Decarbonising crypto: how do we get there? In conversation with Zumo
By Gaia Lamperti
Bitcoin uses more energy than many countries, and this is no news. According to the Cambridge Center for Alternative Finance (CCAF), Bitcoin currently consumes around 110 Terawatt Hours per year, equal to 0.55% of global electricity production. But how much energy does a monetary system deserve to consume? Where do we draw the line?
This complex question is linked to our society’s priorities and a very polarised debate. Contrary to sensationalist headlines, crypto is becoming an essential part of developing a carbon-neutral energy grid and has made it economically viable to invest in, develop and build renewable energy power generation. More and more companies in the space are focusing on this aspect and working towards an actionable strategy that can decarbonise their crypto activities.
IBS intelligence discussed this approach and the new opportunities it opens with Kirsteen Harrison, an environmental and sustainability expert, advisor to the board of crypto wallet Zumo.
How did you get involved with the sustainability side of crypto?
I actually don’t come from crypto or even a tech background. I’m a sustainability and carbon expert, and all my career has been focused on sustainability, carbon, and reaching net zero.
As an environmental specialist, I work with various companies and sectors. I got involved with Zumo really early, and we had an opportunity to bake this in from the beginning. So, my background gives me an interesting perspective within the crypto sector because while blockchain is a big part of the solutions, there are quite negative perceptions around it in terms of its environmental impact.
How has the journey with Zumo been so far?
Zumo was founded in 2018, and one of the first things that we did was to find a charity partner, which allowed us to progress quickly with our net zero strategy.
About a year and a half ago, we launched our wallet, which supports different kinds of cryptocurrencies, and we can integrate several blockchain-based technologies onto our platform.
As my involvement with Zumo is primarily around reaching net-zero, I spend much of my time developing a strategy to account for our own carbon footprint. This has led us to formally launch our net zero strategy in October 2021, which commits us to be net-zero for all blockchain-related emissions by 2030.
The strategy is in line with the Crypto Climate Accord, an industry-led organisation that is looking to accelerate the industry’s progress toward net zero.
What is Zumo’s roadmap to decarbonise crypto?
Technologically speaking, it’s quite easy to decarbonise crypto. Contrary to many other sectors that have got longer timescales on their targets, with cryptocurrencies, we’re looking at electricity consumption, and we know how to move to renewable electricity.
At Zumo, we are seeing that we really have an opportunity, as a sector, to drive the use of renewables and showcase what sector-wide decarbonisation can look like.
Our strategy follows three key pillars to reach our net-zero target:
- Lower the impact of our own operations
- Carefully choose the suppliers and blockchains that we work with
- Positively influence the sector and the community we serve
The absolute first step is to decarbonise our own use of the Bitcoin network, primarily because it’s the most significant electricity user of all cryptocurrencies. If we address that, we will have made a very significant dent in it.
We have launched our Zero Hero Project, which is purchasing renewable energy certificates that match the electricity consumption in mining Bitcoin purchased on our app. So, we match any electricity used in the Bitcoin mining process with verified renewable electricity and this makes it potentially very easy for the cryptocurrency sector to decarbonise because we don’t need to wait for it to happen at the mining level, but it can happen at the wallet, platform exchange level or the exchange. It could also occur within our users or the investors’ community.
In support of the last pillar, we have recently published our Decarbonising Crypto report, and we’re releasing a whitepaper over the next few months that will include key considerations on the work we’ve done so far in that direction.
It sounds like educating the community is a key part of the process…
Absolutely. For example, our recent report was written on the back of a roundtable event that featured industry experts bringing together different perspectives and knowledge to provide a very open and reasoned debate as to where the sector is currently at.
We set out to present both sides of the argument to try and look at the data and the evidence that we have as a hopefully trusted source of information. So, we looked at different methodologies to quantify the problem and discussed topics like how to take responsibility for our own slice of the pie and how to define a benchmark.
I think public consciousness is growing to realise that a carbon footprint is more than electricity consumption and that collaboration within and outside the sector is needed to move forward.
What we can do at Zumo is to become a driver for the use of renewable electricity. And the amazing thing about renewables is that the more you use them, the cheaper they become, so here we have a huge opportunity to help drive down the cost of renewables.
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