Crypto’s Need for Sustainability Standard-Setting Starts Here

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Patricia Trumpeter, executive director of 3d spherea Nasdaq-listed crypto mining company.

Cryptocurrencies have gained tremendous momentum in recent years, attracting the attention of proponents and skeptics alike. While investors have praised digital currencies for their high yield and fiat-based volatility, critics have denounced the environmental impacts and toll that high powered computing requirements to power the blockchain are taking on the planet.

The reality is the impact of cryptocurrencies pales compared to other sources. For example, Bitcoin (BTC) it represents only 0.23% of the world’s total energy consumption and accounts for less than half of the energy consumed by the global cement industry. Meanwhile, iron and steel production consumes more than 8 times the energy of Bitcoin and residential air conditioning alone outperforms Bitcoin by a factor of 14.

Of course, regardless of its relative impact, the cryptocurrency industry still has a responsibility to do its part to avert the climate crisis. After all, if the airlines with their giant jet engines can commit to carbon neutral operations by 2050, surely we can incentivize energy providers to switch to clean energy solutions.

The Crypto Climate Accord (CCA) aims to do just that, with participants pledging to reach net-zero carbon operations by 2040. The problem is that there doesn’t seem to be a clear path to get there. Buying carbon credits while getting 100% of your power from a coal-fired power plant is not the long-term solution.

Neither option solves the fundamental problem: there is no way to effectively measure a company’s carbon neutrality claim.

The lack of clear standards for measurement and reporting creates a Wild West of claims, fully ripe for greenwashing and false claims.

Since each company uses different metrics, it is impossible to know if they are really living up to expectations.

While CCA’s goals are admirable and necessary, including transitioning to renewable sources and reducing carbon footprints, without clear standards for measurement, it lacks the necessary “teeth” to hold companies accountable for their commitments.

Just as well-established GAP accounting standards have created a framework for fiscal clarity, establishing a framework for carbon measurement would ensure a level playing field and achieve six key objectives:

  • Allow the industry to identify a valid baseline and set realistic benchmarks for incremental progress toward goals.
  • Enable crypto miners to make more informed decisions about the hosts they choose based on their performance. If I know that each of my potential partners is reporting the same metrics, I can more easily compare them on an “apples to apples” basis to make an informed decision.
  • Help investors make more informed decisions, without having to rank all the inputs into each hosting platform’s carbon calculations for a baseline comparison.
  • Create competitive differentiators to help drive compliance and better performance across the industry with public emissions reporting and carbon neutral progress.

This, in turn, would foster a more favorable public opinion and comfort level with energy providers in the crypto industry, encouraging more people to invest and thus growing the industry by establishing a more trustworthy perception and respectable.

Of course, the next question is “how do we get there?” Certainly, no one wants to see regulation of the crypto industry; it goes directly against the very principles for which the crypto industry was created. But a certain meeting of minds is necessary, and I strongly believe that we can set metrics and monitor our own compliance.

If the US Congress is so focused on “big data centers”, I would recommend that they encourage crypto miners to select renewable energy partners through incentives, as well as incentivize hosting facilities to use green energy . We would need a standard set of metrics to measure the truth of renewable energy.

We could form an independent working group comprised of not only the key players (miners, hosting facilities, trading platforms, etc.), but also those with a neutral interest and third-party expertise.

We need hands-on business experience and input from all angles, including the US. Environmental protection agencyAs long as they promise not to delay us.

We also need the detractors. As my mentor and former boss at GE I used to say that the adversity in the room makes the program or decision more solid and well thought out.

Let’s invite climate change and green energy skeptics into the discussion and hear what they have to say.

As difficult as it is to hear, your point of view can inform how we measure and publicize our performance in the face of rigorous scrutiny. Together we could create a set of metrics with compelling definitions by which host partners could measure their renewable energy performance, almost a “renewable rule of thumb.” Then incentivize miners and hosts to use renewable energy like we do in other industries.

By establishing clear metrics, auditable standards, and holding ourselves accountable, the cryptocurrency hosting industry can not only realize the immediate goals of the CCA, but also ensure the long-term sustainability of the industry.
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