The scoop: The sustainability of Web 3 ties closely to the real world. A large portion of our world depends on energy also needed to run the web.
There are some outside factors you may not be aware of that can drastically change how Web 3 influences sustainability around the world (not just on the web).
- Only about 12% of the energy in the US comes from renewables right now. This needs to change in order to provide a more sustainable energy source for Web 3 applications.
- Web 3 applications can offset its energy consumption by making other aspects of our economy more sustainable.
- It’s still early. We are likely to see unexpected solutions come from unexpected areas. Buckle up for the ride.
What’s next? Rather than trying to predict the future, spot trends that influence the sustainability of Web 3 to better gauge its progress.
Dig deeper → 5 min
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The scoop: El Salvador announced that Bitcoin is now legal tender. Citizens can pay taxes with it and stuff.
Why it matters: El Salvador is the first country to recognize a cryptocurrency as a legal form of currency. This marks a major shift toward government's view of decentralized financial systems, and a potential shift away from central banks.
The energy problem: We all know Bitcoin has an energy problem. To combat that, El Salvador plans to use geothermal energy from its volcanoes to produce cheap, clean energy for bitcoin mining. Let's see if they can build sophisticated infrastructure to match pent-up demand.
Bottom line: In the rush to make bets on the future of finance, governments around the world are responding with crypto plans for citizens.
Question: Will this push for legal forms of cryptocurrency help or hurt its climate impact in the long-run?
Dig deeper → 2 min
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The scoop: NFTs went mainstream. Now more people are starting to realize Ethereum has a sustainable energy problem. There is a solution.
Not all blockchains are the same: Bitcoin uses about 1% of the world’s electricity. Ethereum is the second largest coin and runs on a similar model as Bitcoin. Neither are energy efficient.
Still, blockchain technology as a whole operates under many different consensus algorithms. Bitcoin and Ethereum’s proof-of-work model is just one version.
Sustainable proposals: Convert mining facilities to use more renewable forms of energy. That’s a good place to start.
More effectively, big coins like Bitcoin and Ethereum can operate using a proof-of-stake model to be more sustainable. This would allow fewer nodes (computers) to validate transactions on the public ledger and increase the energy efficiency of their blockchains.
Finally, emerging coins should look to more efficient consensus algos like Ripple as a model for sustainable crypto. That would propel the industry forward.
Bottom line: Progress is happening. There are existing solutions. The blockchain industry just needs a little nudge to do better.
Dig deeper → 3 min
The scoop: Last week, Ripple’s CEO made an ambitious commitment to go carbon net-zero by 2030 in collaboration with conservation Rocky Mountain Institute and REBA, and pressured other crypto companies to do the same.
- Unlike Bitcoin, Ripple (XRP) was built with a finite supply (100 billion) at its inception, making it easier to control mining activities and mitigate its environmental footprint.
- Compared to Bitcoin’s 4.51 billion lightbulb hours needed to mine it, the XRP Ledger uses just 79,000.
- A lot needs to happen to make do on that claim, but Ripple is the first crypto looking to go carbon net-zero, and they have a plan (see below).
Bottom line: I don’t know if Ripple, Ethereum, and Bitcoin will one day replace Euros, Dollars and Yuan. With that said, why not bet a dollar on the possibility that they one day could?
Dig deeper → 3 min.