Crypto-assets: a societal value for today and tomorrow …
The energy consumption associated with mining crypto-assets is fuelling a debate about whether they consume too much energy – but what is missing from this debate is an appreciation of the societal merit of crypto and its benefit/cost ratio.
An economic freedom to which crypto-assets contribute significantly
According to the paper World Economic forum, of March 22th 2022, we can remember two key points about the use of crypto-assets. Crypto-assets have become essential to viable economic development, investment, economic freedom, access to private property and environmental sustainability. They are essential tools for much of the world’s thriving population. Mostly held by people in emerging countries, they serve as a response to social injustices.
In emerging countries, unstable monetary systems and currency devaluation are driving many people to adopt crypto-currencies in order to preserve savings, send and receive remittances, purchase basic goods and conduct business transactions. Crypto offers economic freedom to people in countries suffering the most from financial instability.
Regarding the debate on the energy consumption of crypto-assets, we already know that the ecosystem is moving towards solutions that reduce environmental impact.
The crypto-asset industry contributes to sustainable development
As the climate and crypto-currency debate continues to evolve, industry leaders, have begun to develop solutions, such as KlimaDAO, a decentralised autonomous organisation that provides liquidity through tokenised carbon credit pools, Filecoin Green, an initiative led by the Filecoin Foundation aiming to make its blockchain carbon-neutral and ultimately carbon-negative, or DeepMarkit, which is building a platform for minting carbon credits in #NFTs.
The techniques involved could do more than just reduce the emissions from crypto hashes. By learning how to track and trace carbon in crypto networks or reduce consumption with energy-efficient validation techniques, e.g. Proof of Stake (PoS), these initiatives could help other industries meet their climate goals more quickly, positioning crypto assets as leaders in sustainability.
Crypto-assets will become key players in propelling a transparent, verifiable and achievable shift towards environmental sustainability, as well as solving the lack of economic freedom for the 1.2 billion people living under hyperinflation of their national currencies. Proof of work”, which is the algorithmic method of distribution “Proof of Work” (PoW), burns energy in order to get new crypto-currencies in return. This energy consumption is not accidental; it has a specific purpose, the security of transactions and the resilience of the network.
In view of the growing number of crypto asset holders, it is logical to think that this meets a real need and that their development is not going to stop since the number of users is synonymous with efficiency.