The crypto climate deal treads a fine line between self-interest and the common good – Op-Ed Bitcoin News

As the focus returns to the environmental impact of blockchain technologies, support for the crypto climate agreement comes from curious corners of the industry and raises questions about the motives of its signatories.

The authenticity of the support from CCA remains controversial

With concerns about the environmental impact of blockchain drawing a lot of attention, the alarms have gotten so loud that crypto mining was the hottest topic of discussion during this year’s UN World Environment Day.

This reflected increased support for natural ecosystem restoration initiatives proposed by several prominent figures and environmentally conscious investors. For example, this year’s crash of the crypto market began in mid-May when Elon Musk suddenly tweeted that Tesla would not accept Bitcoin as a means of payment due to “environmental concerns”.

While blockchain is a powerful and transformative technology that can support real-world cases in a growing number of sectors, its energy footprint is cause for concern. Blockchains based on the Proof-of-Work (PoW) consensus mechanism require high-performance computers that consume immense amounts of electricity, resulting in inefficiency, non-renewable resources and significant electronic waste.

To improve the carbon footprint of cryptocurrency mining, a newly announced Crypto Climate Accord (CCA) is addressing the challenge of converting all blockchains to renewable energies by 2030 or earlier and eliminating greenhouse gas emissions by 2040. Led by private organizations active within the blockchain and fintech industries, the Accord aims to build a sustainable crypto ecosystem with the support of the UN Framework Convention on Climate Change.

So far, the deal has received support from a number of influential names, including crypto company Ripple, blockchain software technology developer Consensys, billionaire climate activist Tom Steyer, and United Nations “climate champions”.

But at this point where the planet is filled with CO2 emissions, do billionaires and industrial evangelists suddenly regain the conscience to restore the planet’s ecosystem and act for the common good? Or is that just a gimmick to stifle criticism and deliver good PR?

Self-promotion parading as environmental activism

“Green” investors and corporations might finally wake up to solve the problem at hand, but it could also be more about signaling virtue and reaching out to the masses.

The most critical aspect to consider is that CCA is a privately run initiative with no government support, which leaves critics doubting that a self-regulated deal could be as effective as government policies to reduce the carbon footprint of crypto.

Take Ripple’s involvement in the deal and how it benefits from the green crypto initiative. Ripple naturally uses the less energy-intensive Proof-of-Stake (PoS) consensus protocol, which means that it already has minimal impact compared to PoW networks. As more and more blockchains are already opting for the PoS consensus protocol over the PoW protocol, this means that crypto’s energy footprint will automatically decrease over time.

Given that almost all of the signatories are either already using green energy or are focused on energy efficiency, this deal feels more like selfish activism than just influencing industry change. As such, the promulgations of the deal may feel more like a pat on the back than a serious warning to the top polluters in the industry. How can this group with no teeth or enforcement tackle the more important problem?

Institutional investors, VC firms, and angel investors are already realizing that PoS-based applications are gaining the upper hand, and they have already invested billions in future dApps and protocols. Why are these very organizations the only supporters of the CCA? Could the support consist of marketing your competitive advantages and attracting more users to your platform through a “greener” approach?

With the noose around the PoW protocol already tightening due to its environmental impact, many voices in support of green cryptos seem to fall into the conflicting category of self-interest and selfishness. Given the incentives and money at stake in the industry, especially as networks compete for more users and adoption, this latest attempt at self-regulation feels a little insincere.

If money was not involved or at stake, the initiative could take on a different look and feel. However, given the “win-take-all” attitude prevalent in today’s crypto climate, the CCA might only be the benefit companies deem necessary to take them to a perceived higher moral level, despite real environmental concerns affecting the industry got to.

Do you think that CCA’s business is environmentally conscious or that it is self-promotion by the companies on board? Let us know in the comment section below.

Photo credits: Shutterstock, Pixabay, Wiki Commons, The Verge

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