Cardano, a digital currency, has been recognized for its environmental sustainability, reducing annualized carbon emissions by 250.73 tons, but urges for an upgrade to renewable energy sources.
The Crypto Carbon Ratings Institute (CCRI) has worked together with the Cardano Foundation to create an important report about the Cardano blockchain’s effect on the environment.
This report is a response to new rules called Markets in Crypto-Asset (MiCA), which require a thorough look at how cryptocurrencies impact our planet. The report gives a lot of information about how well Cardano is doing in being environmentally friendly.
Significant Reduction in Energy Consumption Compared to Proof-of-Work Blockchains
The report shows that Cardano uses much less energy than other digital currencies like Bitcoin. Cardano’s system, called Ouroboros, only uses 704.91 megawatt-hours of energy each year. This is very small compared to the huge amount of energy that Bitcoin’s system uses, which can be as much as what a whole country uses.
The report also details that total annualized carbon emissions for Cardano are estimated at 250.73 tonnes of CO2 equivalent, with a carbon intensity of 356 grams of CO2 per kWh. This metric sheds light on the energy mix used by the network, suggesting a balanced use of renewable and non-renewable resources.
However, the report calls for a shift towards more renewable energy sources to further reduce the network’s carbon intensity.
Waste Production and Environmental Impact Assessment
The new MiCA rules pay special attention to how much waste is created, especially the kind from old electronics. Every year, the Cardano network ends up with about 8.26 tons of this kind of waste, and more than half of it isn’t recycled. This shows that Cardano needs to improve how it handles its electronic waste.
The CCRI report also examines the impact of ADA’s operations on natural resources, including the extraction and use of critical raw materials necessary for hardware production. These materials are often limited and carry high environmental and economic costs.
Additionally, the network’s energy consumption indirectly influences water usage, particularly in areas reliant on non-renewable energy for power generation.
Transparency in Sustainability Reporting Sets a Precedent
Starting in June 2023, the new MiCA rules mean that companies dealing with digital currencies have to be open about how their work affects the environment.
ADA has gone beyond just following these rules, they’ve shared a lot of information about their environmental efforts, which helps everyone see how transparent they are being. This is setting a good example for others in the digital currency world.
The report tells us that Cardano has 3,147 computer points (nodes) and handles 19,530,055 transactions every year. These numbers help us understand how big Cardano’s system is and what effect it has on the environment.
On average, each computer point uses 25.576 watts of power, adding up to 80.47 kilowatts for all of them together. This is how much power Cardano needs to work.
An expert group (CCRI) looked at how eco-friendly ADA is, and it looks good for new rules about cryptocurrencies and the environment (MiCA). ADA uses way less energy than other cryptocurrencies, which is better for the planet.
But there’s still room for improvement, especially with how they handle old computer equipment and the kind of energy they use. If Cardano can fix these things and keep being open about their impact, they could become a leader in green crypto technology.
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