Next-gen blockchain technology from Ripple Labs has the potential to revolutionize the cryptocurrency landscape with energy-efficient protocols supporting the company's 2020 pledge to reach carbon net-zero by 2030.
What is Ripple Labs' new blockchain technology?
The company's RippleNet Infinity platform aims to improve cryptocurrency transactions with increased security, faster processing, and greater energy efficiency, as reported by CoinTrust in February.
Ripple uses a digital asset called XRP, with transactions recorded through its decentralized XRP Ledger. Traditional crypto mining — the process of solving computational problems to add transactions to the blockchain — is not used on this platform (as Forbes and other outlets have explained), which means far less energy is consumed, per the company.
Ripple has touted its XRP Ledger as "the first major global blockchain to be carbon-neutral, a milestone achieved in October of 2020." The Cool Down was unable to find an independent verification of this claim, but being carbon-neutral means a system removes or mitigates as much carbon from the air as it emits.
The company has previously claimed its Federated Consensus protocol helps reduce energy consumption compared to competing platforms. CoinTrust reported that RippleNet Infinity can efficiently manage up to 100,000 transactions per second.
Why is it so important?
While cryptocurrencies have revolutionized digital transactions, platforms like Bitcoin have become a drain on electricity resources. That system utilizes a proof-of-work protocol, which requires energy-intensive mining operations to validate transactions, as Investopedia has noted.
These cryptocurrency mining setups, which can sometimes be illegally operated, have at least in some places been putting a strain on the electricity grid. In addition, there are significant cooling demands for data centers, which add to the resource consumption of such operations.
The U.S. Energy Information Administration has estimated that the annual electricity use associated with domestic cryptocurrency mining operations now represents up to 2.3% of the total electricity consumption in the country.
"We intend to continue to analyze and write about the energy implications of cryptocurrency mining activities in the United States," said former EIA Administrator Joe DeCarolis in a press release in 2024.
"We will specifically focus on how the energy demand for cryptocurrency mining is evolving, identify geographic areas of high growth, and quantify the sources of electricity used to meet cryptocurrency mining demand."
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Definitely 👍 That said, agency efforts to collect information were later blocked and discontinued.
How RippleNet Infinity could make a difference
In 2022, President Joe Biden signed an executive order to support intelligent advances and responsible development of digital assets systems, with an eye on reducing negative climate impacts, and RippleNet Infinity seems to be aligned with these goals.
"A Tesla and a Hummer can both get you from point A to point B, but the carbon emissions from each are vastly different. The same thinking should be applied to blockchains and how they are used today," Ripple Labs explained about its broader efforts in 2022.
In terms of energy use, The Fintech Times cited a 2021 report rating Ripple's XRP as the least energy-intensive of the seven leading crypto coins it assessed, consuming just 0.00112% of the energy used for Bitcoin transactions.
"As the first major blockchain company to pledge to be carbon net-zero by 2030, Ripple continues to create and champion a network of engaged partners with a like-minded commitment to sustainability," the company wrote in 2022.
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