Volker Hartzsch is a professional business coach who has helped more than 180 clients to achieve seven figure annual incomes. Working with different partners he has developed automation software and SAAS solutions, as well as building and selling 19 companies over the last 22 years.
This article will focus on the role of blockchain in helping the environment, going far beyond energy footprints and carbon credits.
Now more than ever in the world’s history, there is intense pressure on major businesses to embrace sustainability. In countries all over the world today, the impact of climate change is making itself felt with increased regularity and intensity, with adverse weather conditions and natural disasters costing people their lives and livelihoods.
Indeed, climate and weather extremes throughout 2022 highlighted the need for more action, according to the World Meteorological Organization, with climate-related disasters like extreme heat, drought and flooding affecting millions of people and costing billions in 2022 alone.
Blockchains are often stigmatised for their environmental impact. Although it is true to say that proof-of-work chains like Bitcoin have a substantial ecological impact, proof-of-stake chains are much more energy efficient. For example, the Ethereum network’s energy usage fell by a staggering 99.9% after it upgraded to a proof-of-stake chain.
Moreover, Ethereum is now making concerted efforts to address and rectify its historical carbon consumption through the launch of the new Ethereum Climate Platform, a collective of industry luminaries, including Ethereum Enterprise Alliance, Microsoft, ConsenSys, Polygon and Aave. The platform was launched at COP27’s UN Climate Change Global Innovation Hub.
With these new green credentials, blockchain networks could potentially be put to good use, improving tracking and verifiably measuring emissions of a particular company or supply chain. Due to its inherent transparency, immutability and accountability, blockchain can be used to track carbon balances and environmental measures, making it easier to hold to account companies that claim to be sustainable.
One way in which blockchains could be leveraged as a sustainability solution is through the tokenisation and digital distribution of digital environment assets. Take for example the recent acceleration in development of the carbon credit market, which has attracted the attention of organisations from across the globe – from large registers that provide accreditation such as Gold Standard and Verra to the World Economic Forum and other international bodies.
Cryptocurrency mining is undeniably a process that usually necessitates high energy consumption due to the complex nature of computation required. To provide a solution to this problem, developers have come up with green cryptocurrencies, the world’s first low environmental impact digital currency models. Green cryptocurrencies that are currently gaining popularity include Nano (NANO), Stellar Lumens (XLM), Cardano (ADA), Algorand (ALGO) and Chia (XCH).
Throughout the blockchain industry, sustainability is becoming an increasingly important priority, with new cryptocurrencies and existing major players alike rethinking their activities to make the industry greener and protect its long-term future.