chain Alliance, which includes a number of world-leading carbon blockchain projects.

Ultimately, Carbon Grid Protocol recognizes the potential for the rising blockchain-enabled world to combat climate change, and it has designed the economic framework to do just that.

It does not matter if it is a fully decentralized, a hybrid or even a fully centralized company, the carbon footprint will be present. For now, Carbon Grid Protocol connects the digital world with real-world carbon emission offset.

Otherwise? It’s certain that the increasing energy burden of Bitcoin transactions will divert progress from electrifying the world and reducing global carbon emissions. Bitcoin, symbol of the opposite of progress. The only question at this point is: by how much.