• How Can Bitcoin Help the Environment?

Business News

How Can Bitcoin Help the Environment?

Jun 09 2017

When most of us think of bitcoins, we imagine shady transactions taking place on the dark web; ransoms being paid to release hacked and encrypted data or funds being transferred to purchase illegal commodities. And that doesn’t even include those who’ve never heard of the term!

However, one scientist from the Swedish University of Agricultural Studies has seen potential in the underlying technology of bitcoin. According to Guillaume Chapron, author of a paper on the topic, the “blockchains” which carry time-stamped information about bitcoin transactions could provide a viable method of regulating environmental practices.

Technology and ecology in harmony

 At times, our knowledge of the natural world seems to progress almost hand-in-hand with our increasing technological capabilities. Indeed, there are a variety of ways in which technology is being implemented in environmental analysis, and Chapron believes that the blockchains which knit all bitcoin transactions together could become another weapon in the fight against unsustainable practices.

In layman’s terms, a blockchain is a sort of incorruptible record of events, with everything logged on a decentralised computer. How can this help the environment? Well, with complete transparency and no doubts about the veracity of blockchain information, Chapron thinks that the technology could help us mend our environmental ways through four key areas.

The fourfold benefits of blockchains

Chapron’s paper highlighted the four main advantages of introducing blockchains into our environmental practices. They are:

  1. Green practices in the supply chain. At present, the supply chain which delivers our food is incredibly long and complex, meaning there are plenty of opportunities for unscrupulous producers or transporters to cut corners without detection. With a blockchain, the sustainability of all of their efforts would be open for everyone to see.
  2. Ownership. In underdeveloped countries, disputes often arise between governments, companies and local communities about ownership of land. If an official land registry was recorded in a blockchain, it would provide a firm and immutable account of who owns what and since when.
  3. Policies. Currently, if you want to hold a vote on environmental policy concerning land, farming practices or development ideas, it takes a lot of time, money and effort – and is also vulnerable to corruption. With a blockchain election, people could vote remotely, easily and securely.
  4. Facilitating payments and improving incentives. Blockchains can be manipulated in such a way that a certain action (e.g. payment of a promised sum) is automatically triggered when a number of conditions (e.g. a quota of green energy is produced). Furthermore, they can also provide a virtual wallet for those without a bank account.

In each of the four areas, the advantage of blockchains boil down to transparency, which creates trust. Chapron believes trust is instrumental in creating a greener tomorrow.

Flies in the ointment

Despite these four benefits, blockchains are unfortunately not a cure-all tonic for the world’s woes. There are still several teething problems with the bitcoin technology, including its speed, energy consumption and lack of failsafes.

For example, if a personal forgets or misplaces their digital security code, their funds will be lost forever. It’s also almost three hundred times slower than Visa as a transaction handler, meaning it would be unfeasible on a large scale. And finally, it’s incredibly inefficient in terms of energy usage; at present, it consumes almost double the amount of energy that the whole of Google does.

If these kinks can be knocked out, however, Chapron believes blockchains and bitcoins could provide the key to transparency that the world needs in order to solve its environmental problems, once and for all.

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