What is Blockchain?
At its core, blockchain is a distributed digital ledger that stores data of any kind. A blockchain can record information about cryptocurrency transactions, NFT ownership or DeFi smart contracts.
While any conventional database can store this sort of information, blockchain is unique in that it’s totally decentralized. Rather than being maintained in one location, by a centralized administrator—think of an Excel spreadsheet or a bank database—many identical copies of a blockchain database are held on multiple computers spread out across a network. These individual computers are referred to as nodes.
As fresh data is added to the network, a new “block” is created and attached to the “chain.” This involves all nodes updating their version of the blockchain ledger to be identical.
How these new blocks are created is key to why blockchain is considered highly secure. A majority of nodes must verify and confirm the legitimacy of the new data before a new block can be added to the ledger. For a cryptocurrency, they might involve ensuring that new transactions in a block were not fraudulent, or that coins had not been spent more than once. This is different from a standalone database or spreadsheet, where one person can make changes without oversight.
Transactions are typically secured using cryptography, meaning the nodes need to solve complex mathematical equations to process a transaction.
“As a reward for their efforts in validating changes to the shared data, nodes are typically rewarded with new amounts of the blockchain’s native currency—e.g., new bitcoin on the bitcoin blockchain,” says Sarah Shtylman, fintech and blockchain counsel with Perkins Coie.
There are both public and private blockchains. In a public blockchain, anyone can participate meaning they can read, write or audit the data on the blockchain. Notably, it is very difficult to alter transactions logged in a public blockchain as no single authority controls the nodes.
A private blockchain, meanwhile, is controlled by an organization or group. Only it can decide who is invited to the system plus it has the authority to go back and alter the blockchain. This private blockchain process is more similar to an in-house data storage system except spread over multiple nodes to increase security.
What is cryptocurrency?
Cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the goods or services that the company provides.
As of October 2021, more than 13,000 different cryptocurrencies are traded publicly, according to CoinMarketCap.com, a market research website. And cryptocurrencies continue to proliferate, raising money through initial coin offerings, or ICOs. The total value of all cryptocurrencies on Oct. 22, 2021, was more than $2.5 trillion, having fallen off an all-time high above $2.6 trillion days earlier.
What are the environmental impacts of blockchain and cryptocurrency?
As a conservation organization that has decided to accept cryptocurrency, we at Sustainable Surf feel that it is our responsibility to speak directly and honestly about its actual environmental impacts. There is a great deal of granularity in this space and the overarching myth that “all crypto is dirty” needs to be dispelled. The reality is that there are many powerful and important ways to use blockchain in a positive, high-impact manner that can benefit the planet and its people.
Blockchain technology and cryptocurrency are frequently accused of having significant negative environmental impacts due to their energy use and carbon emissions. Historically there has been a strong case for this perspective, as early blockchain ecosystems -- most specifically bitcoin -- relied on energy-intensive proof-of-work (POW) consensus mechanisms that, when not powered by renewables, led to high levels of fossil fuel consumption.
While there is still a great deal of work to be done, most of today’s blockchain tech has evolved to circumvent this challenge. POW technology has been largely supplanted by a new consensus mechanism known as proof-of-stake (POS), which is vastly more efficient than POW. The energetic requirements of POS are only a tiny fraction of what a similar-size POW ecosystem would require. To illustrate the magnitude of this difference, consider the following comparison:
The bitcoin network can conduct about 5 transactions per second, incurring an energy cost-per-transaction of 830 kilowatt hours (kWh). By contrast, Tezos, a modern POS network, is able to conduct around 52 transactions per second, with an energy cost-per-transaction of 30 milliwatt hours (mWh). Given that one kWh is equivalent to one million mWh, the energy use difference between Bitcoin and Tezos falls around a factor of 25 million.
The widespread adoption of POS technology by a growing percentage of the blockchain sector is allowing us to accomplish more at a rapidly decreasing cost in terms of power-per-task. At the same time, even the world’s remaining POW ecosystems are drawing an increasing portion of their energy from renewables. In the case of bitcoin, this figure is now well over half of its total energy consumption. While this is certainly not to the level of making bitcoin a sustainable enterprise, it is important to note the forward progress. Any donation of Bitcoin to Sustainable Surf will have its carbon footprint calculated and wiped out using SeaTrees Tokens.
We must also evaluate blockchain and cryptocurrency not only in a theoretical vacuum, but side-by-side with conventional financial systems. It’s important to compare the impact of cryptocurrency to the sector that it stands to revolutionize, or in some cases, even replace. Cryptocurrencies do not rely on banks, commutes, parking lots, paper trails, office buildings, printing, or real estate development in the way that conventional finance does. To properly evaluate the true environmental impact of cryptocurrency, its footprint should be compared to that of the infrastructure, utilities, transportation, and other requirements of the conventional financial sector.
There is no debate that cryptocurrency can be environmentally damaging. The early years of bitcoin taught us that. That said, we are learning, and the sector is improving at an incredible rate. When developed thoughtfully and managed responsibly, cryptocurrency has the potential not only to achieve sustainability, but to actually increase efficiency, bolster renewable energy, and reduce the environmental impact of our financial systems as it replaces conventional banking infrastructure with digital decentralized systems.
We would encourage our supporters to research this space and learn more about the many different types of blockchain technology that are currently available. Additionally, for supporters looking to support our work via cryptocurrency, we kindly request that you make these donations in proof-of-stake currencies.
What is SeaTrees doing to mitigate the environmental impact of blockchain and cryptocurrency?
Like any process that uses electricity, the resulting CO2 emissions can be calculated, and dealt with appropriately. The environmental impact has been sensationalized, in part due to the mystery around cryptocurrency and blockchain technology. However as long as the climate impact is “wiped out” with quality carbon offsets, then the impact is neutralized in exactly the same manner as a company or individual.
In particular, SeaTrees has a partnership with Aerial to calculate the carbon footprint of Ethereum transactions such as NFTs, which are then wiped out with SeaTrees offsets. You can learn more about this on a recent blog post.
Any other blockchain transaction we’re involved with will have its carbon footprint calculated and wiped out.
Why does SeaTrees accept cryptocurrency?
Blockchain technology has the potential to support SeaTrees (and other nonprofit conservation efforts) in multiple ways. Critically, it can:
-Transmit value that allows for near immediate wiping out of carbon impact.
-Open new portals for fundraising wherein international donations are easier to accept. We can reach a new donor audience, and much more.
-Create transparent, decentralized information storage systems that can provide tamper-resistant data repositories beyond the reach of corporations and other actors that may have an incentive to control, obscure, or alter this information
-Backbone the creation of new partnerships and immersive experiential platforms that can magnify the impact of educational and outreach efforts
-Create trustless portals connecting marketplaces and social media platforms directly to the activists, artists, and conservation organizations that power global environmental efforts (think being able to instantly and safely send tips via twitter or instagram to creators of content -- and in this case, environmental progress -- without the need for banks, personal information, or fiat currency)
What Cryptocurrencies does SeaTree accept?
Please see our Crypto Donations page for more information.
Is a cryptocurrency a charitable donation and tax deductible?
Yes, we can manually generate cryptocurrency donation receipts for those who request them beforehand. Please email us BEFORE making your donation.
The IRS classifies cryptocurrencies as property, so cryptocurrency donations to 501(c)3 charities receive the same tax treatment as stocks. Donating cryptocurrency is a non-taxable event, meaning you do not owe capital gains tax on the appreciated amount and can deduct it on your taxes. This makes cryptocurrency donations one of the most tax-efficient ways to support your favorite cause. Contact your tax or financial advisor for more information.
What is a Non-Fungible Token (NFT)?
At its core, an NFT is an asset existing on a blockchain comprising a unique set of data. Functionally, an NFT has the ability to hold and transmit unique data on a blockchain infrastructure. For example, NFTs can contain artwork, contractual information, instructions for further information transfer, items or privileges earned via an online game, rights to something, and much more. There is no limit to what an NFT can do. The only defining characteristic of an NFT is its uniqueness.
SeaTrees can benefit from NFT technology in multiple ways. We partner with NFT communities that donate some of their revenue to our work. We also provide carbon elimination services to wipe out the carbon footprint of NFTs. Beyond this, SeaTrees is exploring additional and more sophisticated ways to use NFT technology that would allow for more sustainable and high impact carbon market purchases to be made in real time by a wide variety of global actors.
How does SeaTrees wipe out the carbon impact of NFTs?
At SeaTrees, we firmly believe that it is incumbent upon all of us to take responsibility for our carbon footprint. As such, we welcome all NFT communities to work with us in order to wipe out the potential climate impacts of their work.
SeaTrees works with Aerial to calculate the carbon footprint of NFTs, which can be wiped out using SeaTrees Tokens. The SeaTrees Token is made up of 1 VCS certified carbon credit from the Southern Cardamom REDD+ Project, 4 mangrove trees planted in the Biak Island region of Indonesia, and 1 sq-ft of kelp restored in Palos Verdes, California. The additional 4 mangrove trees and 1 sq-ft of kelp collectively have the potential to sequester 1 additional tonne of CO2 over their lifetime. We made the SeaTrees Token this way to be inherently regenerative, so that you automatically sequester more CO2 than you emit.
How can my NFT community collaborate with SeaTrees so I can wipe out my carbon impact and conduct an Ocean Positive launch
Thank you for asking! Regardless of whether you are minting your NFTs on a proof-of-work or a proof-of-stake chain, there is still some level of carbon impact and it’s critical to take action to wipe it out. Please contact us so we can collaborate to create a healthier future for our planet and its communities.