The world of cryptocurrency is growing by the minute. Yet, one of its biggest problems is still not being adequately addressed, namely, the energy consumption of transacting across many of the biggest blockchain networks in the industry. This issue, which has grown exponentially over the past few years, shows no signs of slowing down and continues to cause environmental degradation along the way.
Out-of-control energy consumption in the cryptocurrency world is well-documented, with some of the biggest coins like Bitcoin and Ether being the biggest culprits. This is because a majority of cryptocurrencies operate under a proof-of-work (PoW) consensus mechanism which requires computing extremely energy intensive mathematical problems in order to verify and secure transactions on the blockchain.
Today, the total energy consumed by the Bitcoin network in one year can power more than 6.7 million homes in the United States alone. Some states want to tax Bitcoin mining as a result of the increase in electricity costs to residents in areas where mining is occurring, and the country of Iceland is likely to use more energy to power cryptocurrency mining than for powering homes this year. These are all signposts of the negative environmental impact cryptocurrencies are having on the world, a problem which needs addressing before it’s too late.
Creating Sustainability through GEAR
The utilization of blockchain technology should not be synonymous with environmental degradation and high energy costs. This is why GEAR is creating a profitable solution which allows blockchain to build a greener, more sustainable future.
According to the company’s whitepaper:
“GEAR will serve the Green Energy and environmental sustainability sectors by investing in Green Energy real assets and incubating innovation by promoting, encouraging and financing research and development into new renewable technologies and sustainable practices.”
Building a Closed-Loop Network
As a self-sustained ecosystem, GEAR is financing the expansion of its network of green energy farms, data centres, and PoS masternodes through capital within its network, eliminating any need for financing outside of its own network. This closed-loop system will allow the project to achieve continuous growth while being completely self-sustaining.
GEAR will reinvest up to 40% of all income generated by the network to self-finance the network’s continued operations without the need for external financing. Part of this reinvestment will go toward building additional green energy mining farms, while other pieces of the reinvestment will go to supporting more energy efficient forms of cryptocurrency transaction verification such as proof-of-stake (PoS) blockchain networks.
Supporting Greener Solutions
GEAR is offering its hash-power generated by green energy to be deployed on energy intensive PoW networks, creating a cleaner and more environmentally friendly solution. This hash-power can be applied to any PoW blockchain and is done so via a consensus vote by GEAR token holders.
Additionally, a minimum of 10% of the income gained through verifying transactions on PoW blockchains goes to supporting renewable and green energy by providing funding to world-leading research institutions and partners leading green energy initiatives through the GEAR Capital Investment Fund.
GEAR Capital will act similarly to a traditional venture capital fund, and therefore has the potential to drive additional revenue streams for GEAR through the sale and/or licensing of green technology innovations in which the company has ownership and protection rights, further supporting its self-sustaining network. The fund is set to invest in projects working towards energy efficiency, energy conservation, fuel switching, carbon capture, and battery chemistry.
Shaping Cryptocurrency Mining and Beyond
GEAR is supporting big changes in cryptocurrency mining and blockchain consensus. Its closed-loop, self-sustaining network has the potential to make a sizable positive impact on the environmental decay exhibited by PoW mining to date. GEAR may be the only hope for cryptocurrencies, and their underlying blockchain technology, to give back to the environment in a positive way.