Streamlining sustainability with decentralized data | Opinion

by

As a researcher with a background in computer science and a keen interest in sustainable practices, I am thrilled to see the transformative potential of blockchain technology in reshaping supply chains for the better. The integration of this technology into the operations of industry giants like Ford, Walmart, Amazon, and UPS is truly heartening, but it’s equally important that smaller businesses are not left behind.

Through blockchain technology, businesses now enjoy unparalleled transparency regarding the eco-friendliness and efficiency of their supply chains. This transparency encourages them to adopt greener practices, thereby improving overall sustainability. Notably, major industry players are actively leveraging this technology for optimal results.

Example: Since Q2 2024, Ford has obtained ten patents related to blockchain technology and has filed for numerous additional ones as it progresses in devising strategies to leverage decentralized technologies. These efforts aim to reduce waste, maximize energy efficiency, and uphold ethical standards throughout its operations. Similarly, companies like Walmart, Amazon, and UPS are working towards enhancing traceability, monitoring carbon footprints, and promoting recycling within their supply chains.

An uncommon illustration involves the concept known as the Internet of Forests, or IoF for short. This is a project that implemented a network of distributed sensors in a decentralized manner, primarily used to observe, record, and safeguard the rich biodiversity found within tropical rainforests.

Despite the encouraging rate at which larger companies are adopting this technology, many smaller businesses struggle to utilize it due to its perceived complexity. The cost of investing in this technology can be substantial for those who are new to it. However, once that initial barrier is surmounted, the benefits include substantial savings in time and resources on the path to becoming carbon neutral.

As a forward-thinking crypto investor, I’ve discovered that integrating blockchain solutions for long-term sustainability can slash operational costs by an impressive 60%, all without the hassle and guesswork often associated with less precise data management. What’s more, a staggering 90% of businesses are gearing up to embrace blockchain technology in the immediate future. This makes it not just a smart move, but an essential integration for companies aiming to stay competitive in today’s fast-paced digital landscape.

Incentivising sustainable supply chains

Utilizing blockchain technology provides us with highly accurate environmental data, streamlining the process of optimizing the effectiveness of eco-friendly projects. This is particularly beneficial in the context of supply chains, where blockchain encourages all suppliers and collaborators to meet specified sustainability objectives by offering incentives.

Smart contracts can link up with Internet of Things (IoT) gadgets and sensors to gather real-time data about a company’s sustainability achievements. Once put into action, these contracts serve as a tool for businesses to check adherence to regulations at every stage in their supply chain, using established benchmarks such as carbon emissions reduction, waste minimization, and renewable energy utilization, in accordance with their overall objectives. If suppliers reach these goals, they may automatically receive incentives like monetary bonuses, increased order quantities, and even the chance to participate in unique collaborations and markets.

Using blockchain technology, these incentives foster widespread sustainable practices, leading to swift advancements throughout supply chains. This allows businesses to make significant, economical reductions in their environmental footprint in a much shorter timeframe compared to traditional methods.

Transparent and tamper-proof

Sharing detailed environmental impact reports with consumers and investors, made possible by the clarity and openness of blockchain technology, enables companies to implement successful carbon neutrality plans even before the deadlines set by the Paris Agreement are reached.

Achieving transparency in business operations allows companies to validate their sustainability commitments to shareholders and collaborators using solid, unalterable proof. This authenticity is enticing to the 66% of consumers who prioritize sustainability when making purchases, potentially drawing in new customers.

Blockchain technology opens up possibilities for businesses to engage in eco-friendly business practices such as trading carbon credits. By tokenizing carbon credits on the blockchain, market liquidity improves, making trading more accessible and convenient across different countries and legal systems. Furthermore, decentralized carbon trading minimizes the chances of manipulation or fraud, fostering trust among traders. Smart contracts can then streamline trades automatically, removing intermediaries and speeding up transactions.

Once fully deployed, this technology requires minimal intervention, allowing businesses to progressively move toward carbon neutrality without significantly disrupting their regular activities.

Solving the proof-of-work problem 

Ultimately, before opting for a blockchain to assist with sustainability, businesses should verify initially that the energy usage of the technology does not counteract their environmental initiatives.

More recent blockchain systems are making efforts to combat high energy usage by shifting away from the power-hungry proof-of-work validation method, and instead adopting the eco-friendly proof-of-stake approach, which is favored by many prominent networks.

Beyond modifying consensus mechanisms within Proof-of-Stake (POS) networks, aspects like the type of energy sources utilized for power generation and the possibility of novel energy-intensive operations arising can significantly influence the network’s environmental sustainability as well.

It’s crucial to conduct comprehensive studies on the energy usage and future sustainability plans of blockchain networks, as they should align with a business’s goals and strategies. When selecting a platform, it’s important to prioritize those that rely on renewable energy sources and keep tabs on new blockchain advancements that could potentially improve energy efficiency even further. Artificial Intelligence (AI) tools can be beneficial in optimizing energy consumption within blockchain networks by streamlining smart energy management for peer-to-peer energy trading systems, for example.

It’s hard work, but it’s worth it

Achieving these decisions efficiently might necessitate seasoned teams and specific expertise – either by developing current personnel or recruiting new professionals to aid in the transition of the business towards blockchain technology. This process may not be straightforward, but if executed correctly, it will prove to be a shrewd move given the approaching deadlines for adhering to international regulations concerning carbon neutrality.

By embracing decentralized sustainability practices, companies can foster trust and a positive image in their operations and supply chains, while also motivating their partners to enhance their own sustainable efforts through financial and operational rewards. On a global scale, blockchain technology could standardize sustainable initiatives entirely, and visionary businesses will play a significant role in defining this future landscape.

Kostas Chalkias

Kostas Chalkias, who is both the head of cryptography and a co-founder at Mysten Labs, drives innovation, research, and development of novel product features in the field of cryptography. Before joining Mysten Labs, Kostas was the lead cryptographer for various significant tech companies like Meta and R3. Notably, he is also the founder of the largest Big Data Meetup group based in Athens, Greece, with a thriving community of more than 2,000 members. His achievements include receiving three Best Paper awards, filing eight US patents, ranking first in Master’s studies in Computer Science, being granted one of the most esteemed national scholarship programs for four consecutive years, and placing among the top three finalists in National IT Innovation Contests twice.

Read More

2024-11-10 15:04