Robert Steinadler, 6 months ago

World Economic Forum is taking a closer look at cryptocurrencies and Web3

The World Economic Forum started last year to take crypto more seriously and made it a topic of its own. It seems that the WEF got the hang of it and realized that crypto is here to stay and will most likely play an important role in the foreseeable future. The impact of blockchain technology is still up for debate and with Ethereum shifting to proof of stake, once again the discussion about Bitcoin being far from carbon-neutral is incinerated.

Why is Web3 particularly interesting to the WEF and how is the organization planning to explore this topic?

The Crypto Sustainability Coalition is investigating

It seems that WEF is mixing all kinds of topics with each other by investigating Web3 technologies as well as crypto and blockchain. It is true that all three are connected, but the major concern of the WEF is the impact on its goals for climate change.

There are three major fields the WEF is interested in and each one has a dedicated work group exploring the topic:

  • Energy usage: The WEFs goal is to get a clear picture of things and measure the actual energy consumption of crypto.
  • Carbon credits and offsets: Blockchain technology is creating innovation and parts that could contribute to fighting climate change. One example is Ripple’s efforts and its partnership with Xange, which is building a secondary marketplace for carbon offsets on top of the XRP Ledger.
  • Potential for climate change: Blockchain technology is also energy-consuming. Especially proof of work. Proponents of Bitcoin often argue that mining can contribute positively, by using up the surplus of energy that would otherwise go to waste or even fostering relationships with green mining farms. The WEF is forming another work group to get a clearer picture of how much crypto can contribute to these aspects.

The crypto sustainability coalition will form these work groups and investigate each field, collect data, and highlight industry standards, according to WEFs last week’s press release.

Who is part of this coalition?

Around 30 organizations will be part of the coalition and contribute to its work. Among them are Avalanche, NEAR Foundation, Ripple, Solana, Stellar, and the Sustainable Bitcoin Standard. The coalition will be part of the crypto impact and sustainability accelerator (CISA) which is a grant-funded initiative that launched in January 2022.

It seems that opinions and expertise across the crypto industry are taken into account. While this is a good sign, it is unclear how much of these projects could use their participation to lobby for their own interests. Ripple stayed neutral when it came down to criticizing Bitcoin, but its executives have been very outspoken and even went so far as to ask for its protocol to change.

When looking at the recent discussion about proof of work it seems obvious that the tide is turning and many interest groups are going against Bitcoin as the biggest and one of the last proof of work-based cryptocurrencies. It will be most interesting to hear the WEFs conclusion on the coalitions work and how it justifies its findings.

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