Crypto players' green efforts to combat climate change
Singapore
THE cryptocurrency industry has come under scrutiny for the supposed environmental harm its mining operations wreak. But crypto supporters say the claims are often exaggerated or misrepresented, and that not enough attention has been given to the positive action being taken by the industry.
Some of the initiatives being pursued by businesses in the industry include championing new technologies for carbon capture.
Amar Gautam, founder and chief executive officer of fintech company HyperLinq, says his company has chosen to help scale new technologies that extract the carbon already emitted into the environment.
"Not creating a carbon footprint is the first step towards a cleaner earth, but what about the damage we have already done? Removing CO2 from the atmosphere is critical to counteract climate change."
HyperLinq is part of Stripe Climate, an initiative backed by over 15,000 businesses across 40 countries that aggregates funds from companies worldwide, and works with a multidisciplinary group of scientific experts to find and evaluate the most promising carbon removal technologies.
"A fraction of every purchase from HyperLinq (totalling 1 per cent of its revenue) helps new carbon removal technologies scale," says Gautam. "Most new technology is expensive at first. Early adopters like HyperLinq help promise new carbon removal technologies to lower their costs and scale up quickly."
And he believes the company has made a "considerable" impact, given the size of its business: its current contribution rate will remove 22 tons of CO2 per year, which is about five cars off the road for a whole year.
"We target to increase our contribution to remove 100 tons of CO2 by the end of 2022. In 2023, we plan to increase our contribution to 2 per cent of our revenue," he says.
Raks Sondhi, managing director of cryptocurrency exchange Independent Reserve, believes there may come a time when there are industry-wide initiatives to help address its collective carbon footprint but that, for now, companies are taking their own initiatives to make a difference.
"(These range) from blockchains that have a smaller energy footprint to initiatives such as ours, where the focus is on planting more trees and actively removing carbon."
Independent Reserve joined the Trillion Trees Campaign, which aims to plant 1 trillion trees worldwide, in 2019; and it is working with carbon capture business Climeworks to remove 2.5 tonnes of carbon per year.
And Sondhi says the company plans to announce more green partnerships this year.
Lei Tong, head of Lending at crypto financial services provider Babel Finance, predicts that the industry will embrace more clean mining initiatives in the near term. "More and more people should understand the many alternatives they have when choosing energy sources. The crypto industry is global, and if more people can participate in green mining, the world will become a better place."
Gautam points out that there is currently a vast disparity in the availability of clean energy and the demand for energy: "We should focus on how to generate green energy in larger quantities."
Both Gautam and Tong say that regulations will play a key role, and not just in the cryptocurrency industry. "There will be clearer regulations in countries like the US, Canada, and Norway, and this will lead to industry-wide transformation," Tong says.
Igneus Terrenus, head of Communications at cryptocurrency exchange Bybit, says that other stakeholders, such as investors, can also make a difference.
"Investors can make empowered choices (by selecting) environmentally friendly cryptocurrencies on the market with low carbon footprints and energy expenditures per transaction."
