According to the Cambridge Bitcoin Electricity Consumption Index , bitcoin mining consumes 135 terawatt-hours of electricity per year – more than is consumed in a year by the entire country of Norway.
Ethereum is in the process of transitioning to its own PoS algorithm, which, according to the Ethereum Foundation, will cut the network’s energy use by ~99.95%.
Since then, several international bodies have emerged to regulate the registration and sale of carbon credits.
It then incorporates those credits into a popular token, MCO2, which is listed on major cryptocurrency exchanges like Coinbase and is marketed as a way for crypto investors to help preserve the planet.
When it launched in October, Toucan made waves for a fruitful, albeit controversial partnership with KlimaDAO – a new blockchain protocol built and governed by a pseudonymous community of KLIMA token-holders.
Just as in the traditional carbon credit system, Toucan envisions on-chain retirements as a way for companies and individuals to offset their carbon footprint.
Even with a blockchain-based open marketplace, Toucan’s TCO2 tokens remain difficult to trade since each token represents a specific project.
Toucan users can add their TCO2 tokens to pools containing a mix of TCO2 tokens representing similar projects.
The first pool introduced by Toucan was the Base Carbon Tonne , which accepts a wide variety of credit types issued by the Verra registry.
The logic for more expensive carbon is simple; if carbon is more expensive, companies and governments should pollute less since it will cost them more to offset their emissions.
At a high level, Klima incentivizes people to sweep as much carbon off the market as possible by locking it up in their treasuries.
For a little while, Klima’s strategy for pumping the price of carbon was working.
Meanwhile, KlimaDAO was printing out new KLIMA tokens by the ton for its stakers – people who locked up their tokens in smart contracts where they can’t be sold .
While the Klima treasury is no longer growing at the rate it was before the crash, it has still absorbed an enormous amount of carbon credits – representing 20 million tons.
“They call me and Gold Standard ‘dinos’ … they say we don’t know what we’re talking about,” Leugers said.
Aside from the credits that were known to have been fraudulent, “the dominant assets that make up BCT are, like, these crappy Chinese natural gas grid replacement projects where they’re replacing coal with natural gas or hydro,” he told CoinDesk.
“The carbon value chain is , that’s just a reality,” he said.
Some ReFi founders point to the idea of a “meta-registry” – a long-term vision espoused by Toucan, Regen, and other players in the carbon-bridge space – whereby anyone can add a carbon credit to the blockchain.
“It’s really more difficult than people assume to ensure quality,” Gold Standard’s Leugers explained.
On-chain carbon is not, as some skeptics might claim, a grift meant to exploit environmental fears in exchange for personal profit.
Both movements herald the “trustless” nature of blockchains as a way to remove power from gatekeepers, thereby improving access and increasing transparency.
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