NEAR Protocol
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NEAR Protocol

The Future of Blockchain and Climate Change

Crypto and Climate change

As world leaders met in November to devise new commitments for reducing greenhouse gas emissions, climate-neutral development platform NEAR Protocol has been re-writing the narrative for what sustainability and stewardship look like in the age of crypto.

The effects of climate change are being felt from “from the ocean depths to the mountaintops,” remarked United Nations Secretary General António Guterres as world leaders and diplomats from 120 countries descended on Glasgow, Scotland for the 26th Conference of Parties (COP26) under the United Nations Framework Convention on Climate Change.

With a renewed sense of urgency, world leaders convened to discuss climate change mitigation strategies, the ultimate goal of which is to limit the average global temperature rise to 1.5º C by the end of this century. Guterres warned, “Enough of burning and drilling and mining our way deeper. We are digging our own graves.”

In recent years, a new type of mining has accelerated carbon dioxide (CO2) emissions: cryptocurrency. Fueled by skyrocketing public interest, cryptocurrencies Bitcoin (BTC) and Ethereum, along with other proof-of-work (PoW) blockchain protocols are contributing to climate change across the globe.

On the other end of the spectrum, NEAR Protocol, utilizing a proof-of-stake (PoS) blockchain, has achieved climate neutrality. NEAR is helping to usher in this era of unparalleled energy efficiency on an infrastructure that is super fast, incredibly secure, and capable of onboarding millions of users into the world of Web3.

Why blockchain must evolve

With 6.25 BTC minted globally every 10 minutes, traditional crypto is mined in warehouse facilities with elaborate, multi-aisle shelving and rack systems that house computers working around the clock to unlock new batches of coins.

These server farms consume astonishing amounts of electricity. One Texas facility has a total power capacity of 750 megawatts, or roughly 3.75x that of downtown Dallas. These resource hogs all share a common thread: they are PoW, where miners prove that they performed a certain amount of computational effort before receiving the reward for a validated block.

Bitcoin, the first blockchain with the highest market cap and greatest global awareness today, generates a staggering 87.68 million tons of CO2 emissions annually. That is roughly comparable to the entire carbon footprint of Chile. A single Bitcoin transaction can consume 1839 kWh, equivalent to the power consumption of the average US household over 63 days. As a direct comparison, Bitcoin uses the same amount of energy for one block in ten minutes as NEAR would in 10 years.

Blockchain’s digital nature, and the absence of large bulldozing operations in forests or dangerous coastal drilling operations, means that crypto-mining’s environmental damage occurs invisibly, unperceived by its enthusiasts and the general public alike.

Building blockchain’s climate neutral future

NEAR Protocol, a third-generation PoS blockchain, is actively invested in contributing to climate change solutions and not being part of the problem. On NEAR’s PoS consensus protocol, there are no miners that prove a computational effort. Rather, validators put up a certain token amount as a stake to prove that they have something on the line. Only then can they validate blocks and collect a block reward.

Capable of processing as many as 100,000 transactions per second (TPS), NEAR Protocol achieves a level of energy efficiency and impact unheard of in other blockchains. NEAR recently launched Simple Nightshade, now in Phase 1 of its roadmap towards a fully sharded blockchain.

This blockchain scaling technology divides computation across parallel “shards,” which will optimize the already super cheap, smashingly fast, and superbly secure platform. A platform that developers have flocked to, given its ever-growing toolset, ease of use, and development funding and support.

Beyond the efficiency and low resource consumption that NEAR has built into its framework with Simple Nightshade, the NEAR Foundation has also committed itself to climate neutral certification. In 2021, NEAR engaged South Pole, a global climate solutions provider based in Switzerland, to assess its climate footprint.

For a decentralized protocol like NEAR, it was essential that the network be carbon neutral as a whole, including the NEAR Foundation, the Core Collective (all employees and contractors working on the NEAR Protocol), and all validators. South Pole’s assessment found that NEAR Protocol generated a carbon footprint of 174 tons of CO2 per year, making it 500,000 times more carbon efficient than Bitcoin, primarily owing to the underlying architecture of the PoS blockchain.

In addition to reducing its carbon production, NEAR has committed to full compensation of remaining exhaust through CO2 offsetting projects. In today’s world, nature still offers the most cost-effective carbon-capturing mechanism — trees.

Which is why NEAR is planting trees in Colombia, Zimbabwe, and the United States through every transaction completed on the platform. And while planting trees helps to mitigate the effects of climate change, NEAR went a step further in establishing strategic partnerships with products like Open Forest Protocol (OFP).

Using NEAR, OFP has developed a data auditing platform to make forestation transparent, accountable, and scalable. They aim to solve the challenges forestation projects face by providing an easy-to-use blockchain platform that measures, reports, and verifies environmental data transparently and affordably.

OFP is backed by a verification methodology that is scientifically uncompromising and easily scalable to a global level. While OFP ultimately chose to build on NEAR Protocol for a multitude of reasons, much of it came down to scalability, accessibility, affordability, and NEAR’s innovative DAO infrastructure. It also didn’t hurt that NEAR’s commitment to sustainability aligned with OFP’s core mission.

While other online marketplaces have canceled plans to launch NFT platforms due to backlash from people who see crypto art as environmentally unethical, NEAR has demonstrated that creating a store and minting NFTs can be climate-friendly as well as affordable, fast, and scalable.

In keeping with its mission of a better planet, the NEAR Foundation announced Green NFTs, a project where environmentally-conscious artists create art that is listed for sale in a store on Mintbase. Half of all proceeds from artwork sales go to a selection of certified climate action projects developed by South Pole.

Whereas gas fees (payments made by users to compensate for the computing energy required to process and validate transactions) on other blockchains have made NFTs a de facto collectable for the wealthy, Mintbase’s platform allows anyone to mint NFTs and sell them at the price they want, even if just for a few dollars. With artists retaining the other half of the proceeds, this project demonstrates that it’s possible to move the needle by linking NFT artworks and their proceeds to real projects with measurable climate benefits.

Working together to mobilize DeFi and climate change

In order to achieve climate goals, COP26 recognizes that “every company, every financial firm, every bank, insurer and investor will need to change.” This translates to public finance for development of infrastructure and private finance to fund technology and innovation. PoS blockchains like NEAR Protocol have already demonstrated their energy efficiency and capacity to unlock sustainable decentralized finance (DeFi) to climate change initiatives.

With a low barrier to entry, anyone with a crypto wallet could potentially invest in climate action, with blockchain smart contracts allowing investors to track and verify the projects they invest in with ease.

This sets the stage for the emergence of a new category of investor, in sustainability and renewables. The overlap between DeFi and climate change initiatives continues to grow as new users and established players alike recognize its potential.

COP26 began on October 31st and continues through November 12th, 2021. Four pillars are key to the success of the conference: securing global net zero by mid century, adapting to protect communities and natural habitats, mobilizing finance, and working together to deliver on these goals.

NEAR Protocol acts as a green ambassador in working to achieve these policy goals, ahead of schedule. At breakthrough speed, a positive narrative is emerging as NEAR writes the future between blockchain and climate change, in the novel space where technology, cryptocurrency, art, and the environment intersect.

About NEAR

NEAR is a high-performance blockchain that is designed to be super-fast, incredibly secure, and infinitely scalable. NEAR’s vision is to create a network that enables people to re-imagine finance, creativity and community in new and inclusive ways.

NEAR is built by an award-winning team of engineers and entrepreneurs to be simple to use, inclusive and good for the environment. NEAR is backed by top VCs such as A16Z, Pantera Capital, Electric Capital, Dragonfly Capital, Coinbase Ventures, Blockchain.com, and Baidu Ventures.

Join NEAR’s community:

Telegram: https://t.me/cryptonear

Discord: https://discord.com/invite/UY9Xf2k

Twitter: @NEAR_Blockchain & @NEARProtocol

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NEAR Team

NEAR Team

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NEAR is the network for a world reimagined. Through simple, secure, and scalable technology, millions are empowered to invent and explore new experiences.