Phaeton Answers Elon Musk’s Call on Sustainability.
A recent tweet by Elon Musk “We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,”
ENERGY EFFICIENCY
The design and development intent of Phaeton blockchain is to address the issues of the amount of energy required to mine cryptocurrency like Bitcoin. Experts in the Blockchain industry report that it takes 10 minutes to mine one Bitcoin. At 600 seconds (10 minutes), it will take 72,000 GW (or 72 Terawatts) of power to mine a single Bitcoin.
In our previous article, “Phaeton Protocol Core and Energy efficiency”, we explained that Bitcoin utilises The Proof of Work (PoW) consensus algorithm to make Bitcoin function. The PoW consensus works on the principle of mining wherein a computer node, connected to the Blockchain, solves a complex mathematical puzzle to validate a transaction.
Phaeton’s solution
In addressing energy efficiency, Phaeton Blockchain is based upon the Delegated Proof of Stake plus Delegated Byzantine Fault Tolerance (DPoS+dBFT) consensus algorithm. Unlike the proof of work algorithm that requires validation of a transaction through solving a complex mathematical puzzle, the delegated proof of stake consensus algorithm implements real-time voting to select a validator.
A node is selected from the whole Blockchain network at random (through voting by other participants), and this node is responsible for creating the next block. However, this validator is not just anyone on the Phaeton Blockchain but is selected from the nodes who own Phaeton’s native token, PHAE. Therefore, this process allows the Blockchain network to maintain unquestionable governance.
CARBON CREDITS
In line with Phaeton’s social impact policy and sustainability policy, Phaeton has recently signed a Joint Venture agreement with ESG Pty Ltd, a Carbon Farming Property, to create a sidechain application tokenise carbon credits. The joint venture entity is in the throes of creating an NFT Marketplace Platform where ACCU (Australian carbon credit units) are tokenised into Tangible NFTs sold and traded by the public.
Current CO2 emissions are estimated at 55 billion tonnes annually. Even if humanity were to cut this to zero in the next decade, estimates put the long-term warming impact at 1.5 to 2C, which will have dire consequences on our way of living through changes to sea level, food production, and public health. The rate of increase in emissions far outstrips the pace at which we can incentivise reduced emissions. Globally, our ability to generate viable carbon credits is less than 25% of our current annual pollution levels, and there are decades of backlog.
A carbon credit is a digital certificate that proves that an organisation, or environmental project, has compensated for the emission of one tonne of CO2 in a given year. There are two main types of carbon credits: regulated and voluntary. The regulated market consists of credits generated and purchased under cap-and-trade or emission-control regimes, and that expire if unused. Voluntary credits are perennial, expiring when an individual or organisation decides to spend the credit to offset a unit of pollution. While the regulated market represents the lion’s share of the carbon credit market today, significant challenges are going forward with the regulated sector.
By tokenising Carbon Credit Units into TNFT, we can accelerate the trade of emission-reduction credits. It is achieved through global access, real-time transparency, instant settlement, increased liquidity, and numerous other synergies that come from being tied to the greater cryptocurrency ecosystem, such as liquidity and the ability to self-custody. Each ACCU NFT represents a one-year tonne of CO2 emissions averted, substantiated by the Commonwealth of Australia or the Clean Energy Regulator. Each token can be “burned” at any time to offset one tonne of carbon emissions. Until burned, a carbon credit can be held and traded.
CONCLUSION
As companies and investors become more focused on climate and sustainability, the more prominent cryptocurrencies such as Bitcoin, Bitcoin Cash, and Ethereum requiring vast energy create colossal carbon footprint is a significant problem. Blockchain has the power to change our world for the better in many ways. Therefore, Blockchain developers need to address this global problem. At Phaeton, we believe we are moving in the right direction.
