By 2050 there'll be more plastic trash in the world's oceans than fish. And the next generation could see more used car tires than there are trees. So how can blockchain — a digital technology — possibly be good for the environment?
By making processes more efficient which leads to less consumption. And by changing people's behaviors, incentives and practices that affect the environment, according to new report by World Economic Forum (WEF) titled "Building Block(chain)s for a Better Planet." For example, what if developers used smart contracts to pay people digital tokens so they'll recycle more, use less water and properly dispose of waste?
Environmental Use Cases
The World Economic Forum paper identifies eight game-changing applications of blockchain as it relates to environmental concerns. First, blockchain can significantly improve global supply chains, writes WEF's authors. The paper was completed in collaboration with "Big Four" accounting firm PwC and Stanford Woods Institute for the Environment.
"Providing such transparency creates an opportunity to optimize supply-and-demand management, build resilience and ultimately enable more sustainable production, logistics and consumption." A use case could involve stopping illegal fishing by tracking the catch from "bait to plate" using the technology.
Second, distributed ledger technology (DLT) can improve resource management, leading to less waste and consumption. "Platforms could collate distributed data on resources (e.g. household-level water and energy data from smart sensors) to end the current asymmetry of information that exists between stakeholders."
Other benefits mentioned include raising funds for sustainability
and incentivizing circular economies. "Plastic Bank has created a social enterprise that issues a financial reward in the form of a cryptographic token in exchange for depositing collected ocean recyclables such as plastic containers, cans or bottles."
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Credit: World Economic Forum[/caption]
Barriers To Adoption
But resistance to change is likely. The study's authors listed six areas that pose as challenges and risks to adopting blockchain.
The first potential barrier involves adoption. Many people around the world aren’t familiar with blockchain tech, and there's also an issue of public trust — whether such systems are perceived as reliable. Second is the technology itself. There are concerns whether such networks are able to deliver scale and speed to handle public-wide transactions.
And when it comes to security, a key question is "Will shared data across multiple nodes be safe from leaks or hacks?" Moreover, there's a lack of legal guidance in most countries. There are unclear or regulatory frameworks surrounding the technology, as well as, restrictions on sharing with other parties personal and government data.
Concerns Over Energy Use
When it comes to interoperability, WEF's authors point to lack of blockchain standards that could lead to disparate systems and protocols. Finally, scaling could lead to too much energy consumption by validating nodes. The whitepaper mentions Bitcoin's (CRYPTO: BTC) enormous electricity consumption: In July 2018, the Bitcoin network consumed as much power as the European country of Austria.
"As the technology matures and is applied across a wider set of sectors and systems, there is both a challenge and an opportunity to realize blockchain’s potential – not just for finance or industry, but for people and the planet," stated the authors. "To date, these opportunities remain largely untapped by developers, investors, and governments, yet they represent an opportunity to unlock and monetize value that is currently embedded in environmental systems."
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