Organizations across public and private sectors have taken great strides toward sustainability, including the launch of the global biofuels alliance at the G20 summit earlier last month.
While the world awaits the implementation of these green steps toward climate change, world leaders and environmentalists will now turn their attention toward COP28 — the international climate summit.
One topic seemingly not up for discussion at this crucial climate summit is a ban on cryptocurrencies and the significant carbon emissions that they generate.
In an article in Business Today, Gita Gopinath, Deputy Managing Director, International Monetary Fund (IMF), said: “There is no talk of banning cryptocurrencies, indicating a global consensus against such measures.”
The 2021 figures by ScienceDirect reveal that cryptocurrencies’ annual power consumption was 236×10⁶ MWh. For example, Bitcoin’s July energy consumption alone ranged from 29.96 TWh to 135.12 TWh, which is equivalent to the energy consumption of countries such as Sweden and Thailand.
Cryptocurrencies annually consumed 3,670×10⁶ m3 water, which is more than double of conventional currencies due to crypto mining. Mining results in 139×10⁶ tons CO2-eq of global GHG emissions in which between 25 to 50 million tons of CO2 annually was produced in the US alone.
To combat this challenge, a wide range of new-age technologies are being developed and deployed to reduce the carbon emissions from assets like cryptocurrencies.
One such technology is green blockchain, which is a crucial ally in supporting climate action. A green blockchain is committed to carbon-negativity and does not contribute to climate change through greenhouse gas emissions due to its consensus mechanism.
Blockchains’ consensus mechanism is a program used to achieve a state of a decision or distributed agreement on which all network participants agree to the ledger's state. It refers to all incentives, protocols and ideas that allow a network of nodes to agree on the state of a blockchain. A consensus mechanism has 10 types, including Proof-of-Work (PoW) and Proof-of-Stake (PoS).
Researchers at University College of London (UCL) Centre for Blockchain Technologies confirmed in a study that green blockchains’ PoS mechanism — used by Ethereum — is environment-friendly and consumes far less energy than Bitcoin’s PoW. PoW is centralized and consumes a significant amount of energy and time for a single transaction.
Blockchain’s energy consumption depends on its consensus mechanism, and this is where decentralization is crucial because this factor also impacts the geographical location. They often operate at high temperatures, so their environmental impact varies based on their location and energy source.
“We already know how blockchain-based traceability solutions can bring much required transparency and assurance around the environmental claims. But in the battle against greenwashing, sustainable blockchain is a key factor,” says Santhosh Jayaram, Senior Vice President & Global Head – Sustainability at HCLTech.
What makes it green?
The hashgraph mechanism is the next-generation distributed consensus algorithm and data structure using Distributed Ledger Technology (DLT). A DLT is a flexible way of recording and maintaining a shared database that's duplicated across a network of nodes or computers and allows simultaneous access, validation and record updating in various locations.
Compared to a centralized ledger, this decentralized communication via the Directed Acyclic Graphs (DAGs) represent the history of transactions or events as the edges have a direction and not a chain. This makes transactions efficient in data storage, faster and more secure across a network. It eliminates high computational power consumption and the need for resource-intensive mining used in PoW algorithms.
“With the lowest energy consumption when compared to leading blockchain networks, the hashgraph consensus boasts the fastest transaction speed and the highest number of transactions per second. Its sustainability claims and its suitability for applications like the carbon credit industry is something to watch in the future,” Jayaram adds.
On its website, Hedera claims that according to the “recent study conducted by UCL,” it is the most sustainable public network due to the efficiency of the hashgraph consensus it uses. Its average energy consumed per transaction is 0.000003 kWh. Hedera and Swirlds™ are using this mechanism to make operations easy in the healthcare industry.
In the healthcare industry, a hashgraph DLT offers many solutions for data management and decentralization. As DLT is a collection of transactions maintained in a decentralized form across multiple computers or nodes, it provides high level of cybersecurity in an industry that's hit hard by cyberattacks.
A hashgraph DLT also enables immutable and faster timestamp making document security stronger yet easy to access. Therefore, it improves patient care by expediting paperwork, reducing workplace burnouts and increasing revenue.
Security and sustainability
In industries like healthcare and O&G, cybersecurity has always been a priority and now, sustainability is climbing up that list.
If an O&G company or a healthcare organization moves from traditional operations to a more secure and eco-friendly approach that addresses climate change, green blockchains — using the hashgraph mechanism — are the right choice.
The smart choice ultimately depends on whether the emphasis is primarily on sustainability tracking or overall operational optimization.
Hashgraph mechanism enables faster transaction processing and lower energy consumption. This speed can significantly reduce operational costs for O&G companies. Additionally, hashgraph's consensus mechanism enhances zero-trust cybersecurity.
A green blockchain is thus a compelling choice for the different industries seeking to adopt sustainable practices because it combines speed and sustainable practices, along with being cost-efficient and backed by zero-trust security.
With rising and more sophisticated global cyberattack incidents, hashgraph’s zero-trust security stands out as a robust solution as it employs cryptographic techniques that ensure zero-trust data security.
This forms an immutable chain that guards against unauthorized tampering, while AI-driven algorithms monitor data access events in real time. The result is a fortress of data integrity, assuring stakeholders of the untainted veracity of their data, while delivering on the promise of a more sustainable future.
With inputs from Prasanna Dinesh N