Everyone is talking about blockchain, so why all the hype?
When 10,000 government delegates met at COP23 to tackle climate change, the UNFCC and other sponsors brought 100 blockchain developers to Bonn with one purpose - to code for climate.
From November 12-17th, developers and industry experts met at COP’s first Hackathon, Hack4Climate. During the competition, I along with developers from all over the world, formed teams with industry experts to build blockchain-based apps & startups. The idea was to have developers and experts team up to innovate and create blockchain solutions that can start slowing down climate change now.
Blockchain, the world’s most secure digital ledger, interested the UN because it has the capability to transform and automate agreements and transactions. Blockchain’s ledger functionality can help governments, organisations, and businesses automate, record and securitize transactions and processes. With blockchain, you can track emissions sensors from all over the world, trace a product from the beginning to the end of its supply chain or even amplify the transparency of business agreements.
But first, what is blockchain?
While the bulk of blockchain news concentrates on cryptocurrency and bitcoin, the real reason why blockchain is exciting is that its structure can be used for other sectors, including sustainability.
Blockchain at its core, is a new online system of structuring and securing information, whether it be for digital currency or solar production rates. The system, consists of nodes, also known as computers. Each computer tracks details about the process being recorded. For instance, a detailed account of every energy transaction a user makes, the date and the user that makes that transaction. Then, all the computers or nodes are connected to one ledger, that records the entire systems’ information. As each node is updated with the same information, it leaves a permanent record or ledger of the process. Simple at its heart, blockchain is a secure digital ledger that tracks items from many different sources at the same time, all while showing that ledger to the many parties involved.
How Blockchain is Influencing Sustainability Projects
This simple, yet innovative technology is being used to influence every corner of the environmental field.
At Hack4Climate, international developers focused on the five main ways blockchain is influencing the environmental field: identification & tracking of emissions, carbon pricing, sustainable land use, sustainable transport, and distributed energy. Over the competition, we discussed current blockchain solutions and worked together to create new ideas of how blockchain can transform each of the five fields.
Identification & Tracking of Emissions:
Provenance, a platform based in the UK, is already allowing suppliers, auditors and shoppers to track items through the supply chain. However, more organisations are using blockchain within their companies to track their merchandise. At Hack4Climate, Everledger, a global start-up focused on tracking provenance of diamonds and other metals, asks developers to help them trace emissions from the diamond industry. During the competition, Everledger worked with developers to create an application that can trace diamonds, using a unique ID, from the beginning to the end of its supply chain. The end application allows users to download an Everledger app to track their diamonds carbon footprint.
Carbon pricing is another sustainability issue that blockchainers have dug into. At the competition, Clean Coin, worked with developers to help reduce the amount of carbon produced by blockchain mining. As cited by the Cologne Centre for Economic Service, if 50% of the world uses cryptocurrency by 2030, the demand would exceed today’s entire energy supply. Clean Coin pitched a solution to this issue, using a platform that encourages miners to reduce their footprint. Since renewable energy is only available in certain areas and at certain times, it would allow miners to make more informed decisions by telling them when and where to mine. Users can then mine responsibly, in areas with more renewable energy and at times when it can be provided.
Sustainable Land Use
Sustainable land use is not what people usually think of when they think about blockchain. However, two groups at the competition, GainForest and Plant Life, provided solutions to reduce deforestation. GainForest focused on financially incentivizing caretakers to reduce Amazonian deforestation. During the 24-hour competition, they used blockchain to allow donators to pay small-scale farmers, satellite data to verify if small-scale farmers have reduced deforestation, and machine learning to predict the areas of the Amazon that are the most at risk to deforestation.
Plant Life approached deforestation by gamifying tree planting and reforestation verification. This start-up believes that we can mitigate deforestation, by focusing on saving trees that are still acting as carbon sinks. Pitching their product as the plant version of Pokemon Go, gamers can verify trees and their growth rate on the blockchain by taking pictures of the tree at different time periods. The pictures are put together to give organisations a better idea of the growth rate of individual trees, allowing them to make more informed forest management decisions.
Swiss Federal Railways (SBB CFF FFS), one of the sponsors at Hack4Climate, asked developers to help them build a blockchain-supported transport solution. Developers from the group Autonomi argued that in order to foster a car-lite society, we need to encourage users to opt into public transport. Pitching their solution as anti-Uber, their end-to-end platform negotiates and authenticates payment seamlessly between public and private transport. Mobile users will be able to pre-pay for their trips and use their phones to access cars, buses, and trains. Moreover, the platform incentivises users to go green by charging fees for the carbon they emit during their trip.
Now, how is blockchain is revamping the energy sector? Multiple start-ups are already focusing on democratizing and decentralising energy production by incorporating blockchain into community-level peer-to-peer energy transfers. LO3 Energy, is an organisation most known for the Brooklyn Microgrid, already allows for peer-to-peer energy transfers in community micro grids. The microgrid allows members to trade and sell the energy they produce from their own solar systems and store energy within home battery units.
At Hack4Climate, I worked with two energy start-ups, Net+ Block and Energy Islands, which worked off of peer-to-peer transferring systems, to provide grid-level balancing in areas that already have grid access or have no grid at all. Net+ Block, a grid load-balancing solution, partners with energy providers to transform the grid to reach 100% renewable energy. Energy exchanges are automated between the provider and energy user and billing cost is reduced by using blockchain to verify consumption. Energy Islands, a no-grid solution targets areas that can’t access electricity. With nothing more than solar PV units, PV & islanding inverters, a mounting system, and battery, Energy Islands creates a nano-grid, furthering and democratizing energy access.
Time for businesses to take action
The World Economic Forum announced that, “by 2027 10% of global GDP will be stored in blockchain” and that it will be highly incorporated into taxes and other contractual agreements. Fin-tech, banks, and tech firms have bet on this rate of blockchain uptake and are using its framework to transform technological systems all around the world. While the blockchain hype began with digital currency, there is space for the sustainability to use blockchain for good.
To fight climate change, more environmental companies should work with developers to create blockchain-supported climate solutions. Organisations can grab on to this new technology and realise its potential by partnering with blockchain groups and developers and incorporating it into their current frameworks, helping accelerate our journey to carbon neutrality.
Alex Todorovic-Jones is a Data Scientist at Carbon Smart
© Faversham House Ltd 2022 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.