Blockchain and sustainability-more than just electricity

In more than 40,000 days-or more than a hundred years-we have gone from the first ground flight to the first flight on another planet. In that short period of time, a lot of fuel was burned, and unfortunately, even life was lost. In exchange, flying completely changed everything from commerce to war, and gave birth to a whole new industry. With the advancement of the aviation industry, fuel efficiency has improved and mortality rates have also fallen sharply.

In the digital field, blockchain technology is also transformative and can be applied to all aspects of trade, exchange, cooperation, identity and resource use management. Currently, these advances are at the cost of high power consumption. This is a problem that should and will be solved.

related: Ignore the headlines-Bitcoin mining is already greener than you think

The problem is that the current narrative uses this high power consumption to invoke blockchain projects, especially Bitcoin (Bitcoin),Unsustainable. This is not only bad for blockchain projects—especially from an investment and adoption point of view—but it is also untrue.

Sustainability is judged based on the three broad indicators of ESG-environment, society and governance. The current debate-lack of nuance on the one hand, and unnecessary accusations on the other-focuses only on the environmental aspects of sustainability. The social and governance aspects are widely ignored, which leads to inaccurate perceptions of the overall sustainability of Bitcoin and blockchain projects.

related: Bitcoin miners can prove green potential by conducting ESG rating checks

Social

The social aspect should be viewed in the broader context of the transition of the entire economy to a platform. From calling a car to buying a book to ordering takeaway, everything is done on the platform. In this winner-takes-all world, the market power of successful platforms allows them to ultimately impose unfair terms on their employees.

Tokenized blockchain projects may solve this problem through platform ownership based on worker contributions. The result is that workers benefit from the growth of the platform, rather than being oppressed by it.

related: Understand the systematic transformation of financial services from digitization to tokenization

Governance

Blockchain technology can transparently and automatically execute rules/procedures on a global scale. This capability is based on the unique combination of immutability, transparency, censorship resistance, decentralized software execution, and economic incentives unique to the blockchain.

This makes the blockchain a rich proving ground for governance in the digital age-as we have seen in the field of decentralized finance, this proving ground is making interesting progress almost every day. The lessons learned can help us better manage the global commons. It is only a matter of time.

related: Decentralized parties: the future of on-chain governance

in conclusion

The Apollo 11 astronauts brought a piece of fabric and wood from the original Wright vehicle to the surface of the moon. Except for the symbolic linking of these two historical events, fabric and wood have no functional purpose.

Approximately 4,600 days have passed since the Bitcoin white paper was published. With the rapid development of innovation in the blockchain field, the current blockchain and its energy consumption will also become a sign of the past.

Therefore, it will be more effective to take a more comprehensive view and turn to a sustainable end result, rather than over-judging the work in progress-and losing the possible social and governance gains, making the blockchain vulnerable to cheating and scams in the process. Make huge profits.

The views, thoughts, and opinions expressed here are only those of the author, and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Gis Hoff He is the managing partner of Coinstone Capital, a Dutch digital asset investment consultant, focusing on customizing a portfolio of encrypted assets for retailers, wealthy individuals and family offices. Gys writes and lectures on blockchain and society, with a special focus on tokenization, inclusive platforms and CBDC.