The considerable energy and computing power required to process transactions on the blockchain, distributed ledger technology that underpins other business use cases such as cryptocurrencies and supply chain management, scrutinized in recent years.
However, as companies face pressure to meet their economic, social, and governance (ESG) goals, PriceWaterhouseCoopers recently developed a valuation framework to help clients assess the environmental footprint of their blockchain initiatives. Did.
PwC’s toolset helps companies quantify the carbon footprint of blockchain technology at a time when companies are under pressure to balance sustainability reporting, cost savings, and the need for technology upgrades.
Scott Likens, Trust Technology Leader at PwC, said: “As cost-cutting measures start in the new year, companies need to meet their announced carbon reduction targets,” he said, noting that PwC’s toolkit will help companies reduce their carbon footprint without costly assessments. said to help measure, evaluate and reduce
Financial services companies are taking blockchain more seriously, especially to facilitate payments, he noted. As executives consider the impact of his blockchain initiative, more and more attention is being paid to consensus mechanisms, or the process by which blockchain nodes reach consensus.
“What we want to do is provide a highly quantifiable approach to understanding true energy use and the carbon behind it,” Likens said. “We looked at everything from networks, nodes… where the energy came from, that framework is now available to everyone.”
The framework is a mathematical methodology for evaluating blockchains and their consensus protocols, he added. PwC sells a platform that includes an environmental impact methodology. competitive assessment; and blockchain simulation modeling, according to PwC.
Minimizing energy usage is the so-called “merge” From the “Proof of Work” consensus mechanism in September more energy efficient “Proof of Stake” system.
The Stellar Development Foundation, a non-profit organization founded in 2014 to help develop and grow the open-source Stellar blockchain network, has been working with PwC on its blockchain sustainability initiative for a year.
Using a framework developed by PwC, the foundation established a carbon removal commitment to help eliminate the network’s historical carbon footprint dating back to 2015.
“We think [the framework] Denelle Dixon, CEO and Executive Director of the Stellar Development Foundation, said:
She noted that the tool provides greater transparency and allows the application to be extended to other companies.
PwC doesn’t name additional partners using the tool, but other clients interested in blockchain sustainability solutions include “cloud providers, consumer market brands moving to Web3, and financial services.” said to include [firms] Because it is part of the blockchain infrastructure. ”
Looking to the future, PwC said it plans to continue partnering with lawmakers and regulators to put additional guardrails on blockchain and cryptocurrencies.
“For us, it’s about helping guide that regulation…and helping our clients through that,” Likens said. We want to do it the right way.”