Crypto Carbon: Blockchain Technology as a Solution to Carbon Offsets
The use of cryptocurrencies and blockchain technology has expanded to the carbon markets, but there are still some questions about whether this emerging technology can actually accomplish the goals it claims to be able to.
As more businesses and individuals seek more effective techniques to ameliorate their impact on climate change, blockchain technology has uniquely positioned itself to support this vision through its technological ability to improve decentralization, transparency, and efficiency, among other things.
In this article, we’ll talk about how the vastly expanding carbon market can benefit from blockchain technology and the cryptocurrencies built on it. We’ll also talk about some well-known cryptocurrency projects that are designed to make carbon trading simple and easy for users.
What are carbon credits?
A carbon credit is a license that entitles the holder to emit a specific amount of carbon dioxide (CO2) or other greenhouse gases (GHG). These are typically transferable instruments that authorities or independent certification bodies have approved to represent a reduction in emissions equal to one metric tonne of CO2 or another GHG.
As a byproduct of conducting business in our current economy, carbon dioxide cannot be completely eliminated from the world and will remain there as long as we depend mainly on burning fossil fuels. The transport of people and goods, for instance, as well as the use of electricity, all contribute to the greenhouse gas emissions that cause our planet to heat up.
Similarly, bitcoin mining consumes a massive amount of energy, even more than traditional gold mining, because bitcoin requires energy-intensive equipment to keep its blockchain network running and secure via the proof-of-work (PoW) mechanism.
Besides, not all blockchains use the same amount of energy as most major blockchains, like Ethereum, which powers the second-largest cryptocurrency in the world and uses a more environmentally friendly proof-of-stake (PoS) consensus mechanism.
The Ethereum Foundation claims that the network’s energy consumption has decreased by about 99.95% since Ethereum recently switched from the PoW to the PoS algorithm.
How Can Blockchain Enhance Carbon Market Trading?
Blockchain technology is an effective tool for increasing ease of access to the carbon ecosystem, primarily by making credit tracking more transparent and effective.
Provision of Data Transparency and Trust
One could reasonably argue that blockchain, in its current state, fosters trust more than any other technology in existence. The potential for aggregating small buyers using a transparent distributed ledger could assist the regular consumer in reducing their environmental impact.
For instance, blockchains can easily communicate with other systems and can be configured to make interactions easier while using a lot fewer middlemen. As a result, the digital signature that every blockchain user possesses, which leaves their “signature” on every interaction with the chain, limits exposure and fraud risk.
Decentralization, one of the key features of blockchain technology, may also usher in a brand-new understanding of trust in a world where a few gatekeepers currently regulate the flow of data, services, and finances.
Elimination of Double-Counting
The term “double counting” refers to a situation in which two parties claim the same amount of carbon removal or emission reduction. This indicates that there are multiple claims being made on a single offset in the haste to secure the environment.
The perfect answer to this is blockchain technology, which makes sure that every claim of carbon reduction is supported by concrete actions and secured on a public ledger with each record given an unchangeable timestamp.
Prevention of Greenwashing
Greenwashing is the practice of companies misrepresenting their environmental commitment in order to lead customers to believe that their products are eco-friendly. A blockchain-supported regulation could require all companies to report transactions and any legal documents on a public blockchain ledger that anyone can view in order to address greenwashing in the carbon market.
However, this will allow all interested parties to view publicly all carbon-related activities on the blockchain for authentication, even if a company uses marketing tactics to fabricate its reports.
Ease of Access for Interested Buyers
Anyone can access cryptocurrencies through the use of blockchain technology, which enables cheap and borderless value transfers. This opens up the carbon market to everyone, while also serving as an effective tool for expanding voluntary markets and increasing their accessibility, primarily through the ease of transparent credit tracking.
Top Crypto Projects Focusing on Carbon Offsets
These are the crypto tokens that primarily aim to make it easier for anyone to buy carbon credits and bring transparency to how those transactions are taking place.
2G Carbon Credit Sa (2GCC)
2G Carbon Credit Sa is one of the most prominent cryptocurrency projects focusing on the carbon offset market. This encompasses both the search for new projects that can be certified for the issuance of carbon credits solely in the voluntary market and the international trading of carbon credits.
The firm is concentrating on a significant innovation that seeks to use the enormous potential of the blockchain to streamline and certify the acquisition and trading processes of voluntary carbon credits on Web 3.0.
As one of the first operators in the world, 2G Carbon Credit Sa has successfully introduced the 2G Carbon Coin (2GCC), which is considered the first mainstream refi solution in the international markets. The token is listed and actively trades on pancakeswap, melegaswap, and some other popular exchanges.
Moss Carbon Credit (MCO2)
MCO2 is another blockchain-based project that makes it simple and safe to protect the environment by offsetting carbon footprints. As one of the most well-known projects, Moss Carbon Credit uses blockchain technology to simplify the offsetting process and ensure the traceability and transparency of the sector.
Much like the 2GCC discussed above, MCO2 incorporates carbon credits into its flagship cryptocurrency token, the MCO2 token, which is listed on cryptocurrency exchanges like Gemini and Uniswap.
Carbon Credit Technology (CCT)
Carbon Credit Technology (CCT) is also on a mission to transform climate action by leveraging blockchain technology to provide access to the world’s most important carbon markets.
The Carbon Credit Token (CCT), a cryptocurrency launched by this project and linked to EUA carbon credits, has made the European Union Emissions Trading System accessible to consumers.
Therefore, users can influence how some of the world’s largest polluters conduct business by purchasing and holding CC Tokens. The project has developed an ecosystem that makes it simple for consumers to invest in European Carbon Allowance, democratizing the existing system that is dominated by market access inequality.
Universal Carbon (UPCO2)
UPCO2 is a token developed by the Universal Protocol Alliance and top voluntary carbon credit companies. Voluntary carbon credits, a well-known asset with no expiration date and simple portability, back this project.
According to Universal Carbon, all living things are directly or indirectly dependent on trees to survive. However, each step of the UPCO2 creation or burning process is transparent to all participants as it is secured, verified, tracked, recorded on a public blockchain, and published on the UP transparency page.
Closing Thoughts
It is now clear beyond doubt that trust can be largely built into the carbon credit markets, made possible by blockchain technology and the aforementioned cryptocurrency projects, which can enforce, encrypt, and maintain it through a dispersed network of computers that continuously operate to ensure its purpose.
To trade carbon credit cryptocurrency tokens like 2GCC, Melegaswap is one of the leading decentralized exchanges, offering safe and fast trading and staking with extremely minimal fees and high APR.
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