Two years ago nobody talked about blockchain. Now the distributed ledger technology behind cryptocurrencies like bitcoin is suddenly everywhere.
(See: Blockchain Is the Most Disruptive Invention Since the Internet Not Just In Finance)
Enthusiastic experts predict that in the coming 10 years, blockchain will change the way we do everything, from financial markets to health records to supply chain management, and so much more. It’s near impossible to name all the applications for the new technologies, but here are a few that will contribute to making our world a better place (or even save the planet).
Most visible for average users will be the impact of blockchain on the energy sector. The power grids of today are usually centralized oligopolies dependent on a very small selection of power sources (i.e. a few nuclear plants, augmented by oil and gas).
That means long distribution lines, bad management of demand, and susceptible to power outages during earthquakes and other natural disasters.
A peer-to-peer blockchain-based energy system would reduce the need to transmit electricity over long distances. It will certainly reduce the need to store energy in inefficient ways, which means fewer batteries, for example, which are expensive and need a lot of raw materials whose extraction often causes massive pollution. Imagine if every house had a solar panel and a wind turbine, or produced electricity from new smart materials on the outer walls.
Add road surfaces that produce kinetic or solar energy, and add in all the existing infrastructure like nuclear plants, oil or coal. Now imagine every one of these sources could trade with every other source, all managed automatically by a computer system, with unfalsifiable records based on the blockchain. And everyone gets paid for it into their digital wallet. This is the future of energy.
Current systems for recycling are often cumbersome and don’t give enough incentives to participate. Even the best intentions fall foul to human greed and laziness.
Here then is the future of recycling: you identify yourself with your smartphone at any recycling station and deposit your empty bottles (or batteries etc.). The system scans what you deposit and credits your electronic wallet.
If done right, this system could enable users in countries without local recycling industries to get paid the same way as users in locations with large recycling operations.
Companies could set up recycling plants and literally collect garbage from anywhere in the world. It would make it easy to transparently track data like volume, cost, shipping data, and profit, and to evaluate the impact of each location, company, or individual participating in the program.
Think one step further and the recycling containers could be fitted with solar drone technology and fly themselves to the recycling center when full.
Supply Chain Management
The way we transport goods around the world is wasteful and damages the environment. Industry 4.0 is bringing us a revolution of already connected devices; 3D printing means more decentralized manufacturing in much smaller batches.
See also: What Industry 4.0 Really Means for Asian Manufacturers
Blockchains can be used to track products from the manufacturer to the shelf and help prevent waste, inefficiency, fraud, and unethical practices by making supply chains more transparent.
They improve shipping ways, volumes, avoid empty shipments and will thus allow for fewer ships and trucks. Combined with drones and solar-powered airships we could even see pollutant-free solar shipments of individual consignments over long distances, secured, tracked and paid for through blockchain technology.
Or think about this: a blockchain enabled 3D-printer as a public service, secured, tracked, and monetized through blockchain.
The food industry is forging ahead hear with the tracking of origin and transportation paths of food.
From waste and transportation, it is an easy jump to the overall enforcement of environmental protection. Blockchain is ideally suited to manage records and incentives.
In can be difficult to track the real impact of environmental protection plans, agreements, or even international treaties. Very often incentives are misaligned, or corporate interests and even criminal elements prevent successful implementation.
Blockchain could discourage stakeholders from reneging on their commitments, misreporting progress, or giving in to pressure from nefarious players because the technology would allow the reliable tracking of important environmental data.
After all, data in the public ledger of the blockchain is transparent and traceable forever. Environmental protection is at its core a contractual problem. Just like blockchain will revolutionize the storage and manipulation of legal records, it will reduce or eliminate fraud and manipulation of environmental schemes.
Like environmental protection, development programs are contracts between remote parties that need to be enforced.
When you donate to a charity, non-profit, development program or similar entity, you hardly ever know what really happens with your money. Bureaucracy, corruption, and inefficiency are still common in the charity space. Blockchain technology can ensure that money intended to be a reward for conservation, or a payment to a specific cause does not disappear into unintended pockets through bureaucratic labyrinths.
Blockchain-based money could even be released automatically to the correct parties in response to meeting specific environmental targets. This is particularly relevant in countries without modern banking structures. In particular, there are several schemes under consideration for the tracking of water usage in very dry areas of the planet.
In the current system, the environmental impact of each product is difficult to determine, and its carbon footprint is not factored into the price.
This means that there is little incentive for consumers to buy products with a low carbon footprint and little incentive for companies to sell such products.
Tracking the carbon footprint of each product using the blockchain would protect this data from tampering, and it can be used to determine the amount of carbon tax to be charged on at the point of sale. If a product with a big carbon footprint is more expensive to buy, this would encourage buyers to buy products that are more environmentally friendly, and would, therefore, encourage companies to restructure their supply chains to meet the demand for such products.
Such a blockchain-based reputation system would compute a score for each company and product. This would make manufacturing more transparent, and discourage wasteful and environmentally unfriendly practices.
You could automatically see (e.g. by scanning a barcode on a product) if it was made by an environmentally sound low-carbon facility or a wasteful polluter.
Access to credit
Just as it tracks financial payments and all the data mentioned above, blockchains could be configured to manage access to credit.
This would enable millions of people to escape poverty, by giving them easy access to small amounts of money and start their own business. Unlike the microfinance banking model, such a credit blockchain would be entirely transparent and thus safe from abuse.
In short, blockchain technology allows the management of incentives.
Consumers, companies, and governments would immediately see the direct effects of their actions on the planet. The blockchain can be used to transparently track a variety of data like the carbon footprint of each product, the greenhouse gas or waste emissions of a factory, or a company’s overall history of compliance to environmental standards.
Companies and individuals can be incentivized to act in an environmentally sustainable way through the availability of information, tokenized credits being issued for taking certain actions, or blockchain-based reputation systems.
There are many hurdles to overcome. We still do not know if the blockchain is really as safe and unhackable as promised. As a cybersecurity consultant I spoke to for this article said: “sooner or later, everything will be hacked.”
The second hurdle is the willingness of governments to change, and the willingness of participants to live in such a transparent world.
But I believe that managing incentives on the micro-level with blockchain could completely change the drivers of our economy, and benefit not only us but the future generations living on our planet.
4 thoughts on “How Blockchain Will Save the World”