UN experts argue that cryptocurrencies and the technology that powers them can play an important role in sustainable development through improved environmental management. The negative environmental impact of cryptocurrencies such as bitcoin has often been in the international news. The UN’s stance on the subject stands in stark contrast to the negative perception that some of the international public has formed.
The UN, which is at the forefront of the fight against global warming, believes that blockchain could be of great use to those fighting the climate crisis and contribute to a more sustainable global economy.
Bitcoins are not physical objects, but rather new coins mined or put into circulation, through a process that involves using powerful computers to solve complex mathematical problems. “This process requires so much energy that the bitcoin network would consume more energy than several countries, including Kazakhstan and the Netherlands,” the UN reports.
At the same time, experts from the international organization argue that cryptocurrencies and blockchain can play an important role in sustainable development by improving environmental management. These argue that one of the most useful aspects of cryptocurrencies is transparency. The technology is said to be resistant to forgery and fraud. This allows for the possibility of reliable and transparent recording of transactions.
The UN and other organizations have been working to explore the potential of blockchain in environmental protection by experimenting with the technology in several projects related to, among other things, eliminating illegal fishing in the tuna industry, developed for the World Wildlife Fund (WWF). The CarbonX platform has been developed. It transforms greenhouse gas emission reductions into a cryptocurrency.
This can be bought and sold, providing manufacturers and consumers with a financial incentive to make more sustainable and planet-friendly choices. From the partnership between UNEP, the Technical University of Denmark, and the Danish Ministry of Foreign Affairs, there are three main areas where blockchain can accelerate climate action, namely transparency, climate finance, and clean energy markets. Stakeholders in the aforementioned partnership note that data on harmful greenhouse gas emissions in many countries is incomplete and unreliable.