How Blockchain Technology Improves Environmental Sustainability

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When first considering blockchain, we typically only consider what we see on the surface: a digital ledger technology used for increased security and efficiency in areas such as data storage, financial transactions, asset management and the like. But more and more, we are starting to see that blockchain’s capabilities reach a wider breadth of applications than it seems at first glance. And one of the most game-changing uses for this burgeoning technology is its role in increasing sustainability.

There are reports that blockchain and cryptocurrencies are energy inefficient, with one study finding that Bitcoin has a carbon footprint comparable to that of New Zealand. While it’s true that blockchain uses a great deal of energy, particularly in the act of mining cryptos, it pales in comparison to the footprints of our nation as a whole. In addition, many cryptocurrencies have already begun to seek out solutions for reducing emissions through changing code, hardware, and other methods.

A 2019 report by the World Economic Forum backs this up, calling blockchain “the Holy Grail for implementation of various climate change policies, including renewable energy deployment, carbon markets, international financial transfers and enforcement of climate regulations,” and predicting that not only will blockchain’s energy usage decline in the years to come, but that it will enable other climate-change solutions.

Specifically, the report believes that blockchain’s decentralized record-keeping can allow for greater transparency as the world’s nations enact climate-change initiatives, per the 2015 Paris Accord. Moreover, blockchain can allow for more efficient power management through its use of smart contracts, and also enable peer-to-peer transactions, as in cases where individual consumers buy and sell their excess energy.

In addition, there has been the introduction of new cryptos that themselves address sustainability issues. One example is Co2Bitcoin, which was introduced on Jan. 28, 2021, and which will be used to help nations finance various projects that combat the effects of climate change. A total of 17 nations have entered into partnerships with Co2Bitcoin.

All of this feeds into the larger mission set forth by the United Nations when it established its Sustainable Development Goals (SDGs) in 2015. There are 17 of them, covering such matters as the battles for quality education, human rights and gender equity, the fights against hunger, poverty and global warming and the ongoing cleanup of the air and oceans. Together they represent a call to action for countries around the globe, and by extension organizations and businesses within those countries, with the idea being that all 17 SDGs be achieved by the UN’s target date of 2030.

Blockchain and its wide range of applications can help on this mission.

For example, The World Food Programme leads an effort called Building Blocks, where they utilize blockchain technology to alleviate hunger and deliver food assistance to Syrian refugees. Blockchain allows for the facilitation of direct cash transfers to those in need while protecting beneficiary data, controlling financial risks, allowing for greater collaboration, and reducing overall costs. To date, blockchain has been used to aid over 106,000 refugees. This application of the technology directly applies to SDGs such as zero hunger and good health and well-being.

Blockchain’s ability to effectively monitor, store, and transmit data will also be instrumental in measuring and quantifying clean energy and carbon emissions. What essentially amounts to the tokenization of energy would give us a massive increase in transparency, and therefore accountability, in regards to who is utilizing clean energy or who is still relying on emission-based energies. Creating something that tangibly represents this data and is given value can lead to the creation of incentives for businesses and governments, and new business models could form around environmental sustainability.

This transparency — along with increased security — is a vital feature of blockchain that allows it to cover a lot of sustainable ground. The distributed ledger technology can also be used to prevent and combat institutional weakness. For instance, blockchain can provide real-time visibility of how governments are using and distributing taxpayer money or international loans. A secure system means that we can rely on accurate information to hold governments and their officials accountable for any potential mismanagement and even corruption. For developing countries, this could prove instrumental in creating stable institutions for citizens to live within.

While these are only a few examples, it’s become evident that blockchain and sustainability truly go hand in hand. But at the same time, it’s important to understand that blockchain, like all technology, is a tool and not a silver bullet, as Blockchain Berlin puts it. When it is applied correctly, it can help us coordinate sustainability in meaningful ways between individuals, communities, organizations, governments, and countries as a whole.

The hypotheticals of blockchain application may still be far out yet. But I have a feeling that as sustainability continues to become a prevalent (and necessary) factor in living within a globalized society, blockchain will soon become one of the bedrocks of a better and more efficient world.




Don Basile: tech innovator, venture capitalist, entrepreneur, advisor. Goal: To work with great teams to help great startups thrive.

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Don Basile

Don Basile

Don Basile: tech innovator, venture capitalist, entrepreneur, advisor. Goal: To work with great teams to help great startups thrive.

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