Enterprise blockchain to play a pivotal role in creating a sustainable future

Companies are turning to enterprise blockchain-based solutions to meet environmental sustainability goals as well as business demands.

Bitcoin (BTC) is often used to criticize all blockchain-based projects. This is understandable since Bitcoin was the first project to use a blockchain, is arguably the most recognizable and is the largest cryptocurrency by market cap.

In the first half of this article, I will use Bitcoin as a proxy for all blockchain-based projects because most people associate blockchain with Bitcoin. Anything environmentally positive that can be said about Bitcoin will be doubly true for the vast majority of newer blockchain-based projects since Bitcoin uses the oldest version of blockchain technology.

Blockchain energy consumption

Bitcoin has been attacked for high energy consumption. Headlines pointing out that Bitcoin’s electricity usage is comparable to a country’s total consumption is a popular critique. Comparisons are useful, but they can have a deceptive framing effect. For example, the statistics most often cited in these attention-grabbing headlines are taken from the Cambridge Center for Alternative Finance (CCAF). The same organization also points out that transmission and distribution electricity losses in the United States could power the entire Bitcoin network 2.2 times. Always-on electrical devices in America consume 12.1x more energy than the Bitcoin network.

So, the Bitcoin network uses as much electricity as a small country or far less than one sliver of America’s energy budget. Is that a lot? It depends on how you look at it.

Related: Is Bitcoin a waste of energy? Pros and cons of Bitcoin mining

Another often used critique is that Bitcoin’s electricity consumption is growing so rapidly that Bitcoin emissions alone could push global warming above 2°C, or consume all of the world’s energy by 2020. The latter didn’t happen. Why? First, like most network-based technologies, Bitcoin is following an adoption curve defined by the theory of diffusion of innovations — an “S curve.”

The explosive, exponential-like growth in the first half of the curve slows down considerably in the latter half. Second, large and predictable improvements in computer efficiency will continue to lower the energy cost of computing even as Bitcoin’s growth slows. Third, such predictions don’t take into account the evolving energy mixture of Bitcoin.

Blockchain energy mixture

Almost all of the energy consumed by blockchain projects come from electricity used by computers that secure the network. Bitcoin calls these “miners,” but newer blockchain projects can use much more efficient “validators.” Electricity is produced from many different sources, such as coal, natural gas and renewables like solar and hydroelectric. Those sources can create very different levels of carbon emissions, which largely determines their environmental impact. The two most prominent estimates of Bitcoin’s energy from renewables range from 39% in this report to 74% in this report. Either of these estimates is “cleaner” than America’s energy mixture, which is just 12% from renewables.

There is evidence that the public scrutiny to which Bitcoin has been subjected has most likely ensured that energy from renewables will only increase in the future.

Blockchain is worth it

Bitcoin’s energy consumption and composition are not perfect, nor is it as terrible as is often reported. What is often lost in the conversation over Bitcoin’s energy usage is whether Bitcoin’s use of energy is worthwhile. Plenty of industries require energy or produce massive amounts of waste, but most people deem the environmental costs to be worthwhile. The agricultural industry requires massive outlays of fossil fuels for fertilizers and to power field equipment, not to mention producing harmful runoff. Yet, despite the environmental negatives, we recognize the overwhelming importance of growing food. Instead of discarding agriculture, we strive to improve the environmentals of agriculture.

Related: Green Bitcoin: The impact and importance of energy use for PoW

Whether enabling the 1.7 billion unbanked to gain financial inclusion or offering an alternative to predatory international remittance services, it seems clear to me that Bitcoin is worth the energy usage. It’s even clearer that enterprise blockchain is an unmitigated public good.

Newer, alternative blockchain technology uses at least 99.95% less energy than older ones. Enterprise blockchain can use even less energy since it can be tailored for specific use cases. In addition to using significantly less energy, Enterprise blockchain is helping organizations achieve sustainability goals.

Blockchain as a key driver for renewable energy

Solar and wind are now cheaper than fossil fuels such as coal and natural gas. Solar and wind are now comparable to geothermal and hydroelectric. Despite solving the cost problem, renewables have several problems preventing mass adoption. Geothermal and hydroelectric are geography bound. Solar, wind and to a lesser extent, hydroelectric suffer intermittency and grid congestion. Intermittency means they are currently too unreliable. There’s no sun at night, the wind sometimes stops, and there are rainy and dry seasons. Grid congestion is similar to car traffic. Due to geographic constraints, renewables are usually built in rural areas. However, most energy is needed in dense towns and cities. Like a car in a traffic jam, the electricity is delayed getting to its destination.

There are solutions, such as building battery storage and increasing transmission capacity, but these are expensive infrastructure projects. This is where Bitcoin, and blockchain, in general, can help. Unlike Bitcoin miners and other blockchain projects can be built anywhere. They’re profitable businesses so they can essentially subsidize the building of renewable infrastructure by always using excess energy produced.

Related: No, Musk, don’t blame Bitcoin for dirty energy — The problem lies deeper

Another promising energy technology well suited to blockchain is person-to-person (P2P) electricity trading. These energy sharing schemes provide electricity suppliers and consumers with the opportunity to trade energy without the need for existing third-party intermediaries while increasing the level of renewable energy. Similar to renewable infrastructure, blockchain-based projects will incentivize the development of P2P energy grids.

Blockchain enables material procurement and provenance

Consumer demand for more ethically sourced products is steadily increasing. Companies have to prove that their product is produced in such a way that protects the environment and public health, and is made ethically. Consumers wary of greenwashing, have had to rely on information provided by companies. Blockchain-based projects are already changing this dynamic.

Everledger has created tools to increase consumer and enterprise insight into the provenance of a given object. By combining blockchain, AI and IoT, Everledger digitally streamlines compliance processes and allows companies to demonstrate the true origin of their products.

Transparency and traceability will be crucial to fostering consumer trust in food supply chains. Supermarket giant Carrefour and the world’s largest brewer AB InBev partnered with enterprise blockchain developer SettleMint to deliver a digital traceability solution that utilizes dynamic QR codes attached to a product during the packaging process.

Green financing

Green financing is the use of loans to support sustainable companies and fund the projects and investments they make. It will be crucial to close the $2.5 trillion annual SDG funding gap, which is estimated to grow bigger. A good example of green financing is the green bond (GB) market. According to the Climate Bonds Initiative, $269.5 billion in GBs were issued in 2020.

Unfortunately, GBs are not without problems, such as confirming that sustainability metrics are authentic, or that funds were used to support sustainability. Blockchain can immutably store this data, thus, projects can be verified to satisfy sustainability requirements. Blockchain can help in other ways too, like tokenization.

Related: How will blockchain technology help fight climate change? Experts answer

Oi Yee Choo, chief commercial officer at iSTOX, a Singapore-based digital securities exchange, said in this interview: “Even in markets where the demand for green bonds is high because investors are motivated by ESG considerations, tokenization helps investors diversify their portfolio across different bonds because of smaller subscription sizes.”

The blockchain industry is currently far from ideal in terms of environmental sustainability. However, if it maintains its current trajectory, the blockchain industry will not only be an exemplar but an enabler of environmental sustainability.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Matthew Van Niekerk is a co-founder and the CEO of SettleMint — a low-code platform for enterprise blockchain development — and Databroker — a decentralized marketplace for data. He holds a BA with honors from the University of Western Ontario in Canada and also has an international MBA from Vlerick Business School in Belgium. Matthew has been working in fintech innovation since 2006.

Ethereum Co-Founder Vitalik Buterin Publishes ‘Plausible Roadmap’ Addressing Scalability

Ethereum Co-Founder Vitalik Buterin Publishes 'Plausible Roadmap' Addressing Scalability

In recent times the Ethereum network has received a lot of criticism about the protocol’s data transfer fees and scalability. In a blog post called “Endgame,” published on December 6, the co-founder of Ethereum, Vitalik Buterin discussed plans to improve scaling, the upcoming proof-of-stake transition, and censorship resistance.

Buterin Outlines Plausible Ethereum Scaling Roadmap in Endgame Blog Post

Vitalik Buterin, the prominent co-founder of the Ethereum project, has outlined his thoughts about a “plausible roadmap” that could address the network’s scaling issues. The blog post dubbed “Endgame,” explains a few concepts like a “second tier of staking with low resource requirements,” and introducing fraud proofs or Zk-Snarks where ETH users can “cheaply” acquire block validity. The roadmap Buterin summarizes aims to improve the blockchain without giving up censorship resistance.

“What do we get after all of this is done? Buterin asks in his latest blog post. “We get a chain where block production is still centralized, but block validation is trustless and highly decentralized, and specialized anti-censorship magic prevents the block producers from censoring.” Buterin further adds:

It’s somewhat aesthetically ugly, but it does provide the basic guarantees that we are looking for: even if every single one of the primary stakers (the block producers) is intent on attacking or censoring, the worst that they could do is all go offline entirely, at which point the chain stops accepting transactions until the community pools their resources and sets up one primary-staker node that is honest.

Buterin Discusses an Ethereum Rollup-Centric Roadmap, Big Block Chains, and Cross-Domain MEVs

Buterin’s recent blog post follows the discussions that took place at the end of November when Ethereum developers talked about concepts such as EIP-4488. The plan could reduce data transfer costs five times less, and Ethereum developer Tim Beiko shared his thoughts on EIP-4488 and lowering the costs of rollups. In the Endgame blog post, Buterin also talked about leveraging rollups and this technology’s “possible long-term future.”

“Ethereum is very well-positioned to adjust to this future world, despite the inherent uncertainty,” Buterin stresses. “The profound benefit of the Ethereum rollup-centric roadmap is that it means that Ethereum is open to all of the futures, and does not have to commit to an opinion about which one will necessarily win.” Buterin further added:

Ethereum researchers should think hard about what levels of decentralization in block production are actually achievable. It may not be worth it to add complicated plumbing to make highly decentralized block production easy if cross-domain MEV (or even cross-shard MEV from one rollup taking up multiple shards) make it unsustainable regardless.

In terms of “big block chains” Buterin says “there is a path for them to turn into something trustless and censorship-resistant, and we’ll soon find out if their core developers and communities actually value censorship resistance and decentralization enough for them to do it.” Buterin’s blog post ends by saying that “it will likely take years for all of this to play out.”

“Sharding and data availability sampling are complex technologies to implement. It will take years of refinement and audits for people to be fully comfortable storing their assets in a ZK-rollup running a full EVM,” Buterin’s Endgame post concludes. “And cross-domain MEV research too is still in its infancy. But it does look increasingly clear how a realistic but bright future for scalable blockchains is likely to emerge.”

What do you think about Vitalik Buterin’s Engame blog post concerning scaling and possible roadmaps? Let us know what you think about this subject in the comments section below.

SBI announces crypto joint venture with Swiss digital exchange SIX

The crypto venture is expected to formalize its operation by the end of 2021 and start offering its services by early 2022.

SBI Digital Asset Holdings, a fully owned subsidiary of Japanese banking giant SBI Holdings, announced a joint crypto venture with Switzerland’s SIX digital exchange (SDX). 

The joint venture would be set up in Singapore through a crypto issuance company and aims to become a regional liquidity hub for institutions. SBI Holdings CEO Yoshitaka Kitao said:

“This is an important step in building the necessary global infrastructure for widespread institutional adoption of digital assets. Together with SDX‘s strength in Switzerland and our planned digital exchange in Osaka, this venture will establish a powerful institutional corridor between Europe and Asia.”

The partnership between SBI and SIX banks on growing crypto demand in the Asia-Pacific region and will cater its services to regulated institutions. The venture is expected to formalize its operations by the end of 2021 and start offering its services by early 2022 following regulatory clearance from the Monetary Authority of Singapore.

The new undertaking will offer a range of digital asset products and services in the form of tokenized securities such as digital bonds, digital equities and digital securitized loans.

SIX did not immediately respond to Cointelegraph’s request for comment.

Related: SBI doubled crypto business profits in past fiscal year.

SDX chairman called SBI a natural partner for the joint venture given their expertise in the institutional digital asset market and dominance in Asia. 

Singapore has grown to become a global crypto hub over the past few years. Major crypto exchanges like Binance, FTX, Coinbase, Huobi, and several others have found a home in the country amid regulatory uncertainty around the globe.

Delaying the Ice Age — Ethereum Network Participants Prep for Upcoming Arrow Glacier Upgrade

Delaying the Ice Age — Ethereum Network Participants Prep for Upcoming Arrow Glacier Upgrade

The Ethereum network will be undergoing a scheduled upgrade soon called “Arrow Glacier,” a change that aims to mimic the “Muir Glacier” upgrade. Essentially, Ethereum’s Arrow Glacier changes the parameters of the network’s Difficulty Bomb delay to June 2022. This will give the Ethereum network another six months until it leads to the “Ice Age” proof-of-stake (PoS) transition.

Arrow Glacier Aims to Postpone Ethereum’s Ice Age

At Ethereum block height 13,773,000 the network will implement the Arrow Glacier upgrade which aims to postpone Ethereum’s Difficulty Bomb. The bomb mechanism has been around since 2015 and makes the network’s mining difficulty increase over time. The end result will lead to the Ice Age, a moment in time when the blockchain stops proof-of-work (PoW) block production and the chain is 100% reliant on proof-of-stake (PoS) consensus.

The Difficulty Bomb was supposed to happen 4,000,000 blocks or 611 days after the Muir Glacier network upgrade. However, Arrow Glacier will push the bomb back further to June 2022. This will give ethereum PoW miners another six months to continue mining the Ethereum blockchain until the June 2022 change. Once the Difficulty Bomb does happen the mining difficulty will make it so PoW miners get phased out because it will be too difficult.

Arrow Glacier is expected to happen between now and Wednesday, December 8, 2021. “The Arrow Glacier network upgrade, similarly to Muir Glacier, changes the parameters of the Ice Age/Difficulty Bomb, pushing it back several months,” Ethereum developers expain. “This has also been done in the Byzantium, Constantinople and London network upgrades. No other changes are introduced as part of Arrow Glacier.” The announcement adds:

The Difficulty Bomb only affects proof-of-work networks, and hence only exists on the Ethereum mainnet and the Ropsten test network. With the recent progress towards Ethereum’s transition to proof-of-stake, it was decided to only delay the bomb on mainnet for now and to try and run the proof-of-stake transition on Ropsten before the bomb goes off on that network.

Ethereum Hashrate Taps All-Time High, Ether Is the Second-Most Profitable Coin to Mine in 2021

While Ethereum network participants have been waiting a long time for the Ice Age PoS transition, ethereum miners have been enjoying the PoW incentives. During the early morning hours of December 7, Ethereum’s hashrate reached 1 petahash per second (PH/s). The recorded metric is the highest the hashrate has ever been and currently Ethereum’s processing power is coasting along at 900 terahash per second (TH/s).

Additionally, besides kadena (KDA) mining, ethereum (ETH) mining is currently the second-most profitable cryptocurrency to mine today. At $0.12 per kilowatt-hour (kWh) and today’s ether exchange rates, a 1,500 megahash per second (MH/s) machine can get around $91 per day. Mining ethereum with the most profitable ether mining rig is 68.85% more profitable than mining bitcoin (BTC) with today’s best performing SHA256 bitcoin miner which gets a touch over $28 per day in profits.

What do you think about the upcoming Arrow Glacier upgrade? Let us know what you think about this subject in the comments section below.

Tezos blockchain notes power savings after PoS switch: PwC report

The switch to proof-of-stake has had noticeable energy saving effects for the Tezos network.

Tezos, a privacy focused blockchain network, released its carbon footprint report from PricewaterhouseCoopers Advisory SAS — a French member firm of the PwC network of member firms. 

The PwC report reflects drastic improvements in energy efficiency for Tezos since moving from a proof-of-work (PoW) mining consensus to a proof-of-stake (PoS) one. 

The PwC report highlighted a significant decline in carbon emission by Tezos network despite a rise in network activity. Tezos blockchain accounted for 50 million transactions while, according to the report, the whole network constituted an energy footprint of 17 world citizens. 

The energy efficiency for each transaction on the network increased by 70% while the estimated electricity requirement per transaction was 30% lower than in 2020.

“As more brands and companies factor energy consumption into business decisions, an energy efficient blockchain like Tezos is well poised to meet their needs and deliver efficient, secure, and reliable operations,” said Reid Yager, global director of communications at Blokhaus, a marketing firm associated with Tezos.

The annual energy consumption of the Tezos network is estimated to be at 0.001 Terawatt hours (TWh), which is negligible when compared to the likes of Bitcoin (BTC) at 130 TWh and Ethereum (ETH) at 26 TWh. Tezos consumes nearly 2.5 g CO2 equivalent per transaction

Related: French retail giant will launch Tezos-based stablecoin

The change to PoS has not only helped the Tezos network decrease its carbon footprint, but also opened new avenues in the nonfungible tokens (NFT) and decentralized finance. Tezos has been selected by Red Bull Racing, Honda and McLaren Racing as their NFT launch platform. It was also awarded as the blockchain of choice by Art Basel Miami Beach for its ecosystem exhibition.

There has been a significant increase in the number of blockchain networks making a switch from PoW to PoS owing to energy consumption issues and scalability complexities. Apart from Tezos, ZCash (ZEC), another privacy focused blockchain network. is making a switch to PoS. Most of the blockchain networks making the switch are looking to steer clear of the energy consumption FUD associated with the PoW mining consensus.