Public blockchain and distributed ledger technologies have ushered in a new era of the web — we now have infrastructure that enables programmatic trust in online environments between individuals, organizations, corporations, and governments. Nearly every industry is primed to benefit from this technology, including financial services, healthcare, social networking, supply chain, sustainable energy, and more. It’s akin to the transformational power of the internet that we’ve seen over the past 25 years.
Emerging technologies force us to consider the adverse effects they might have on our world if left unchecked. Artificial intelligence, for example, begs for considerations on privacy and surveillance, bias, and moral judgment. Or social networks, which must reckon with the adverse effects on society through misinformation, personal data marketplaces, and surveillance capitalism. With the increased adoption of public distributed ledgers and, more specifically, proof-of-work mining currently used by both Bitcoin and Ethereum, the industry is obligated to consider the imminent threat of unsustainable energy consumption and environmental consequences.
The Hedera network’s underlying technology, the energy-efficient hashgraph algorithm, and proof-of-stake consensus mechanism have laid a solid foundation for relatively sustainable network operations. But the Hedera Governing Council members recognized that more could be done.
Hedera Hashgraph has adopted environmental sustainability as a core value and is officially committed to carbon-negative network operations by purchasing carbon offsets quarterly, with amounts determined by the third-party assessment provider Terrapass. This decision was made by members of the Hedera Governing Council after careful deliberation, and we are hopeful this decision serves as inspiration for other public networks to adopt sustainable operating practices.
The verification report generated by Terrapass validates carbon captured through the Lebanon Refuse Authority Landfill Gas Collection and Combustion Project. And the Terrapass purchase agreement details the Carbon offset purchase order made by Hedera Hashgraph.
Calculating quarterly offsets for network operations
To offset network operations, Hedera Hashgraph has purchased "green-e climate certified" credits for 23 metric tons of CO2, at the cost of USD $10 per metric ton, totaling USD $230. By purchasing three additional metric tons of offsets, Hedera ensures its carbon-negative status.
Hedera network operation emissions for Q2 2021 were 20 metric tonnes of CO2, according to a carbon assessment by the third-party firm Terrapass. According to the EPA’s greenhouse gas equivalency calculator, that amount of CO2 is equivalent to 4.3 gasoline-powered passenger vehicles being driven for one year.
The emissions included in this assessment stem from all public-facing infrastructure, as found on https://status.hedera.com/ as of 08/05/2021; this includes:
Mainnet nodes (21 nodes)
Testnet nodes (6 nodes)
Previewnet nodes (6 nodes)
Mainnet mirror node APIs (REST & HCS gRPC) (4)
Testnet mirror node APIs (REST & HCS gRPC) (2)
This assessment was calculated based on the power consumption of several network nodes and conservatively extrapolated across all nodes on the Hedera networks. It considered the growth of network nodes and increasing real-world application transactions on the Hedera mainnet, of which the Hedera network has recently surpassed Ethereum.
Based on the Hedera network’s current throughput at 2,572,467 transactions per day, the average amount of energy consumed per transaction is 0.00017 kWh, estimated to .0000205494552 kgCO2. In comparison, the average Bitcoin transaction consumes 1,736.85 kWh, producing 825.00 kgCO2. And the average Ethereum transaction consumes 133.88 kWh, equating to 63.59 kgCO2 produced. We anticipate Ethereum’s energy consumption to be reduced in v2, upon transitioning to proof-of-stake.
Hedera’s energy use will continue to grow as additional infrastructure is added and carbon offsets will be purchased quarterly to account for this growth. In addition, Hedera is capable of much higher transactions per second than currently experienced — transaction growth will result in a continued drop in per-transaction energy usage. Today, Hedera is performing the equivalent of over 10,000,000 transactions and 788,000 transactions for the same amount of energy it takes Bitcoin and Ethereum to process 1, respectively.
Avg. txns per day (citation 1, 2, 3)
kWh (citation 4, 5, 6)
kg CO2 (citation 7)
Times less efficient
An application ecosystem that protects our ecosystem
Hedera Governing Council members and independent application developers alike choose the Hedera network as their public distributed ledger for environmental, social, and governance (ESG) application use cases. The Hedera network combines sustainable energy consumption, high throughput, low fees, and stable, decentralized governance to deliver an unmatched experience for companies and projects looking to participate in the space.
Council member Électricité de France (EDF) has cited their intention to use the Hedera Token Service to build a carbon offset and credit marketplace:
“The Hedera Token Service (HTS) is one innovation we look forward to leveraging, to deploy a carbon offset and credit system on Hedera, in line with our overarching mission.” said Gilles Deleuze, Principal Researcher, Systems Risk Assessment at EDF R&D “Additionally, we will be exploring other use cases that leverage the technological advantages of speed and security that Hedera DLT brings.”
And independent applications building the future on the Hedera network, such as DOVU, RECDeFi, and Power Transition, have made it clear that the DLT is unmatched when it comes to tokenizing carbon offset credits, creating a verifiable log of documentation related to carbon sequestration projects, or transferring value for the sharing of energy on a microgrid.
Foundational requirements when evaluating public distributed ledger technologies
Individuals, businesses, and governments will increasingly rely on public distributed ledger technology to create trust between parties. This is especially the case as regulation, application ecosystems, and use cases begin reaching maturity. Utility, efficiency, governance, and predictable fees are increasingly becoming critical deciding factors during the evaluation phase of adopting a public network from both a bottom-line business and architectural perspective. At a foundational level, Hedera Hashgraph and its network services have proven to meet these criteria and go beyond by ensuring that it does so in an ecologically friendly way.