Understanding how blockchain technology works is the starting point to fully understand what is the cryptocurrency engine.
This is an accounting ledger that could bring many benefits in terms of sustainability, opening opportunities of green investment, ensuring greater transparency and greater responsibility when it comes to meeting commitments to reduce greenhouse gas emissions.
There is no one in the world who hasn’t heard the climate crisis and sustainability protocols to lessen the effects of climate change. Perhaps few know that the commitments of any country can be circumvented easily, most of the time in the name of economic growth.
On paper, the United Nations has signed an agreement in which they undertake to support a sustainable style in the development of their economic growth following the Sustainable Development Goals. In reality the global economic-financial system puts governments to the test because it is with the centralization of resources, that geopolitics plays a fundamental role.
In this scenario, blockchain technology could be a solution because it would break many traditional schemes by replacing them with more effective, direct and egalitarian alternatives. We will see that the fight against corruption and the current economic-financial system is the basis of everything.
Blockchain and the climate crisis: the role of technology
The role of technology in today’s climate crisis is very simple and aim to protect the environment. By protection we mean a balance of ecosystems and the reduction of the effects of disastrous natural phenomena for our society such as earthquakes, floods, droughts etc.
Environmental technology of the last century has radically changed our lifestyle. For countries like Italy it is difficult to imagine a city without a waste water treatment and waste disposal system.
Unfortunately, these technologies are not cheap and to be installed they imply a series of conditions such as the presence of experts and professionals to evaluate the problems and propose ad hoc or other solutions.
Climate change is a global phenomenon that affects every square cm of our planet and also among the most skeptics it’s hard to deny the evidence.
Blockchain and the climate crisis: the areas most affected
“When poverty meets climate change: a fundamental challenge that requires cross-cutting solutions” a Worldbank.org study that proves a worrying reality:
“Climate change will push up to 130 million people into poverty over the next 10 years, unveiling hard-won development achievements, and could cause the migration of more than 200 million people within their own countries by 2050.”
But which people are they talking about? The authors of the article underline a correlation between environmental disasters and poverty already mentioned since many years. This is a demonstration that environmental technology has played a very important role in the well-being of some societies like ours.
The effects of the climate crisis are more evident when the hygienic-sanitary conditions are not ensured, nor there is a sustainable plan for the extraction and processing of raw resources, or there are no systems for the prevention, management and control of natural phenomena.
Blockchain and climate crisis: a world beyond cryptocurrencies
Among the most popular environmental technologies in recent times we can insert many innovations based on blockchain technology. By definition the blockchain is:
“A distributed digital ledger that stores data of any kind. A blockchain can record information about cryptocurrency transactions, NFT properties or DeFi smart contracts.”
It means that while any conventional database can store this type of information, the blockchain is unique in the fact that it is totally decentralized. In other words instead of being controlled by a single administrator (centralized system), there are many identical copies of a blockchain database stored on multiple computers (called nodes) distributed on a network.
All cryptocurrencies make use of this technology that allows them to be a decentralized reality. But finance is not the only playing field, the use of blockchain to protect the environment and conserve biodiversity has been applied in different contexts by many experts.
Blockchain and the climate crisis: innovations and practical uses
Essentially the blockchain is an information management technology that uses a distributed processing architecture to improve the validation of data transactions from any unauthorized modifications, hacks and damage.
In the case of cryptocurrencies this innovation allows a decentralization of capital and at the same time the elimination of intermediaries and a direct exchange. We are talking about a tool to guarantee a “situations of trust” in which the security, privacy and accuracy of data must be preserved.
Leaving the economic-financial area, just to name a few, the blockchain has been used above all for political and social issues such as voting systems in elections or in the health sector for the management of medical records.
These examples are indirectly related to the social sphere because are highly relevant in many socio-economic contexts, where unfortunately trust and corruption issues can easily cause severe environmental damage.
Blockchain and climate crisis: eco-sustainable innovations
For this reason also the environmental sector is moved towards the use of blockchain technology to preserve ecosystems by limiting as much as possible unsustainable actions, both related to the legal and illegal market. One of the examples is the plan adopted by the World Wildlife Fund (WWF) and the protection of marine areas.
Specifically, WWF is working with blockchain system developer ConsenSys and Sea Quest to test and implement a tool of traceability for the Pacific tuna industry. With a scan of the QR code of a package of tuna, the consumer will be able to see the whole history of tuna from its fishing to the sales shop.
Another example is the work of wildlife conservation experts in Africa. According to the studio of Daniel Oberhauser of the Oxford University School of Geography and the Environment, the benefits of blockchain are evident in three areas: effectiveness of environmental monitoring, efficiency and transaction costs, fairness and distribution of benefits.
Blockchain and the climate crisis: reducing the effects of climate change
Blockchain technology can be directly applied to specific contexts as in the case of fauna in Africa but also to a larger chain like the food products that nowadays are the result of decides and dozens of steps that are not yet 100% controlled and certified.
Going even higher in our scale, we can think of blockchain technology as a starting point to reduce the effects of climate change thanks to three basic aspects that this innovation offers us which have been summarized by Shweta Sanjeev:
- a blockchain-based smart contract manager, buyer (sponsor) and seller (provider) hosting account;
- a land cover classification algorithm on Google Earth (to verify habitat or ecosystem alterations);
- a web service link that connects the above components with client interfaces (sponsors and wildlife protection providers)
In practice, blockchain technology can be of extreme importance in the context of environmental conservation and its application can be used for activities of socio-economic factors, including conservation planning and efficient implementation of the wildlife protection program.
Read also: How Does Cryptocurrency Impacts The Global Economy?
Blockchain and the climate crisis: reducing corruption and conserving the environment
The most devastating effects of climate change are evident where corruption is in power. The smart contract could be a first solution to make the system highly resistant to corruption since this tool has been managing compensation payments for more multiple sources with final recipients, without intermediaries and respecting the compensation rules set out in the contract.
Commissions end up in recipients’ digital wallets without the complexities that confuse and dilute legacy schemes, such as currency conversions, and unauthorized third party diversions. Furthermore cryptocurrencies in this finance would help shift the question of trust from “human” institutions to a more dominant domain, being technical and algorithmic systems theoretically immune to the manipulations of the money supply of national institutions.
The Google Earth engine, on the other hand, by keeping track of the state of the soil and vegetation, could constantly check the maintenance or alteration of an ecosystem for automatic validation of performance and approval of compensation payments.
In this context, also the verification of contractual performances and an efficient distribution of remuneration can significantly increase the effectiveness of environmental conservation initiatives, thus maximizing the social return on investment.
