Blockchain offers smart sustainability solutions
The origins of blockchain are clear, but the identity of its true creator remains hidden to us, even to this day.
It all began with an influential white paper, mailed to a list of people specialising in cryptography in 2008, signed off by a mysterious figure, known only as Satoshi Nakamoto. To this day, it is unclear exactly who Nakamoto actually is – a pseudonym for a single person, or a group of people? What is clear is the concept Nakamoto devised – blockchain.
Blockchain is simply the means with which to create a reliable digital record-keeping system, opening the door to the concept of cryptocurrencies – special digital-only units of exchange which use blockchain to record all transactions.
Bitcoin is one of the most easily recognisable forms of cryptocurrency, but has it redefined the role digital currencies could play in the world of tomorrow. Are cryptocurrencies just a passing fad along with blockchain as a whole, or does blockchain have much to offer to the global economy?
What is blockchain?
Decentralised blockchains are tamper-proof distributed databases. They are independent from any influence by policy makers or third parties. The information they convey is effectively written in stone, irreversibly in a digital sense.
What is the advantage of a blockchain?
By design, a decentralised public blockchain cannot be manipulated. This is because it is shared amongst the devices accessing it. It is impartial, as opposed to a central server system, which is open to being corrupted.
In the cryptocurrency world, this allows transactions to be kept on record permanently, accessible to anyone.
How can this aid more sustainable business practices?
Blockchain enforces transparency, which could be effective when it comes to business supply chains. To see this in action, see what Volkswagen is doing with blockchain technology below.
To understand more about the world of blockchain, cryptocurrencies and much more, read this useful guide here.
Counting the cost of Bitcoin
Through a number of cryptocurrencies, including Bitcoin, people all over the world have learned to embrace the concept of peer-to-peer electronic currencies. The idea was simple – users would allow their computers to ‘mine’ Bitcoin or whatever cryptocurrency they used, with a limited stock of said cryptocurrency being brought into existence.
Admittedly, using raw computing power to bring a finite number of Bitcoins into existence isn’t the most environmentally-friendly pursuit – the Bitcoin Energy Consumption Index estimates that the Bitcoin network consumes 77.78TWh of electricity on an annual basis, comparable to the amount of power consumed by the entire country of Chile.
In addition, intensive mining and other activities have caused Bitcoin to emit an annual carbon footprint of 36.95 Mt of CO2, putting it on a par with New Zealand. Bitcoin recently made headlines across the world, being likened to a digital form of gold, something of a safe haven for investors looking to protect their wealth during a time of economic instability.
The typical Bitcoin has a unit value of £25,000 as of January 2021 – this means its value has already risen ten times what it was worth in late 2018. Bitcoin’s lofty price allures many looking to make a quick buck, but its impact on the planet could be far higher.
Blockchain shows the way
All is not lost in the world of blockchain. The likes of Volkswagen have taken note of the advantages of using a blockchain to help procure raw materials in a more sustainable way. In 2019, the German car manufacturer started a collaboration with tech company MineSpider, to find a way of using blockchain to create what it described as ‘fair raw material procurement.’
Conventional blockchains work on the principle that they function as a log of intertwined blocks of data, which all fit together to form a complex digital puzzle. Each block is inextricably linked to one another, as they all contain condensed, encrypted information about each other. If a single block is altered in some way, it disrupts the chain as a whole and no longer fits, flagging up an inconsistency.
On a larger scale, a central server contains not one but multiple versions of these chains, all operating at once, copied thousands of times across a number of devices, with all the linked-up servers and devices creating a node. Any alterations made to the data shared across the node are immediately flagged up in their own way, allowing the system as a whole to protect itself.
When it comes to seeking raw materials in a complex supply chain, MineSpider was able to suggest the idea of a public blockchain, allowing Volkswagen to create a tamper-proof log between suppliers and sub-suppliers, letting them track the materials from the point of origin via a digital certificate.
As the system would be multi-layered and include private data-blocks, plus an added layer of encryption, manufacturers such as Volkswagen would be able to follow material from A to Z, safe in the knowledge that they had achieved their sustainability goals.