expressed opinion entrepreneur Contributors are themselves.
Blockchain storage is quickly becoming a credible competitor to cloud computing. One clear advantage blockchain offers is that its distributed storage nature makes it a more secure form of storage than storing data in the cloud.
But blockchain technology has been plagued by massive energy usage and a large carbon footprint. Cryptocurrencies in particular have been a sore point for environmentalists.Bitcoin, for example, is known for spending More than a year of electricity than the entire country.Just when a United Nations agency just reported that The past eight years have been the warmest on record Records In modern times, the future of energy-intensive blockchain technology may be inextricably linked to its ability to offset its carbon footprint.
Related: Blockchain Is Everywhere: Here’s How To Understand It
What’s preventing an environmental, social and governance (ESG) shift for blockchain companies?
As the debate rages around responsible consumption, companies including the historically ESG-resistant FAANGs have now turned around and committed to developing clear targets around their ESG goals.morgan stanley even Announce ESG-focused metrics could dictate investments over the next decade to understand a company’s growth potential.
But while investment choices are driven by ESG metrics, it’s worth remembering that ethical choices may be easier for some than others. While some of the largest multinational corporations such as Apple and Google have been able to move to ESG with relative ease, the same has not been the case for blockchain-focused companies, even the more established ones.
With institutional investors scrutinizing ESG reporting more than ever, they still cannot easily participate in most crypto projects. In turn, this affects the overall momentum of widespread adoption of mainstream blockchains. Companies with dozens or hundreds of servers in a fragmented ecosystem haven’t had time to commit to ESG.
Related: How Blockchain Can Help Fight Climate Change
The blockchain industry needs to focus on a wider audience
Blockchain, and especially cryptocurrencies, with their anti-establishment flavor, have found and grown a core niche market, namely 94% of GenZ and younger millennials. But for the technology to gain widespread adoption and investment, it needs to appeal to a wider audience.
It is well documented that young investors More likely Make riskier investments — like cryptocurrencies, which are known for their erratic price swings. This type of risk is not attractive to those looking to save for home, family or retirement; therefore, many middle-aged and older consumers have no interest in it.
Even many of Gen Z and Millennials, who are considered to be most affected by climateChosen not to participate in blockchain technology due to its environmental impact.
Such a small audience is not suitable for large companies or those looking to make huge profits investing in the technology, leading to a stall in the development of greener initiatives as many companies in the space may just be looking to make ends meet.
Blockchain technology is needed to prove its use cases beyond cryptocurrencies. This image overhaul is likely to happen over time as blockchain storage gradually gains broader market appeal as a more secure alternative to the cloud.
Related: Solving the Number One Problem of Our Time: Using Blockchain Technology to Scale Up Climate Action
A greener blockchain is possible
The blockchain industry is at a stage where it is on the verge of global adoption. It can easily add thousands of users per month. But blockchain companies need funding to secure ESG initiatives and appeal to the widest possible audience, moving them beyond nascent technologies and into the mainstream.
Solutions for building an inclusive and sustainable future for blockchain technology are already starting to emerge in projects such as ClimateTrade’s Green Treasury Initiative, which increases the number of carbon-negative blockchain use cases.Ethereum plans to replace its energy-intensive equipment, which could reduce its energy consumption 99.95%. But offsetting the carbon impact of blockchain networks may remain an ongoing challenge for the industry as it seeks mass adoption.
Smaller blockchain companies will need sufficient funding to find relevant solutions to maintain a positive impact on the environment. If we want to reap the benefits of blockchain without harming the environment, we need to invest in blockchain and blockchain companies so they have the money to find these solutions. If you want to reach a larger audience, you must focus on ESG initiatives or join hands with well-known cloud companies that are leading in ESG.
