Last year was always going to be turbulent following Brexit, the American elections and demonetisation in India in 2016. And, as we enter 2018, more uncertainties abound, with climate change on everyone’s agenda as companies investigate new ways to make their business models more sustainable.
However, with all problems come solutions, and bitcoin and blockchain are stepping in just in time for the tenth birthday celebrations. With the help of new technology, individuals and corporations can see the impact of their choices on the environment, driving them to cut their carbon footprint. Bitcoin, an open-source virtual currency, was propelled into the public eye in 2008, as a way to trade without banks, at a time when they were failing. The blockchain is the shared database technology that underlies bitcoin, and it is set to disrupt numerous industries and play a major role in tackling climate change going into 2018.
Climate change is essentially a global problem, and one of the main difficulties in confronting it is circumnavigating the myriad of different languages and regulations between countries. Blockchain, a secure distributed ledger technology, can overcome these hurdles by cutting out the middlemen and bureaucracy. Self-governing, tamper-free, online databases that nobody owns, yet everybody trusts, can promote sustainability by building confidence and reducing the risk of corruption. Blockchains can help track merchandise from the manufacturer to the shop floor, making supply chains more transparent. This will help prevent waste, inefficiency, hacking, fraud and unethical practices, helping consumers make more informed, environmentally friendly decisions on how and where they want to buy.
The Paris climate agreement codified the pressure to decrease emissions, and blockchain can enhance governance and sustainability, supporting collective action to challenge environmental issues. Since 2012, Britain has halved carbon emissions in the electricity sector making the power system the 4th cleanest in Europe and the 7th cleanest in the world, but more can be done, and innovative and cutting-edge technologies can assist. In today’s world, you would be hard-pressed to find a successful international company that isn’t following various sustainability initiatives. Thanks to increasing pressure from watchdogs, customers, staff and shareholders, more and more businesses are required to offer evidence of a reduced carbon footprint. The primary goal is to connect experts in the climate field, who recognise what needs to be done, with blockchain developers, who can come up with fresh ways to apply the technology.
Financial service firms seem to be leading the way in blockchain applicability; they currently have the most commercial use cases in the marketplace, but more non-finance use cases will come into their own in 2018. Already applied to banking and payments, this same technology can resolve environmental problems affecting the planet such as refining carbon emissions trading, simplifying clean energy trading, better-quality tracking and recording of greenhouse gas emissions reduction and avoidance of double counting. Last year saw several blockchain-based solutions from banks go live but another application of the technology is to ensure that seafood, wood and other products sold as environmentally friendly, really are.
For most, blockchain technology is still fairly new, especially outside of its bitcoin roots. Will this year be the year that blockchain lives up to its full potential? Like any emerging technology, research, funding, and application will take time. Nonetheless, the speed at which it is disrupting different industries is credible and its reputation and usage are growing month on month. Green cryptocurrencies will increase in 2018, enabling us to track and verify transactions and interactions without a centralised power, and by 2021 approximately 25% of the large global companies will be piloting or using blockchain-based automation in transactional procurement. The blockchain technology that underpins cryptographic currencies can support sustainability, alongside tech trends that will continue to drive change.
Signs are pointing to 2018 as a year that could see the beginnings of a revolution in green finance and while discussions about the technology are still focused on potential, it is making headlines. Whether positioned within the music industry, travel, the financial sector or the housing market, business managers worldwide are advised to prepare for a major shakedown. But can the blockchain, alongside incentives such as carbon credits, create a ‘carbon currency’ and really stop climate change and protect the environment? The technology can work in tandem with companies advocating sustainable development, allowing for transparent, certifiable and principled transactions, changing the way the world creates and interacts with supply chains, energy grids and other social records. Sustainable practices are not typically the cheapest option, so many firms may cost and source goods and services without much environmental consideration. This technology could change all that.
The need to fight climate change is unyielding, and we should employ any means we can, whether it’s blockchain, radical new ways of producing energy or using new technology, to make positive changes towards tackling emissions. It may be a while before the blockchain revolution really takes hold in the environmental sector, but the technology is evolving, and change is definitely afoot.
As the technologies are becoming more mainstream, with governments warming up to them and regulators stepping in, carbon currencies will become a practical reality, demonstrating that a modern-day problem requires a modern-day solution.