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Zumo releases cross-sector report on decarbonising the crypto industry

Crypto wallet and payments platform, Zumo, last week announced the release of a new report ‘Decarbonising Crypto: A state of play’. The report is a cross-sector effort to explore the carbon footprint of cryptocurrencies and the task of decarbonisation. It also explores the complexities of decarbonisation and how the perception of cryptocurrencies’ environmental impact compares to other sectors such as traditional finance.

‘Decarbonising Crypto: A state of play’ includes input from leading sustainability researchers and cryptocurrency experts including Energy Web, Cambridge University Centre for Alternative Finance, The Green Bitcoin Project, The Digiconomist and TAAL Distributed Information Technologies. These organisations participated in a Zumo roundtable event held in September that was the foundation for this paper. Key findings and recommendations contained in the report include:

  • Urgent progress is needed towards decarbonisation of the sector, but the data/research that currently exists is not widely understood, and can be taken out of context
  • The carbon footprint of crypto is a partisan and highly emotive issue, and this has often obscured the path to open and reasoned debate
  • Decarbonising crypto is a collective responsibility, which requires collaboration across the crypto ecosystem, encompassing miners, exchanges and holders
  • Technologically speaking, crypto can be decarbonised relatively easily. Cryptocurrency has key advantages of transparency and comparative simplicity, which makes it a prime candidate for rapid decarbonisation. By comparison, the carbon footprint of other sectors such as traditional finance consist of many more elements and are harder to decipher. A recent WWF/Greenpeace report has shown the financed emissions of UK financial institutions to be almost double the UK’s net emissions
  • For society to fully accept and adopt the benefits of crypto, the industry needs to become relatable to the public and demonstrate its utility/value to a wider audience
  • New blockchain technology could transform the perception of cryptocurrencies and significantly reduce energy consumption. A prime example is Ethereum pivoting from a proof-of-work to proof-of-stake model

Kirsteen Harrison, Environmental and Sustainability Adviser, Zumo, said:

“We are only just beginning to understand the blockchain’s potential impact – both good and bad.  ”The current narrative that ‘crypto is harmful to the environment’ is too simplistic and masks a much more complex reality. It doesn’t do justice to the variety of cryptocurrencies that exist, the mechanisms used to create them, or the benefits that crypto can bring to society.

“Meaningful progress on the vital challenge of decarbonisation will only be achieved through collaboration, collective action and open dialogue. The industry also needs to get far better at communicating the real-world value of cryptocurrencies. As a sector, we have the potential to make rapid progress towards decarbonisation, and at Zumo we are excited to be advancing the objectives of Crypto Climate Accord (CCA) to make this a reality. ”

 

Alex De Vries, Digiconomist founder, added: 

“Decarbonization in the crypto industry is primarily a Bitcoin Ethereum issue. The impact these two have reflects poorly on the rest of the cryptocurrency landscape even though many communities have already done their part in addressing the issue by running more sustainable algorithms.”

 

Doug Miller, Global Markets Lead, Energy Web said:

“Zumo is providing valuable insights to the CCA community about how a crypto exchange can evaluate the energy use of its crypto holdings and transactions and then use this estimate to build a renewables procurement strategy. We are excited for Zumo to provide a real-world example of implementing a green crypto exchange with Energy Web’s open-source decentralized technologies.”

 

Sergey Shayakhmetov, Co-Founder, Green Bitcoin Project, concluded:

“Due to the high energy consumption of bitcoin and the rapidly growing disquiet of institutional investors surrounding its environmentally unfriendly production, our initiative is geared towards encouraging a “greener” Bitcoin. The ‘Green Bitcoin Project’ provides fully transparent purchasing of renewable energy certificates (REC) to manage and track energy consumed from renewable power sources. RECs are legal proof that energy has been generated from renewable electricity sources like solar or wind power.”

 

Lars Jorgensen, Chief Operating Officer, TAAL Distributed Information Technologies, said:  

“Transaction processors should take an active role in reducing the carbon footprint of crypto currencies – therefore TAAL is committed to the BSV blockchain where scalability equals sustainability. Auditors at MNP recently conducted a study comparing blockchains’ impact on the environment and found BSV to be easily the most energy efficient amongst its competitors.”

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