8/8/2023 0 Comments Crypto carbon credits![]() ![]() If its carbon footprint exceeds the quota, the company must buy extra credits to make up for that. The way it works is that a company has a quota of how much greenhouse gas emissions it can use, measured in carbon credits. The carbon credit system has been established with the goal to help businesses and countries to manage and reduce their carbon footprint. ![]() This is one application of blockchain technology that is fairly straightforward to implement even today. So with that out of the way, let’s now look at how the power of blockchain can be harnessed for the benefit of a more sustainable future. This is important because Ethereum is by far the largest platform for smart contracts and dApps, which makes it the preferred platform for building Web3 solutions. Following the Merge, the energy consumption of the Ethereum network decreased by over 99%. Last year’s Ethereum Merge, the biggest event in the Web3 space of the past few years, was in part a response to that criticism.The Merge finalized Ethereum’s transition from the energy-intensive Proof-of-Work consensus mechanism to the much more efficient Proof of Stake. The argument of the critics is that the high energy cost for running a blockchain network is bad for the environment and outweighs the potential benefits that the technology brings. This criticism, which revolves around the energy-intensive nature of PoW networks, hasn’t been unwarranted. Blockchain as an eco-friendly technologyīefore we move on to the actual sustainability use cases for the technology, we need to address a common criticism that has been leveled at blockchain practically since the early days of the technology. Indeed, we’re already seeing signs that tokenized carbon credits could be a strong driver for better digital carbon credit markets. On that note, an area where blockchain can have an immediate impact is carbon credits. Indeed, blockchain technology’s unique strengths and features can be harnessed to power innovative solutions for sustainability, environmental awareness and renewable energy. Lately, the technology has been increasingly recognised for its potential as a driver of ESG (environmental, social and governance) innovation. Blockchain technology is gradually finding ways to impact new industries and aspects of life. ![]()
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