Enrex And The Job of Making Blockchains, Crypto Go Green
Since the emergence of Bitcoin in 2009, the number of cryptocurrency across the world has skyrocketed to more than 10,000. Enabled by blockchain technology, digital assets which include cryptocurrencies, non-fungible tokens have created a new league of the wealthy, facilitated innovations and many believe it has given them freedom; one in which third party regulators are excluded from financial transactions.
Indeed, despite the benefits of cryptocurrency, a major bashing point is its environmental sustainability. Critics believe that cryptocurrencies, including Bitcoin, that use the proof of work mechanism, have a high carbon footprint. This is because transactions are validated by computers that require intense energy to solve complex math problems.
There are at least one dozen proof of work cryptocurrencies. Bitcoin’s carbon footprint, alone, hints at how cryptocurrencies that use the proof of work mechanism impact the environment.
As of October 25, 2022, Bitcoin’s energy consumption per year according to Digiconomist was estimated to be 132.42 TWh, comparable to the power consumption of Argentina and has resulted in a carbon footprint of 73.86 Mt Co2, comparable to Colombia’s carbon footprint.
Increased emission of greenhouse gases over time across the world has resulted in floods, droughts, forest fires and heat waves. The United Nations progress assessment on countries’ past emissions commitments published in October 2022, noted that Earth was on track to become warmer by an average of 2.1 to 2.9 degrees celsius by 2100 compared to preindustrial levels and higher than the goal of 1.5 set by the Paris Agreement in 2015, The New York Times reported.
Human activities such as electricity and heat, agriculture, transportation and manufacturing have resulted in the emission of greenhouse gas. According to the International Energy Agency, the biggest increase in C02 emissions by sector in 2021 took place in electricity and heat production which increased by more than 900 Mt and accounted for 46 percent of the global increase in emissions since the use of fossil fuels increased to help meet electricity demand growth.
Cryptocurrencies and blockchain technologies are becoming widely used. The growth is, however, likely to continue. The global cryptocurrency market was USD 910.3 million in 2021 and is projected to rise to USD 1902.5 million by 2028 at a CAGR of 11 percent. Cryptocurrency needs to grow, but this need will have a devastating impact on the environment if nothing is done.
Realising the consequences, the crypto climate accord (CCA) was created to de-carbonise the global crypto industry through climate stewardship and helping the industry attain net-zero greenhouse gas emissions by 2040. The accord is supported by more than 200 companies and individuals with some of them providing services that help projects and protocols in Web3 to ensure their operations do not leave the environment destroyed.
Enrex, The Environmental Crypto Project Cleaning After Crypto
Enrex is a platform created to help organisations, including those that deal in cryptocurrency and other digital assets to adopt environment friendly operations. It also provides trading services for environmental commodities such as carbon credit.
Carbon credit is an offset mechanism in which businesses invest in other projects that reduce greenhouse emissions when they are purchasing carbon credits. Carbon credits are a way to reduce your carbon footprint caused by unavoidable emissions. The United Nations 1997 Kyoto Protocol which was signed by 150 countries birthed emissions trading.
Carbon trading takes place in compliance and voluntary markets. Compliance markets are a product of a nation’s obligation to cut their emission or keep it within an acceptable threshold. Voluntary markets involve efforts by companies and individuals to reduce their carbon footprint as a way of improving their reputation or committing to protect the environment.
Although the environmental commodities market has been existing for 25 years, participating in it could be cumbersome and there is insufficient information.
The information regarding these instruments, how they work, how you can measure your footprint, is so scarce and difficult to find on the internet if you are not within the industry, Julius Grigaitis, chief operations officer of Enrex, said at an AMA by Dreamboat Capital about shortcomings in the traditional environmental instruments markets.
“The processes are slow, the information is difficult to find (or sometimes even confusing/contradicting), and there is almost never clear and transparent pricing.”
Enrex was created to remove these challenges. It provides solutions to consumers’ desire to be environmentally sustainable. Enrex’s process of offsetting carbon begins with helping consumers calculate footprint and providing peculiar solutions. It also provides access to renewable energy certificates, carbon allowances and carbon credits in the secondary market. There is a corresponding environmental project that backs the issued certificate, Enrex said.
We are working with forest planting NGOs for those consumers who have a preference to plant trees and receive credits afterwards, Grigaitis said at Delta AMA series.
For companies operating in the crypto industry, dealing with traditional trading houses could be tasking because cryptocurrency is not generally accepted and know-your-customer procedures are extensive. Enrex’s acceptance of cryptocurrency as a form of payment and provision of carbon offsetting application that is free from know-your-customer requirement sets it apart from traditional markets.
The local governments typically regulate and oversee the issuance of environmental instruments. As we are not creating them, but providing access as a secondary marketplace, we do not fall under heavy restrictions or challenges, Grigaitis said.
Grigaitis is convinced that Enrex is scalable. Its scalability is anchored on plans to automate its procedure using API to automatically offset energy. Businesses will be able to integrate the API which will send requests to Enrex to provide necessary instruments and amount that ensures the business’s transaction is covered with green energy.
Enrex’s native token which the firm says has primary utility could also point to the scalability potential of the company. The token which is powered by the Solana blockchain is used as a means of payment. In 2021, Grigaitis said Solana was selected to power its token because it had quick transaction and low fees which results in low energy consumption.
…fits our framework and methodology the most. Also keeping in mind that Solana foundation is quite environmentally conscious in general, he said.
Holding $Enrex could also prove to be worthwhile because the token is also built to have staking features which will help early adopters to get a perpetual offsetting plan. Staking returns would cover offsetting needs for the holder of the token, the project said.
The demand for Enrex token grows with demand for environmental instruments, so even when there is a bearish market in crypto, the environmental market demand is upward sloping due to increasing corporate and national sustainability targets up to 2050, Grigaitis said.
On the surface, Enrex’s service could portray it as protecting the environment. This notion does little to capture everything it does. The value of Enrex transcends climate protection to ensure that businesses and individuals that use cryptocurrencies that could cause damage to the environment get less pushback from those who demand that nature should be protected.
Cryptocurrency has come to stay and it will thrive, but the growth will be rough and hostile if Enrex does not exist to assist it clean up the environment. Enrex gives cryptocurrency growth and expansion a soft landing.
Imagine the endless possibilities if companies could integrate Enrex into their systems, he also said.