Algorand: The Most Climate-Conscious Blockchain

7 min readApr 25, 2022

Welcome to Parea Capital. In this special Earth Day article, we will be talking about Algorand. In particular, its commitment to carbon neutrality, sustainability, and the fight to protect the environment. If you don’t know who we are, check out this article to get acquainted with the best community-based crypto investment club in the Algorand ecosystem.

We believe that climate change is one of the most pressing issues we face right now. Algorand was built to be green from the beginning. Silvio Micali explained, in 2018, that his focus was on creating sustainable, next-generation technology for our Earth. Because of this and our belief that Algorand’s blockchain technology is the most environmentally conscious, our decision to primarily invest in the Algorand ecosystem was made much simpler. We want a better world, and Algorand is making that happen!

AlgoGreen

Algorand showed the world its commitment to being green by turning Times Square off for an hour for World Earth Day. Staci Warden, who is the CEO of Algorand Foundation, wanted to illustrate the environmental costs of Times Square billboards. Simultaneously, this move helped educate the masses about Algorand — especially how it is not subject to the much-held opinion that blockchain technology is carbon-intensive and bad for the environment.

Times Square billboard ad saying: “Algorand is a carbon-negative blockchain, built sustainably from the beginning. Today we’re doubling down, creating more out of less. This Earth Day. Save Energy. Unplug. Reconnect with our planet. Tomorrow, build a greener future on Algorand.”

“We wanted to make a bold statement on a large platform to educate the general public that advances in blockchain technology like those employed at Algorand have made it more green and sustainable than the first generation proof-of-work blockchains, and definitely more green than traditional banking and finance rails”. (from Coindesk, April 18 2022)

An hour of Times Square advertising costs roughly 6,500 kilowatt-hours of electricity — the same as around 350 million transactions on Algorand. By turning off Times Square, and saving that energy, this move most definitely has turned heads towards the benefits of using the greenest blockchain, Algorand.

The Greenest Blockchain

So how is Algorand green? There are many elements to how Algorand continues to commit to carbon neutrality and sustainability. They committed to carbon negativity by offsetting the carbon costs, donating heavily to environmental causes, and housing some of the organisations on the cutting edge of climate science. This is without even mentioning the inherent greenness of the blockchain.

Carbon Offsetting and Environmental Charity Work

Algorand promised carbon negativity on the last Earth Day, and so, they partnered with ClimateTrade. They have been working together since then to create a sustainability oracle that records Algorand’s carbon footprint on-chain. ClimateTrade is a marketplace where users can offset their carbon footprint. With ClimateTrade, Algorand locks carbon credit as an ASA (Algorand Standard Asset) into a green treasury so that its protocol keeps running as carbon-negative.

Recently, the Algorand Foundation partnered with Climate Ride, a climate-focused non-profit. They are planning a five-year initiative to promote community-powered environmental health and sustainability. The Algorand Foundation is committing $15M over five years by matching up to $2.5M yearly that is raised by Climate Ride participants. They are also committing $500K annually for the program’s expansion.

The Green Technology

Silvio Micali has always committed to creating green technology and Algorand is proof of that. The consensus mechanism used to validate transactions, Pure Proof-of-Stake, inherently leaves a tiny carbon footprint.

April 2021 graph showing algorand (0.000008 kWh per transaction) has much lower energy consumption that bitcoin (930 kWh per transaction) and ethereum (70 kWh per transaction)

Algorand’s Pure Proof of Stake is not derived from the computational Proof-of-Work blockchains or the inefficient Proof-of-Stake or Proof-of-History ones either. It only needs a minimal amount of energy to operate and with carbon-neutral cloud energy sources for Algorand’s staking and relay servers, it makes the network much more efficient and sustainable.

april 2021 graph showing how algorand is set to have even less energy consumption as volume and upgrades continue

NFTs are often seen as one of the main culprits of the rising carbon costs to blockchain due to their relevance in the mainstream news. But Algorand calculated in April 2021, with the assumption of full blocks and 4000 validators and US average electricity source emissions of 0.50 kg of CO2 per kWh, that minting an NFT on Algorand potentially costs roughly 0.0004 g of CO2 per NFT. For an idea of the scale, for an individual, the carbon footprint of viewing one hour of TV through a streaming platform is about 55g of CO2 in Europe.

If Algorand’s base design wasn’t green enough for you, recently Algorand announced plans to integrate the cost of carbon offsetting within the transaction fees. They are implementing a new smart contract that takes a percentage of each transaction fee automatically to purchase verified carbon credits at ClimateTrade.

The dApps

Whilst the Algorand’s blockchain itself is carbon neutral through its own carbon offsetting, the ecosystem also supplements its sustainability and willingness to fight climate change. Decentralised apps, such as ClimateTrade, Sea, PlanetWatch, and Global Carbon Holding, support Algorand’s mission to save the planet from climate disaster. Green-minded organisations have a clear home in Algorand.

SEA is trying to decentralise the process of gathering, processing, storing, and distributing environmental data. They also are supporting emerging environmental research and activism, as well as the work of front-line environmental protection organisations. We, Parea Capital, are proud to be investors in this project. For a more detailed profile on Sea, please keep your eyes on our Twitter over the next few weeks, as well as here on our Medium as well!

PlanetWatch is built on Algorand and aims to improve global air quality monitoring. They have a global network of low-cost air quality sensors, which both organisations and individuals can install. The sensors are then validated, filtered, and then displayed as data in real-time online or through the mobile app.

Global Carbon Holding uses Algorand’s blockchain technology to tokenise carbon credit assets in Asia and is creating a global, transparent marketplace to purchase certified carbon offsets. They are also committed to developing more carbon credit and renewable energy projects around the world.

We have already mentioned ClimateTrade’s marketplace before and their role in assisting Algorand’s carbon offsetting. Their main objective, however, is to help companies become more sustainable by offsetting CO2 emissions and financing projects that fight climate change.

Views from the Parea

Climate change, and the impact it has on our planet has always been a priority for us, Parea Capital, to tackle as a collective. By that virtue, Algorand seemed like the best blockchain to realise that goal and still remain climate-conscious. In fact, Algorand has proved to be the greenest blockchain! We are proud to be $ALGO supporters and investors in an ecosystem that is developing solutions to some of the biggest problems in the world!

“It feels good to be backing a “good for the environment” blockchain, especially with so much said about the environmental costs of blockchain. I’m glad Algorand has found a way to take blockchain technology and improve it considerably, whilst also making it sustainable!”

“Without Algorand’s green technology, I wouldn’t have felt comfortable investing in the blockchain space. When you see the cost of Proof-Of-Work, in the precarious position we are all in, it makes you shudder. Silvio Micali has solved this, and now we can go about creating new, more equitable structures for society — without the destruction of our only planet (not all of us are Elon Musk!)”

Next Week from Parea!

Follow us, Parea Capital, here on Medium, on Twitter, or on Instagram to keep up to date with what we’re doing. Our next article will be on Algomint, a cryptocurrency minter that will have cross-chain functionality and facilitate the future of DeFi, for our series, Parea Profiles — you won’t want to miss this one!