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The Intergovernmental Panel on Climate Change (IPCC) recently concluded that, at the current rate of human activity relating to global greenhouse gas emission pathways, we are facing a threat of a 1.5°C of global warming above pre-industrial levels. This may not sound like a large number, but the consequences are direâââthink rising sea levels leading to flooding of lowland areas, degradation of tundras and rainforests, and increased COâ concentration in oceans leading to mass bleaching of coral reef ecosystems. That last one hits particularly close to home, being a scuba-diver myself.
To combat this issue, many organisations have looked to technologyâââblockchain in particular. One such organisation is the Blockchain for Climate Foundation that serves to âput the Paris Agreement on the blockchainâ and âcatalyse climate action by connecting the national carbon accounts of the world.â
Source: âPutting the Paris Agreement on the Blockchainâ
Of course, when it comes to utilising blockchain technology to reduce the impact of climate change, the irony isnât lost to meâââitâs no secret that many iterations of distributed ledger technology at work today are inherently energy-intensive. In fact, the entire premise of digital asset mining revolves around the deliberate expenditure of processing power.
The orange areas show where global Bitcoin mining consumes more electricity than the entire country
But is there a silver lining?
In Building Block(chain)s for a Better Planet, a publication by the World Economic Forum and PWC, blockchain technology is identified as a key driver in what has been coined the âFourth Industrial Revolution.â Along with other emergent technologies such as the Internet of Things (IoT) and Artificial Intelligence (AI), it is posited that blockchain technology will serve to âseismically affect economies, values, identities and possibilities for future generationsâ (4).
The central premise of PWC report revolves round the notion that, while currently in its infancy and thus still fundamentally inefficient, future implementations of blockchain technology could âdramatically improve operating efficiencies in some sectors while completely disrupting othersâ (13).
As a firm believer in and user of blockchain technology, I concur with this sentiment, and have established some findings as to how exactly distributed ledger technology, in its current or future forms, canâââpardon the melodramatic Grand Statementâââsave the planet:
Decentralised Carbon Markets
Carbon credits, or âtradable certificates or permits representing the right to emit one tonne of carbon dioxide,â were created with all the right intentionsâââto act as an incentive for businesses to implement carbon-friendly operational practices, with the ultimately goal of balancing the worldâs carbon footprint.
Even as the multi-billion dollar market it is today, it is rife with limitations caused by intermediaries. The Carbon Grid Protocol seeks to change this through their development of a âcomplementary protocol layer [that enables] blockchain networks and DApps to efficiently access carbon credits to offset their carbon footprint.â
âBitcoin and Ethereum transactions emit 60kg and 10kg of carbon dioxide respectively. This is compared to just 0.3 grams of carbon dioxide being emitted for each VISA transactionâ
Blockchain platforms could be harnessed to use cryptographic tokens with a tradable value to optimise existing market platforms for carbon (or other substances) and create new opportunities for carbon credit transactions. (PWCÂ 7)
Incentivised Prosumption
The term âprosumptionâ is derived from the notion of something being produced by consumers. An hypothetical example of this would be the implementation of a solar-powered Bitcoin mining rig in which surplus rewards are used to purchase carbon credits. Within the context of blockchain technology, this can be linked to the micro-generation energy market.
In a blockchain-powered prosumption system, it is posited that âsmart meters could be used to account and register the micro-generated energy on a distributed ledgerâ (76). We can already see iterations of this taking place today, with one example being MIT startup SolarCoin.
Can blockchain give power back to the grid?
Distributed ledgers, in combination with smart-metering systems and next-generation batteries (to accumulate energy locally), have the potential to open the energy-market to prosumer production. (Government Office for Science 76)
Sustainable Finance
Legacy issuance, trading, clearing, and settlement processes of the traditional financial industry are highly inefficient, with high latency T+3 cycles being the norm for the last two decades.
Today, organisations like Hashstacs Inc, with their Securities Trading Asset and Classification (STACS) Protocol, are primed to disrupt long-standing bastions of traditional finance. With their implementation of a hybrid ledger architecture consisting of a public/permissioned blockchain, STACS enables the complete tokenisation of capital markets for faster, cheaper, and more secure issuance, trading, clearing, and settlement of securities.
And when it comes to the tokenisation of said capital markets, there are infinite possibilities beyond traditional financial securitiesâââreal estate, art, and even solar assets, can all easily be digitised.
Imagine a world where you can seamlessly issue securities for the crowdfunding of solar energy, forest conservation, and water purification projects
Looking ahead, blockchain could be a real game changer for âblended financeâ investment in projects seeking to deliver the UNâs Sustainable Development Goals. (PWCÂ 25)
Closing Thoughts
While blockchain technology still has a ways to go before it can realistically deliver its promises of creating a cleaner, more sustainable, and more harmonious planet, I believe weâre on the right track.
Every nascent technology necessarily undergoes three main phases before it achieves mass adoption and scalability:
- R&D, where âincomes from inputs are negative and where the prospects of failure are highâ
- Ascension, where âout-of-pocket costs have been recovered and the technology begins to gather strengthâ
- Maturity, where âgain is high and stableâ and the markets achieve equilibrium
Based on the current state of the blockchain industry, weâre right in the thick of the ascension phase, with many of the organisations identified above gaining serious traction towards Series BÂ funding.
If youâre as much a tech and blockchain geek as I am, youâll no doubt be excited (and even hyped!) over what this space will have to offer us in the coming months, years, and beyond when it comes to saving the planet.
- Marcus Tan - Marketing Director - Broctagon Fintech Group | LinkedIn
- Broctagon Fintech Group | LinkedIn
Going Green: Can Blockchain Save the Planet? was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.