The promise and peril of blockchain

Published onSeptember 19, 2018

When the financial crisis of 2008 struck, it left in its wake devastated economies and a general distrust of financial markets and the institutions meant to hold the industry to account. So when a shiny new cryptocurrency named Bitcoin emerged later that same year, promising transparency, incorruptibility and freedom from middlemen such as banks and traders in transacting, there was hope that it would revolutionise the global financial system. Ten years later, Bitcoin hasn’t come close to replacing money, but the underlying data storage technology it was based on, known as blockchain, is making waves in the field of sustainability. Blockchain has been applied to supply chains to trace the origins of seafood, and to turn plastic waste into a source of income for the poor…as the blockchain industry grows, so too has the excitement around its potential to help deliver more environmentally friendly ways of living and working. From making sustainability reporting less painful to swapping clean energy between neighbours and unlocking climate finance, it would appear the only limit is creativity. One big potential use for blockchain is in the carbon markets emerging around the world, where the sheer volume of trades and complex network of players—including producers, certifying bodies, middlemen and traders—creates room for manipulation and fraud…

…in the energy sector, blockchains are enabling peer-to-peer transactions with the help of smart contracts. Shanghai-based Energo Labs uses this combination to create a community-based clean energy trading system. Households with solar panels and smart meters can sell excess energy as Watt tokens by putting up a sales order through the company’s mobile app. The system’s smart contract, which operates on blockchain techology, automatically matches the sales order to purchase orders created by other users, and completes the transaction without the need for human intervention…blockchain alone will not cure the social and environmental evils of the age, say blockchain experts. “I’m increasingly concerned that many think blockchain is the holy grail that will solve everything,” remarks Giricz. Blockchain isn’t without its weaknesses. Experts have said that although immutable once inside the system, data that is entered into the blockchain has to be first verified in the real world, which will take effort and resources…

Source: https://www.eco-business.com/news/the-promise-and-peril-of-blockchain/