One day in January twelve years ago, protesters occupied Zukoti Park on Wall Street to protest economic inequality, and at the same time an anonymous developer deployed the original Bitcoin reference implementation.

There is such an encrypted message in the first 50 transactions. “The Times reported on January 3, 2009 that the Chancellor of the Exchequer is about to conduct a second round of bailouts to banks.”

For me and many people, this clearly demonstrates the intent of Bitcoin to provide an alternative to an unjust global financial system controlled by central banks and politicians.

The application of blockchain technology focusing on social impact is the core part of this field. As early as 2013, when I first explored the impact potential of blockchain technology in the supply chain, others began to use these decentralized networks to provide fair banking services to those who did not have banks. Track charitable donations and carbon credits.

So, what makes blockchain technology an effective tool to build a fairer and more sustainable world? Most importantly, does the ever-increasing carbon emissions of the blockchain make these benefits meaningless?

What makes blockchain a powerful tool with social impact?

Blockchain has the ability to drive positive impact in a wide range. Part of this power lies in the user’s participation in achieving the consistency of network value creation. Unlike centralized networks such as Facebook, Twitter or Uber, where only a few shareholders control the development of the network and benefit from it, the blockchain enables the incentive system to benefit the entire network.

When I first tried to use blockchain technology, I saw such a powerful incentive system that might be able to readjust capitalism. This is why I chose to try.

The power of a decentralized network lies in its transparency. Any transaction on the blockchain is verified by multiple parties, and no one can edit data without notifying the entire network.

Unlike the secret and constantly changing algorithms of large technology companies, blockchain contracts are public, as are the rules surrounding who can change them and how to change them. As a result, a tamper-proof and transparent system was born. As a result, the blockchain has won the reputation of the well-known “trust machine”.

Due to these characteristics, applications built on the blockchain may have a positive impact on society and the environment, whether in terms of wealth distribution or in terms of the coordination of finance and nature.

Blockchain can achieve the unification of basic income through a system similar to Circles, can promote local currency reform through a system similar to Colu, can promote an inclusive financial system through a system similar to Celo, and can also popularize tokens through a system similar to Cash App , And even promote the protection of environmental assets through systems like Seeds and Regen Network. (Editor’s note: Circles, Colu, Celo, Cash App, Seeds, and Regen are all blockchain projects)

I am passionate about the positive system change potential created by blockchain technology. In addition, we can also encourage circular economy and completely change the way charitable donations are distributed. For those applications that can change the world based on blockchain technology, we are still only on the surface.

However, Bitcoin and other similar public blockchains have a huge flaw. They consume a lot of energy and are still growing.

Blockchain consumes energy by design, but there is another way

The way of guaranteeing and trusting transactions on the blockchain is highly energy intensive. In fact, blockchain currently accounts for 0.58% of global electricity consumption, and Bitcoin mining alone consumes almost the same electricity consumption as the entire US federal government.

This means that when discussing sustainable development and blockchain technology today, you must strike a balance between long-term system benefits and the current urgent need to reduce fossil fuel consumption.

Fortunately, there are more environmentally friendly ways to power the public chain. One of the most promising solutions is “Proof of Stake in PoS”. Proof of Stake in PoS is a consensus mechanism that abolishes the energy-intensive mining process required by “Proof of Work (PoW)” and instead relies on network participation. People bet their financial assets on their future trustworthiness.

As the world’s second largest crypto asset community, the Ethereum community has invested nearly 9 billion U.S. dollars in proof of stake in PoS and implemented this consensus mechanism as early as October. A Bloomberg report this week suggested that this shift could reduce Ethereum’s energy consumption by more than 99%.

There is also a conscious driving force in the crypto community to solve the problem of energy consumption. In other words, blockchain technology is accelerating the adoption of more environmentally friendly energy sources.

Last month, institutions such as Ripple, the World Economic Forum, Consensys, Coin Shares, and the Energy Network Foundation launched a new “Cryptographic Climate Agreement (CCA)”, which states that by 2025, all blockchains in the world will Use 100% renewable energy.

Today, the carbon cost of blockchain limits its overall value-added. However, if proof of stake in PoS proves to be as beneficial as proof of PoW workload, it will open a climate-friendly tool that can incentivize sustainable development and increase trust in scale. This potential is huge.

Build a fairer and more transparent future on the blockchain

Today, we cannot ignore the growing carbon emissions of the blockchain. However, as the amount and type of energy used by blockchain technology have undergone tremendous changes, we will soon be able to create a tool to stimulate social and environmental progress on a large scale.

As with any new technology, the path of blockchain from concept to actual solution for enterprises is not a straight line. You may have witnessed or supervised projects that failed to deliver. I also understand that there may be doubts.

But with incredible applications appearing every day, as well as serious thinking and investment in reducing the energy consumption of the blockchain, we should not erase the value that blockchain technology may bring. Blockchain technology has great opportunities for business and our planet, especially in terms of increasing trust through public transparency.

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