Reading down a list of recent blockchain projects, someone unfamiliar with the technology might think that the only thing blockchain is good for is gambling or rock-paper-scissors games that make Pong look sophisticated.
Thankfully, there’s more to blockchain than that — a lot more. In fact, as crypto and blockchain make their way into the public consciousness, the true potential of the platform is starting to grab visionaries’ attention. Understanding what advantages a decentralized ledger brings has generated a huge list of solutions to world problems.
And near the top of that list is one of the most pressing issues of the day: The environment.
All for One and One for… One?
One of the main reasons we, as global citizens, don’t do a better job of protecting our collective environment is what ecologist Garrett Hardin called “The Tragedy of the Commons.” His premise is that when something is held publicly and collectively, individuals act in their own interests, rather than in the interests of the collective whole.
The result? We overfish. We pollute. We deforest. And we potentially destroy the environment…all while over 1 billion people around the world have no consistent, dependable access to electricity, says the World Bank.
“The fundamental reason for [our failure to protect the environment] is lack of trust amongst independently acting self-interested parties, and the lack of incentives to maintain the commons,” explains Mark Whitman in an article for Sustainable Business Toolkit.
Did someone just say “lack of trust,” “lack of access,” and “lack of incentives?”
This sounds like a job for blockchain!
Blockchain to the Rescue
A scenario where there’s a lack of trust and a lack of incentive seems custom-made for a decentralized ledger. Blockchain uses data integrity to address the trust issue, and can use tokens to incentivize desired actions, while democratizing the energy market to allow access to those currently excluded.
Here’s how it could work:
Increased transparency. Blockchain can aid “save the environment” efforts through greater transparency in two main ways. First, governments, companies, other organizations, and even public figures will have to walk the talk. They won’t be able to hide actions that are incompatible with their public statements about their values.
Next, individuals who donate to environmental issues will know exactly where their funds are going. By turning the “invisible, visible,” corruption is rooted out and donors are more aware of the impact of their funds.
“Our thesis is that because the centralized institutional nodes of accountability have been compromised, distributed accountability could be the way to serve the interest of all of the community stakeholders: citizens, government, and businesses. Through this mechanism, we hope to engineer economic inclusion and community engagement.” says Sustainability International founder and CEO Chinyere Nnadi.
Increased efficiency. Right now, energy supply is a centralized public utility. A few “big players” — public utilities, for the most part — essentially have a monopoly on energy. But imagine a decentralized future. “Instead of big power plants sending electrons over long distances to people’s homes, we might generate more power locally using solar panels, and homeowners might become makers and traders of power as well as passive consumers,” writes Ben Schiller in Fast Company.
Blockchain technology could track usage and production, and even allow individuals to buy and sell energy with alternative currency. Small-scale projects and prototypes are underway throughout the world, such as the Scanergy prototype in Brussels and the micro-grid project in Brooklyn, NY.
So far, the results of these tests are promising. “By letting go of intermediaries, blockchain transactions lower costs, speed up processes and result in greater flexibility throughout the entire system,” writes Philippine T’Serclaes, global head, Thought Leadership and Strategic Partnerships of Schneider Electric, for the World Economic Forum.
Increased inclusion. One of the big promises of blockchain is its ability to allow entry and inclusion to those historically excluded from traditional markets. “Blockchain has the most salient applications in developing countries where people struggle with having access to energy sources and being included in formal financial systems,” according to Coinify.
With a microgrid, small producers — even those in remote areas of Africa, for instance — aren’t dependent on access to large power grids. Instead, they can capture, use, and potentially sell excess energy within their own community.
Yes, there are some entertaining applications of blockchain. But its real potential is huge and, quite literally, life-changing for billions of people around the world.
Moe Levin is CEO of Keynote, a global technology event company which has been responsible for over $250MM of investments into cryptocurrency/blockchain startups. He sits on multiple government councils in the UAE, France, Netherlands, and Belgium, and works closely with regulators and banks promoting the use of bitcoin and blockchain technology. He is a Board Member of Unsung, hacking homeless hunger and co-founder of Academy — School of Blockchain.