Understanding Blockchain's Eco-Friendly Shift Binance published a blog post
on Monday teaching readers how to dispel commonly cited blockchain FUD related to the industry’s energy footprint
and supposed environmental harm.
As the company points out, most of the industry’s energy footprint
is related to mining on the Bitcoin network, which uses a proof of work (POW) consensus mechanism.
Most modern blockchains, however,
use alternative consensus mechanisms like proof of stake (POS), which do not focus on energy consumption
to keep the network decentralized.
“The Crypto Carbon Ratings Institute (CCRI) has examined the impact of Ethereum’s transition from PoW to PoS and found that its annualized electricity consumption went down by more than 99.9% as a result of the upgrade,” wrote
Binance. “Accordingly, Ethereum’s carbon footprint also decreased by 99.9%.”
Not only do these blockchains consume little energy,
but many are using their unique features to help enable green energy initiatives.
Peer-to-peer energy trading, for example, lets traders
buy and sell excess renewable energy. Blockchains can also be used for transparent carbon footprint tracking in the
context of supply chains, which
can further encourage businesses to reduce their environmental impact.
