To counter this quandary, companies like Moss and Aerial have begun offering carbon offsetting for cryptocurrency mining. It’s a step in the right direction, but nothing beats the entire crypto system overhaul scheduled for this June.
In June 2022, Ethereum, the second largest crypto coin next to Bitcoin, is set to transfer to proof-of-stake (POS), alongside Cardano, Tezos, Atmos and other (generally newer) cryptocurrencies. Ethereum’s founder, Vitalik Buterin, claims this will reduce energy use up to 99.95%. The difference is this: unlike POW, POS mining secures the blockchain by verifying transactions in accordance to Ether holders’ stake in the token.
Though specific details vary depending on the project, POS blockchains use a network of validators who offer their own crypto as the stake in exchange for a chance to validate new transactions, update the blockchain, and earn a reward. The winner is determined by both the amount of crypto each validator has at stake, and how long it’s been at stake—literally rewarding the most invested participants.
All that to say, POS mining will not be guzzling electricity to mint coins.
There’s a high degree of pressure on this move, which has been pushed back several times since the initial announcement. The cryptocurrencies that already operate on POS like Tezos and Cardano are being favoured by giants like Redbull and Honda.
“If a sustainable option already exists, then organizations with forward-facing environmental policies are sure to select it,” says Sid Lee EVP and Head of Strategy Yanick Bédard. “2022 will be a pivotal year.”