Blockchain technology and sustainability are two hot topics of the latest years and many are asking: “How can features blockchain support sustainability efforts?”
Blockchain technology, thanks to its unique features such as immutability, decentralization, and security, can be a very useful tool to support our present and future sustainability efforts. Moreover, there are already a number of examples of how this technology can be leveraged for sustainable development.
Unfortunately, cryptocurrencies have a bad environmental reputation for requiring immense energy to run their networks. However, this technology is still very young and grew extremely quickly, so it is quite normal for it to not be energy efficient. In recent years a lot of development efforts have been made to get more efficient blockchains and there are already more sustainable alternatives to Bitcoin. This trend is only going to improve with time.
Moreover, businesses worldwide have tested several technological tools to mitigate climate change and challenges related to the loss of biodiversity. One of the tools used to support sustainable business practices is blockchain technology.
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What is blockchain?
Blockchain is one of the latest digital transformation technologies. It is a secure decentralized ledger that is also always in consensus. This is ledger is digitally distributed to monitor and verify transactions.
The technology allows a group of participants to share data and come to a consensus without the need for any trusted third party. Blockchain technology is a trust machine.
Blockchain is based on a mathematical formula that is fair, impartial, and honest and it can not be subverted.
Additionally, the technology eases the collection, integration, and sharing of transaction data from many sources at once.
Data is broken down into chained blocks with unique identifiers. Blockchain eliminates data duplication by providing data integrity with a single trustworthy source. This also increases security.
The blockchain system prevents fraud and can’t tamper with the blockchain ledger. In other words, the ledger can be shared but cannot be tampered with.
Although blockchain is known to be the technology behind cryptocurrencies like Bitcoin or Ethereum, environmental experts are now using it as an effective tool in solving climatic challenges. The tool can be used to track the product’s sustainability and to monitor pollution.
Blockchain is a relatively new technology and you may not be familiar with it. So it’s important to know the main features of blockchain technology before diving deeper into how this can be used as a green tech to benefit our sustainability efforts.
Main features of blockchain technology
Can the features of blockchain support sustainability efforts? To answer this question, we first have to understand the main features of blockchain.
Immutability means something that cannot be altered. This feature ensures that the technology can be trusted because it remains unaltered.
Blockchain technology and banking system work differently. Rather than depending on centralized and trusted authorities, blockchain technology can guarantee that the data on its ledger is genuine and trustworthy by leveraging cryptography.
Each node has a duplicate of the digital ledger. Each node confirms its validity to add transactions. When the transactions are considered genuine and valid by the majority of the nodes, then they’re added to the ledger.
Once a block has been added to the distributed ledger, it can’t be altered anymore. This encourages transparency and eliminates any possibility of corruption.
The Blockchain network is decentralized, meaning that it has no governing authority to look after the framework. Instead, a collection of nodes (called miners), distributed all over the world, maintain the network integrity and keep it secure.
This is one of the major blockchain features that allows guaranteeing trust in the collected data. In fact, the only way to alter the data on the ledger is if the vast majority of the nodes (depending on the different blockchains in use, for the Bitcoin blockchain this is 51%) agree to make that modification at the same time.
This is extremely unlikely if the network of the blockchain miners is properly decentralized. This means that decentralization is a feature that enhances the security of the network and makes sure that no single entity could control and tamper with the data on the ledger.
3. Secure and trustworthy data
The data on the blockchain is very secure and no single entity can alter the data on the ledger in their favor.
The network uses encryption to guarantee its security. But how secure is it compared to other technologies? it’s much more secure thanks to cryptography and how this is used to validate transactions.
Cryptography, together with decentralization, provides another layer of security for users.
4. Distributed ledger
The blockchain ledger is distributed to all of the computers that are part of its mining network.
Most of the currently available blockchains are public. A public ledger provides information regarding a transaction and its participants. So anyone can see all the transactions and data stored on a public blockchain.
There are also privacy blockchains such as Monero or Pirate Chain, where the information stored on the distributed ledger is not visible to the public, but it can be revealed with a special viewing key available to the wallet owner.
This means that anyone with the proper viewing key can see the transactions of a specific account or just the data of a specific transaction.
Blockchains are successful due to their consensus algorithms. The architecture is innovatively crafted, and the consensus algorithm plays a massive role. Consensus mechanisms help the blockchains to maintain the integrity and trustworthiness of the stored information.
In other words, the consensus is the main decision maker for the active nodes on the network. At this point, the nodes can agree quickly and relatively faster.
Consensus is critical for the system, especially while nodes are authenticating transactions. For this reason, this is perhaps the most important of the blockchain features.
6. Faster settlement
Blockchain technology is faster compared to traditional banking systems.
Traditional systems may sometimes take days to process a single transaction after completing all the settlements. On the other hand, blockchain provides a much quicker settlement, in the order of minutes or even seconds.
This allows quicker trusted transactions of money and data between the users. The process is time-efficient and cheaper compared to traditional banking or intermediaries.
How does it work?
Blockchain can be considered a historical transaction record. The blocks are chained in a sequence. Cryptographic trust and assurance tech use a unique identifier in each transaction.
The chain is forged with trust, accountability, transparency, and security. This makes it easy to access and share the data with different organizations and experts.
This mechanism is often referred to as consensus-based trust without the need for any third party. All trading partners maintain a transaction record encrypted within a scalable mechanism that cannot be renounced.
Blockchain doesn’t need any extra overhead or intermediaries. A single decentralized source of truth means lower expenses in implementing trusted business interaction among participants.
This unique technology is good news to organizations that need to secure and share real-time transaction data. This is why blockchain technology can be so useful to support sustainability efforts.
Blockchain can support sustainability Efforts
Blockchain is often considered in terms of cryptocurrency. However, it can be applied way beyond that.
Technology has emerged as the perfect solution for ESG metrics (Environmental, Social, and Governance). That’s because blockchain contains data that cannot be altered. This special feature makes blockchain a perfect tool for maintaining accurate sustainability records.
Data recording can be a tedious process, especially when done manually. However, distributed ledger technology simplifies the process by presenting real-time data.
Here are the ways in which blockchain supports sustainability efforts:
Helps eradicate poverty
Blockchain technology is good news to those living below the poverty line.
Blockchain can use a decentralized registry to shield the right of property owners against fraud. This can be an issue especially in Africa and less developed countries. The technology can ensure the right ownership transfer after a sale.
Additionally, through blockchain land registries, individuals can more easily access banking facilities. This is a good chance for the poor to prove their existence. The technology is already being implemented in various countries, including Bermuda, Brazil, Georgia, and Ghana.
Additionally, blockchain technology will ease the tracing of land titles, increasing farmers’ income in poor countries. Apart from poverty eradication, the technology allows a global record of ownership.
Blockchain technology involves several practical applications, including reducing business expenses and risk to ensure more accuracy and accountability. Similarly, the execution of blockchain technology could significantly impact hunger relief.
Blockchain technology, together with other green technology examples, is the potential remedy for hunger worldwide. Because blockchain helps prevent food wastage and unequal distribution of resources. Blockchain also is used to fight hoarding in the supply chain.
In terms of the food processing system, it performs the data on the number of resources sold to agro and green tech companies and channeled to suppliers.
This transparency time is used in purchasing while trimming the costs involved. This eases the purchasing of food by the poor and prevents the wastage of surplus food. Blockchain technology makes the entire process efficient and more transparent.
Blockchain promotes health and wellbeing.
You must be wondering whether blockchain can promote happiness, health, and wellbeing. The technology has been used by many experts across the world, and for sure, it promotes health and wellbeing.
A good example is Clinicoin – a health and wellness platform based on blockchain technology. The platform promotes collaboration between users and medical organizations.
It features a HIPAA-compliant health information channel while connecting members to those responsible for maintaining their health. Additionally, the platform allows medical care providers to reward their patients for embracing healthy habits.
The patients and healthcare providers will be empowered through a blockchain-based health application since the platform improves data management, real-time integration, and real-time analysis. Additionally, healthcare providers will earn based on the quality of the service they provide. This creates new opportunities emerging in Al apps. The innovation of OSF is among the projects that will implement blockchain technology to enhance health and wellbeing.
The Health and Human Service (HHS) is working to maintain the pace in this field and determine areas where it can promote health efforts. It also maps the blockchain ecosystem while promoting a dialogue and collaboration partnership.
Promotes quality education
Blockchain technology can help to deliver quality education in several ways. This technology has been shown to provide security, integrity, and anonymity. Also, the technology can encrypt the data of all parties involved.
Additionally, it increases transaction rates for learning institutions and students. It helps in developing a decentralized, secure system of data.
To develop a quality education system using blockchain technology, educators need to create a pertinent educational infrastructure. Such infrastructures may include MOOCs, which connect less knowledgeable people with more educated fellas.
Immutability is one of the advantages of blockchain technology for learning institutions. Through blockchain technology, no one can alter the details of a student’s certifications.
It can be easy to alter the paper records. However, with blockchain, it is impossible to tamper with the data.
And since it’s impossible to alter blockchain records, blockchain-based education enhances transparency and sustainability. Additionally, it can reduce plagiarism concerns.
Blockchain promotes gender equality
Blockchain innovation has brought about the excitement around the rising and falling of digital currencies. However, one does not only benefit financially from the technology.
Many experts worldwide are implementing blockchain technology to promote gender equality in all personal and professional lives facets. Blockchain technology makes it easier to access finance, establish a new form of identification, and improve women’s financial management.
Traditionally, men were favored by professional departments such as computer science and IT. This made such sectors male domains. While some activists are working on this to bring changes, many women and unrepresented minorities are getting involved in blockchain.
Improves water and sanitation
The world is facing water scarcity, and blockchain technology can improve the management systems responsible for water and sanitation, supporting sustainability efforts.
Water management regulations are quite complex, and water demand is rising. This situation causes significant challenges to the current water management methods.
Implementing blockchain technology can consolidate the current water management system while integrating automated work processes. Additionally, the technology encourages trust, transparency, and accountability in the water and sanitation system.
Through better financial services, blockchain technology encourages communities to promote sanitation. By rewarding conservation programs, communities may be encouraged to implement water management actions. This implementation may lower water pollution, making it easy to access clean water.
Affordable Energy Management Systems
Using blockchain in managing renewable energy production is the perfect way to promote efficiency and lower costs. Blockchain system encourages coordination between utility organizations and customers.
For instance, NREL researchers are looking to create software that allows consumers to control their power generation and channel it back to the grid. Since electricity feeders are often meant to handle one-way flows, blockchain tech can help solve this problem.
Blockchain technology enhances distributed energy production. Through blockchain networks, the market can easily allocate production and use other alternative types of energy.
Companies such as GRC are leveraging blockchain technology to convert biomass into electricity. The company scales the technology to larger projects.
The technology is already being implemented in the Port of Rotterdam, which makes up 35% of the Netherlands’ carbon emissions.
Today, docked ships may require variable power to run their equipment. These ships used diesel generators in the past, which significantly polluted the environment by emitting excess carbon. Now instead they use shore power.
Blockchain-based energy management systems are supporting sustainability and can help develop more sustainable projects in the coming years.
Enhances economic growth
Managing transactions between countries using blockchain technology is the perfect way to address three pressing issues related to sustainable development: inclusion, trust, and multilateralism.
This will only be achievable if the government, civil society, academia, and non-governmental organization find other ways to handle these issues and utilize blockchain technology to encourage inclusive growth.
Blockchain technology is constantly gaining momentum and can support our sustainability efforts in many ways.
The technology is currently implemented in many organizations, and it’s shown to deliver good results.
Besides financial benefits, blockchain technology can support sustainability efforts, and the technology is currently used globally for that purpose.