Virtual Currency, Real Impact
From politics, to the art world, to the auto industry, there’s not much out there that hasn’t been impacted by the world of cryptocurrency — and while we’re intrigued by sending Dogecoin to the moon, we’d also like to make sure that those moonshots don’t come at the expense of the planet.
Let’s start with the basics: what exactly are we talking about when we talk about crypto? And how does a digital ecosphere impact the planet? Any conversation about it is likely going to touch on four key terms: blockchain, mining, NFTs, and of course, cryptocurrency — so let’s dig in.
Blockchain:
Put (really, really) simply, blockchain is a specific type of database that stores data differently from a typical database — i.e., in “blocks” that are “chained” together. Each “block” holds a record of data transactions, and once a block is filled and can no longer be updated with new data, it is added to the chain — and another new block is formed.
Thanks to the fact that the blockchain is a decentralized system, all the information stored upon it is publicly available and nearly impossible to tamper with. This level of transparency and security lends itself perfectly for any number of different uses, from healthcare, to logistics, to voting, and maybe most notably, to. . .
Cryptocurrency:
Cryptocurrency is a digital currency that is secured by cryptography (hence the name), which makes it extremely difficult to counterfeit. It can be used to buy goods and services via the blockchain, as well as secure, manage, verify, and record online transactions. Some popular cryptocurrencies include Dogecoin, Bitcoin, and Ethereum. You can buy cryptocurrency using conventional money, or. . .
Mining:
Put away the pickaxes — in this case, “mining” refers to the process of putting new cryptocurrency in circulation by verifying transactions on the blockchain.
Since the blockchain is decentralized, “miners” provide the valuable service of validating and verifying transactions on the blockchain. To incentivize these efforts in securing the network, new cryptocurrency tokens are generated to reward miners. Mining is performed using very sophisticated computers that solve extremely complex computational math problems — so the faster your CPU, the better you are at mining. And a fast CPU uses a LOT of energy.
NFTs:
Short for “non-fungible tokens,” NFTs are a unique cryptocurrency token that can come in just about any digital shape or size — from art, to tweets, to newspaper articles. A key differentiator between NFTs and cryptocurrency is that unlike cryptocurrency, NFTs cannot be replaced with something else. For instance, if you owned an NFT of the Mona Lisa, you wouldn’t be able to exchange it for an identical NFT of the Mona Lisa — there can be only one original, and as such, one owner of that original.
So now that you’re an expert on all things crypto, let’s talk about its impact on the planet.
Globally, the Ethereum blockchain produces 23 million tons of CO2 emissions every year from energy use, while Bitcoin clocks in at around 37 million tons of carbon dioxide emitted. A single Bitcoin transaction uses about as much energy as an average American home uses over a period of 53 days, and since the biggest and fastest computers mine the best, places with cheap, readily available energy, usually ones that rely heavily on fossil fuels like coal, are prime locations for mining operations. An increase in energy use means an increase in fossil fuel use, and we all know what that means for the planet.
Given the tremendous stress these transactions cause the planet, many in the cryptocurrency community rightly feel that they need to play a part in mitigating the effects it has on energy consumption and the environment. And thankfully, our friends at Endaoment, a the first-of-its-class public charity providing Donor-Advised Funds on the Ethereum blockchain, came up with a method to do just that in a tangible, verified way.
Endaoment is a non-profit organization that uses blockchain technology to allow individuals and organizations to make efficient, tax-deductible, cryptocurrency donations to any registered 501(c)(3) nonprofit in the United States, sent to them as US dollars via bank wire. Since its inception, Endaoment has provided more than 1.5 million non-profit organizations with the infrastructure to process digital asset donations — and we’re honored to be one of its newest recipients, thanks to their brand new Crypto Carbon Offset Fund program.
The fund is a collaboration between Endaoment and Carbonfund.org Foundation, working to create a place where those in the space can use funding from cryptocurrencies to help mitigate the emissions caused by the tremendous energy use cryptocurrency requires. Each week, Endaoment will take the balance of this new fund, and distribute it evenly to the United States’ three leading nonprofit carbon offset providers: Carbonfund.org, The Bonneville Environmental Foundation, and, or course, Cool Effect. All granted funds will be accompanied by legally-binding instructions to only buy high-quality, verified carbon offsets.
And since you already know who we are, allow us to introduce you to our crypto-companions:
Carbonfund.org Foundation -
Carbonfund.org is a foundation leading the fight against climate change by making it easy and affordable for any individual, business or organization to reduce & offset their climate impact, and hasten the transition to a clean energy future. Carbonfund.org achieves its goals through climate change education, carbon offsets & reductions, and public outreach. Carbonfund.org has America’s first carbon neutral product label, Carbonfree® Certified, recently added as part of Amazon’s Climate Pledge Friendly Program.
Bonneville Environmental Foundation -
BEF’s mission to restore freshwater, prepare the next generation for clean energy jobs, and catalyze a clean energy future for all is funded in part through the sale of high quality carbon offsets. We’re building a movement based on partnership, participation, and collective impact. BEF brings together partners across all sectors of society to co-create solutions that restore balance between people, nature, and business.
Cool Effect -
At Cool Effect, we know that carbon offsets, while a valuable tool in the fight against climate change, are by no means a magic solution to this global issue. Our entire Carbon Done Correctly approach encourages individuals and organizations to reduce their footprint as much as possible, and rely on verifiable, high quality offsets for what remains. Carbon offsets are not a free pass to pollute — when used correctly, they’re an effective, emissions-reducing way to help businesses and individuals reach their climate goals and improve their carbon footprint. Plus, on top of the great benefits for the planet, a high-quality carbon project will also have multiple secondary benefits for the community where that project is based, benefits like increased job opportunities, local infrastructure improvements, direct economic support, and improved education opportunities within the community.
“One of Cool Effect’s founding principles is that any action, even a small one, can have a tremendous impact in the fight against climate change — and the Crypto Carbon Offset Fund is no small action. It’s a huge milestone, and one that we’re honored to be a part of right from the very beginning.” — Jodi Manning VP, Director of Marketing and Partnerships · Cool Effect
While there are a lot of things you can’t predict about cryptocurrency, its impact on the planet is something we not only can account for, but something we can actively take steps to offset in a meaningful way. We passionately believe that any action, even a small one, can have a tremendous impact in the fight against climate change, and the Crypto Carbon Offset Fund is no small action. It’s a major milestone in the world of cryptocurrency. It’s a milestone that shows how willing this industry is to not only take direct action to fight for Earth, but also make sure that action isn’t just talk — that it has tangible benefits for people and the planet. It’s a milestone that we’re honored to be a part of.
