How Blockchain could save, not tarnish, the environment

Humanity started leaving its print on the environment. It happens long before the invention of cars, computers or the internet. Dramatic changes to the environment started incubating with the industrial revolution. It was the that humans discovered burning fossil fuels would release unprecedented energy levels. The revolution initially started in Great Britain in the mid-1700s. By the 1800s technology crept its way into the rest of Europe and North America. Soon after, machines started to replace human labor.

To give an example, in 1790, the first power loom was invented, and completely changed the lives of weavers. In 1813, there were 2.400 power looms in Britain. By 1850, that number multiplied to 250.000. During this period, many other breakthroughs were made in all the major industries, including medicine. Those advancements radically altered living standards. As a result, the world’s population could grow substantially from 700 million people in the mid-1700s to almost 8 billion today!

The booming population created a growth in demand for food and housing. Consequently, the need for energy and natural resources increased. Unfortunately, with increased production comes increased waste. Today, global pollution is one of the most damaging consequences of unsustainable development.

An eye opener

It was only in 1960 when the world started understanding the effects of automatization. This was after Dr. Rachel Carson, biologist and science and nature author, published the “Silent Spring”. Dr. Carson introduces the book with the harms in using DDT and the effects on wildlife, insects and human beings. In addition to she explains the effects the chemical industry has on the environment in general. Basically, she theorized the gruesome future of our planet if nothing changed. “Silent Spring” became a bestseller. For the first time in the history of industrial evolution, humanity’s eyes were opened towards the importance of sustainability.

What now?

Consequences of the past 300 years of technological evolution left us in a challenging world. Environmental problems are only growing in numbers. Solutions for natural resource exhaustion and climate change are desperately needed. Deforestation and pollution led to the ozone layer depletion, and we can see the effects every day as the arctic poles continue to melt and break apart.

The good news is that there are organizations and initiatives all over the world working towards a better, more environmental, future. For one, the use of Chlorofluorocarbons (CFCs), the chemical responsible for damaging the ozone layer, was banned in 1996. As a result, during the Antarctic winter between 2005 and 2016, NASA researchers have observed a 20% decline in ozone depletion. However, changes still need to be made. In December 2015, the COP21 in Paris confirmed the importance of fighting against global warming. The emphasis was on developing technologies and finding sustainable environmental solutions.

One technology, in particular, that has recently gained much attention for the potential to impact our environment, is blockchain. This revolutionary technology, however, has both positive and negative effects. For now, the technology is still rather nascent with its shortcomings. A classic critique towards the blockchain is Bitcoin’s mining process. This allows for a transparently distributed ledger with zero downtime, but also requires high energy consumption. According to Digiconomist, the power used by the Bitcoin network is higher than the total amount of electricity used by New Zealand in a year. In other words, the mining process needs to be rethought to a more sustainable solution.

The path towards a better blockchain

As a nascent technology, blockchain is not perfect. However, it can play a key role to solve current environmental issues. Moreover, developers have already started working on creating better solutions for using blockchain in a more efficient and sustainable way.

Originally, blockchain was based on a reward and cryptographic sound system known as “Proof-of-Work”. This system allows miners to compete and find the next block to mine individually. They would then solve the work expressed by the Bitcoin protocol’s algorithms. Finally send the result to the network, only for it to verify and confirm the result. This has caused an arms race, with ever more powerful miners collecting their raw computing power in mining pools. As a result, it has caused issues of centralization with large mining pools controlling the Bitcoin network almost entirely.

Proof-of-Stake vs. Proof-of-Work

In order to solve both the energy consumption issue and the risk of centralized mining facilities, blockchain developers have created alternative algorithms, such as Proof-of-Stake (PoS). This algorithm randomly selects forgers based on either a combination between the lowest hash value and the size of the “stake”, or the age of the coins the user owns. This way the mining process is completely random and every forger has a chance of participating in the process. This means that central powers cannot take control of the mining process. As opposed to the Proof-of-Work algorithm. Moreover, foragers have to invest a “stake” as insurance. So in case of fraud, the miner loses his stake, discouraging tampering with the process.

Delegated Proof-of-Stake

Similar to Proof-of-Stake, the Delegated Proof-of-Stake (DPoS) system works on coin power or voting. Each coin represents one vote, therefore the more coins you have, the stronger your voting power. The voting is carried out to decide on “witnesses” or computers responsible to secure the network. This democratic way of selecting the miners from the network ensures that :

  • everyone has a say in the decision, and the more you work, the more you can vote.
  • witnesses need to rise to expectations in terms of respecting and abiding the rules of the blockchain, otherwise, they will be replaced.

As it is with PoS, DPoS does not allow a centralized power to take over mining, nor does it result in massive energy consumption. However, the voting system does encourage users to work closer together and bring more value to the network.

Blockchain solutions for the environment

Supply chains today

Climate change is not the only issue our world is facing right now. Food supply chains are also a major problem, due to the high demand of food needed by our ever-growing population. Escherichia coli, Salmonella, and chemical contaminants outbreaks have increased public anxiety regarding farming, food processing, and marketing. Moreover, food safety accidents, such as the “horsemeat scandal” in Europe in 2013 are becoming more and more common.

These are only a few of the many reasons, why people are concerned about the origins of their food. A survey conducted by the Food Marketing Institute (FMI), showed that the majority of consumers care equally for both ethical fairness as well as minimal processing when it comes to food.

eco lables

In order to create trust, the food industry introduced several different labels, such as Fair Trade, the FSC label and Ø-mark. However, according to the “2016 Food Revolution Study” from Chicago-based Label Insight, 75% of respondents stated that they didn’t trust food labels on the packages. Another challenge with food labeling is that many consumers do not know the meaning behind the labels.

Blockchain can help solve this trust issue. The technology uses algorithms to encrypt information and store it in distributed ledgers. Any and every change in data is automatically shared with the network as a new ledger. Consumers gain access to the supply chain and can track products from the manufacturer to the shelf. Using this technology, producers could no longer misinform consumers without the network knowing and rejecting the false information.

Already working towards a solution

Companies around the world have already started working towards implementing blockchain solutions into supply chain management. IBM takes the lead by collaborating with many leading companies within the food industry across the globe. Walmart and IBM cooperate to enhance visibility, accountability, traceability, and safety throughout the entire food supply chain.

Creating transparency in the supply chain

Another example is Provenance. This is a social enterprise building a system for product supply chain and life-cycle transparency using blockchain. Aside from validity and transparency of information, the technology is also intended to reduce the high initial cost/benefit ratio for participants. It could be a useful tool to both reduce fraud and help clients make more informed choices.

This solution allows physical products ho have a digital ID that answers the two basic questions we all ask: “Is this product what it claims to be, and where does it actually come from?”. The ID is traceable on the blockchain and it ensures transparency through a clear and public record of the supply chain

Recycling in exchange for crypto tokens

A good initiative using the same rewarding system for recycling is Recycle to Coin. This is the first project that provides an incentive to recycle in exchange for blockchain-based digital currency. The principle is simple and could be supported by everyone in the world.

The idea behind the project works the same way as the normal  “reverse vending machines” we have in supermarkets today. The difference is that, instead of receiving a ticket with a barcode that you can exchange for money or goods in the shop, you would get a QR code that you scan and receive crypto tokens. The tokens will be directly transferred to your wallet where they can be exchanged for other cryptocurrencies. This way one can use the digital currency in any way they wish while being encouraged to recycle and be an activist for the environment.

Blockchain to reduce plastic pollution

The Plastic Bank is another project meant to stop the flow of plastic into the oceans while reducing poverty in third world countries using blockchain technologies. The company is setting up collection centers where people can deposit plastic in exchange for other goods and services such as currency, phone charging, or cooking fuel.

The company’s two founders, David Katz and Shaun Frankson, are also collaborating with IBM and IBM customer Cognition Foundry. They want to create a reward system for collectors through digital tokens. Indeed, most workers are from disadvantaged areas where banking systems are corrupt and dealing with cash could be dangerous due to crime. However, most of them possess mobile phones. Making digital transactions through blockchain is a way to empower people in the long term in order to build a better and brighter future.

Saving energy with blockchain

According to LO3’s white paper, 86% of the energy produced in the US is lost, and only the remaining 14% is used. This small portion of energy used is called exergy and the energy wasted is referred to as anergy. In collaboration with Concesys, LO3 is proposing a blockchain solution to transform “anergy” into “exergy”, using smart energy meters. The project is meant to transform unused renewable energy. For example to convert pano solar energy into energy tokens. The persons creating the energy are called prosumers, meaning users that are both consumers and producers.

Prosumers tokenize their excess and store it in the smart energy meters, from where they can sell the tokens to others. Once purchased, the tokens are transferred to the buyer’s smart meter. This, in turn, measures the amount of energy consumed by the buyer and compensates for it with said tokens.

The potential of this system is truly revolutionary. As the company itself describes it, we would have access to energy even in situations of crisis. One example given during a presentation for DECON1 in 2016 explains how after hurricane Sandy hit New York, almost the entire city was out of power. All except for one small region, that was in fact supported by the system. This project can be extended and prevent situations like this all over the world. Moreover, energy can be produced and shared locally, avoiding massive losses suffered during while delivering energy from the source to consumer.

Others to reap the benefits of the solar power

SunContract is a similar project launched on April 13th, 2018, in Slovenia. The practicality of this project is based on the same idea of saving energy and selling, buying or trading the excess within a peer-to-peer network.

Unlike LO3’s initiative, that is based on the US energy market, the SunContract project is focused on the European market.

Blockchain as a reinforcer

In the everlasting fight with governmental and corporate corruption, blockchain technologies could actually work as a reinforcer. Take for example environmental treaties or non-profit organizations. By using blockchain technologies, the possibility of manufacturing facts or altering data is virtually impossible.

This means that if a global treaty is signed and stored in the blockchain network, neither governments nor corporations could look the other way while one or the other is breaking the agreement. The validation system blockchain runs on would simply not allow it.

The same goes for non-profit organizations who would receive funds and store records on the network. The chances of fraud and corruption would be reduced to a minimum if not eliminated altogether. The network would enforce the contract behind the agreements or promises. 


Blockchain provides transparency, efficiency, and security that could strongly benefit the environment through many eco-friendly initiatives. The number of startups using blockchain and cryptocurrencies is continuously growing, as we can see many examples of ideas surfing the waters. And, yes, blockchain is not perfect, because it’s a still new technology, but developers and visionaries around the world are working to improve that.

Together we can change the way we produce, store and use energy, both us as individuals and our governments worldwide.

In short, blockchain is a way to fix environmental problems. This is just the beginning of a new era where everyone could get involved.

If you want to learn more about blockchain, visit our blog and read more about how blockchain is shaping the future or decentralized apps vs web apps.  

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