Thursday, September 28, 2023

Can Ethereum Erase Its Historical Emissions After The Merge?

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A new effort has been made to address Ethereum’s legacy of pollution, even after the cryptocurrency dramatically reduced its greenhouse gas emissions this year. Ethereum software company ConsenSys has launched a new one initiative along with more than a dozen technology and Web3 companies yesterday at the United Nations climate summit in Egypt. The goal of the initiative, called the Ethereum Climate Platform, is to “repair and counteract” the climate pollution that Ethereum has left behind from its inception in 2015 until this year.

In September, Ethereum completed The Merge – a long-awaited software update that reduced the electricity consumption of the blockchain network by 99.988 percent. But prior to that update, Ethereum was using a massive power-hungry system to verify transactions on its blockchain. Crypto “miners” raced to solve complex puzzles for a chance to add blocks of verified transactions to the chain and win new tokens in return. The merge has essentially done away with the puzzles, which is why the network can now use a fraction of the energy it did before.

Before the merger, Ethereum was estimated to consume about as much electricity annually as the country of Bangladesh

Yet the Ethereum network has continued to create a lot of pollution over the past seven years. Before The Merge, Ethereum was estimated to consume about as much electricity annually as the country of Bangladesh. Now ConsenSys, which was involved with The Merge and whose CEO was a co-founder of Ethereum, wants to get rid of those historic emissions.

The first step for the Ethereum Climate Platform will be to find out how much carbon pollution the cryptocurrency has actually caused. “The technology leaves an estimated carbon debt of tens of millions of metric tons,” said a ConsenSys press release. The Platform intends to endorse a study to arrive at a more accurate estimate.

Furthermore, the work of the Climate Platform is still vague. They intend to fund and support a wide variety of projects, including those which may be able to remove carbon dioxide from the atmosphere. ConsenSys lists projects such as emerging carbon removal technologies and nature-based strategies that utilize the ability of forests and the ocean to sequester CO2.

There is skepticism that such plans amount to greenwashing when used by companies whose pollution levels are still rising. Fortunately, that is not the case with Ethereum. Since the network doesn’t rely on carbon removal to reduce its current carbon footprint, these efforts could help put a dent in the garbage heap of pollution they’ve already pumped into the atmosphere.

The caveat, of course, is whether ConsenSys and its partners can actually deliver on the commitment it made yesterday. It says it plans to work with nonprofits and intergovernmental organizations to plan next steps. It is also still calling on others to join the initiative. It counts Microsoft, Polygon and the Global Blockchain Business Council among its founding members.

But many of its members are Web3 companies that plan to “leverag[e] Web3 native technologies” to pursue the Climate Platform’s goal of addressing Ethereum’s past emissions. Web3 projects lost more than $2 billion due to hacks in just the first six months of 2022, a report found earlier this year highlighted the risks the technology still faces. And with the crypto winter only deepening after the bomb cyclone that was FTX, the industry has plenty of junk to clean up at this point.

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