Algorand aims to become not only carbon neutral, but also a carbon negative blockchain project in partnership with ClimateTrade. Developers Algorand and ClimateTrade will build a network of oracles that will record the level of carbon emissions from consumers. The resulting measurements will be recorded on the blockchain and transferred directly to smart contracts.
Cosimo BASSI, Solution Architect at Algorand, modeled the environmental costs of blockchain technology. According to his report, a single bitcoin transaction requires 930 kWh and an Ethereum transaction requires 70 kWh. In comparison, the Pure Proof of Work consensus model used by Algorand allows the network to process transactions with energy consumption of just 0.000008 kWh each with 4,000 active validators.
Algorand and ClimateTrade expect to set up lending and compensatory financing for businesses through smart contracts in the future, in proportion to the reduction in carbon emissions.