In today’s globalized economy, inclusiveness, transparency, and environmental sustainability are some crucial goals many corporations, individuals, as well as international entities try to achieve. With our global economy expanding rapidly, many people fear that environmental sustainability and growth would come into conflict. An increasing volume of natural, non-renewable resources is fueling it.

If you are wondering what the connection is between the blockchain and our environment, you are not alone. We will discuss how decentralized and peer-to-peer ecosystems could empower social activism.

Cryptocurrencies, like Bitcoin, are usually notoriously energy-intensive. That said, the blockchain technology these digital currencies rely on could give a huge boost to environmental markets, according to experts.

You can define blockchain as shared database technology, which underlies cryptocurrencies such as Bitcoin and Ethereum. The technology is on the verge of disrupting many industries in the next few decades.

Banking and payments are already employing blockchain. However, a majority of people does not realize that they can use this technology to save the environment and solve the leading environmental problems that we are facing today. Its global adoption can even reverse or even stop climate change.

Blockchains are permanent and tamper-proof databases, shared by the financial community without any centralized owner. They are especially interesting for many environmental causes. They can make it easier to verify and track transactions and interactions without any centralized authority. It can considerably increase efficiency, transparency, and accountability of various environmental projects.

Here are a few specific areas where blockchain technology can have a positive and lasting impact on the environment.

Supply Chain Management

Many venture capitalists and companies are starting to invest heavily in blockchain technology for their startups and operations. One of the major implementations is in the area of supply-chain verifications. Blockchain technology could create more transparent and efficient supply chains for consumers.

A product often goes through several hands before it eventually reaches the store. This makes it easy for many organizations to lie about the way they manufacture their products, what chemicals and materials they use, where they offload their garbage, or how well they treat their personnel.

Consumers would be able to easily trace the origins of specific products on the blockchain because it can automatically record when and where a customer purchased an item.

Blockchain can record a verified transaction within minutes through electronic payment. Moreover, whenever the product transfers from one party to another, the system registers it as another transaction. Lastly, the receipt shows the transaction that the seller recorded.

You can use blockchain for tracking products from origination to the shelf. This can help prevent inefficiency, waste, fraud, as well as unethical practices as it makes supply chains much more transparent. As a result, they could help consumers be more informed of how a product was manufactured and shipped and build more environmentally friendly and positive choices.

In addition, it can prevent various sources of unfair and slave labor from entering the marketplace. As a great example of these two trends, a company known as Provenance is trying to connect the supply chain of yellowfin tuna (sustainably caught) in Indonesia to a specific blockchain, along with both fair trade coconuts and coffee, thereby assuring customers that these products are eco-friendly and coming from non-exploitative and sustainable sources.

Non-Profits

Non-profit organizations are rapidly growing in number. However, many of them are facing corruption. Moreover, certain individuals who aren’t working for the greater good are plaguing the efforts. Note that the bureaucracy in this type of organization tends to easily lose track of many donations which makes it difficult to hold these organizations accountable for the mismanagement of resources.

This is because it is hard to keep track of all transactions which these organizations engage in. The good news is that the blockchain could remedy this situation as it could safely store data on all financial transactions, such as donations to nonprofit organizations. Blockchain could remove the need for a separate third party in these transactions. In addition, it could hold every organization responsible that isn’t using its investments and funds as promised.

Energy

Perhaps one of the most significant innovations blockchain technology could bring to any major industry is in our energy sector. The energy and power sector as most of us know today features centralized grids where energy typically comes from power plants, in most cases, a considerable distance away from sources which use the power.

The energy sector is infamous for inefficient energy distribution, as well as unused energy surpluses. Blockchain, however, can revolutionize how we exchange energy with each other and on various energy markets.

In essence, a blockchain can allow for efficient peer-to-peer trading of precious homegrown energy. This will work through many microgrids, where households or buildings that produce energy through various renewable resources, like solar energy, will automatically trade their surplus energy to buildings or households that have an energy deficit.

A blockchain-based platform can enable companies, institutions, and individuals to get sizable returns from directly investing funds in renewable energy installations both in their local areas and throughout the world.

The blockchain will connect to a smart, electric meter, which measures the production of energy as well as usage of the homes and buildings linked to the network.

When a building generates an energy surplus, this smart meter will determine the most effi cient way to utilize this energy surplus.

Keep in mind that a transaction through the blockchain can automatically buy the energy. The chain records this meticulously. Moreover, the system transfers the surplus energy to the location which needs it most, all within a matter of minutes. Therefore, the task of managing supply and demand of energy between different consumers as well as a wide array of micro-energy generators is left up to computers completely.

Carbon Tax

In our current system, it is difficult to determine the environmental affect of each and every product. Hence, the price doesn’t cover their carbon footprint. This implies that there is little to no incentive for customers to purchase products with a low carbon footprint. Moreover, organizations have no incentive to sell these products.

This is where blockchain comes in as keeping tracking of the carbon footprint of every product using this technology would protect the relevant data from tampering. This will help determine the exact amount of carbon tax that can be charged at the point of sale. Keep in mind that if a product that has a significant carbon footprint is pricier to buy, it will encourage buyers to purchase products which are more eco friendly.

On the other hand, it would also encourage companies to assess and restructure their supply chains. This restructuring will help them meet the rising demand for these products. And that is not all. A blockchain-based and reliable reputation system can also give each product and company a score. The score depends on the carbon footprint generated by the products they sell.

Note that this will, in turn, make manufacturing much more transparent while discouraging environmentally unfriendly and wasteful practices.

Conclusion

Through examining the way blockchain technology works and considering its current limitations, we can clearly realize how this innovative and brilliant system could lead to a more responsible and cleaner world.

Blockchain technology has immense potential when it comes to revolutionizing the way humans interact with one another. Moreover, the technology also helps improves the ways to record information and exchange energy. With continual trial and error or experimentation, blockchain technology could be implemented in the everyday life. Hence, the technology can empower a greener and sustainable future.