The World Economic Forum (WEF) recently released a paper called, “Building Block(chain)s for a Better Planet.” The research paper was authored in conjunction with PWC and Stanford University’s Stanford Woods Institute for the Environment. It is an overwhelmingly positive piece for blockchain, and proposes numerous areas where blockchain could make a big difference.
According to the report,
“Blockchain use-case solutions that are particularly relevant across environmental applications tend to cluster around the following cross-cutting themes: enabling the transition ton cleaner and more efficient decentralized systems; peer-to-peer trading of resources or permits; supply-chain transparency and management; new financing models for environmental outcomes; and the realization of non-financial value and natural capital.”
Perhaps the most interesting idea that is contained in the above statement is the idea of “non-financial value.” In many ways, modern culture has become laser-focused on making money, while the nature (the underlying value) of money has been all but forgotten.
The World Economic Forum Sees Promise in Blockchain
- 1 The World Economic Forum Sees Promise in Blockchain
- 2 Getting Past the Hype
- 3 The Top 4 Areas Where Blockchain Could Make a Difference
While rather dryly written, the report raises some environmental issues that don’t often come up too often in the press. Blockchain does have the ability to reduce inefficiencies, which can also be a big benefit to our global ecosystem.
The report goes on to say that, “Even though we have experienced a very positive economic growth (real output grew 20 times and 700 million people have shifted into the middle class), this has happened at the expense of our natural environment; pursuing economic growth, and thus demand, is putting increasing pressure on our environment,” which is a fair point to make.
Getting Past the Hype
There has been a lot of hype surrounding blockchain.
The word ‘blockchain’ was nearly synonymous with cryptos until recently when people started to wake up to the capabilities that Distributed Ledger Technology (DLT) has. The WEF report seems to fade the smoke and mirrors that many are caught up in, and drives to the underlying potential that blockchain brings to numerous areas of commerce.
The WEF cited the energy sector and utilities as a great place for blockchain applications. Of the hundreds of ICOs that came to the market last year, less than 1% of them involved energy or utilities. The WEF report identified 65 use cases for blockchain, and many of them fall into the energy sector.
The Top 4 Areas Where Blockchain Could Make a Difference
The WEF identified 8 areas where blockchain could become a stand-out technology. Here are four of them, all of which could lead to new businesses that create real social value for everyone involved.
ONE Transparent Supply Chains
The WEF might be a little late to the blockchain party in the logistics sector. They see blockchain as ushering in a new era in how global supply chains function, which falls into line with the platforms that companies like IBM are rolling out in the real world right now.
TWO Sustainable and Decentralized Resource Management
A centralized resource distribution model was the best we could do. In a world where coal or natural gas was the backbone of the electrical grid, centralized distribution by sophisticated parties probably was the best way to go. Now that non-traditional power systems are viable, it is probably time to make some changes to how we allocate energy.
THREE New Forms of Finance and Investing
The financial system is long overdue for a major overhaul. Blockchain is seemingly tailor-made for microfinance and microlending, which could change the way people access capital everywhere. Instead of green power providers competing for loans at prevailing market rates, blockchain could allow people to lend on favourable terms to companies they want to support.
FOUR Blockchain Enables Incentivized Circular Economies
When you buy a product that is sold in a plastic container, you aren’t paying a realistic amount of money. There are a number of reasons for this, but the massive tax breaks that oil companies receive are one of them.
There is little incentive to recycle most plastic products, which is why there is an enormous amount of plastic floating in the middle of the Pacific Ocean. Blockchain is already being used by IBM to incentivize the collection of the Pacific’s garbage patch, and there are many other areas that could be helped by the same technology.