Few would argue that the climate crisis is one of the greatest urgencies humanity faces today. The looming threat of global warming destroying our planet has led many to criticise cryptocurrency technology, thanks in large part to Bitcoin’s reliance on an energy-intensive Proof-of-Work consensus mechanism.
Tokenization as a force for good
I can see why Bitcoin gets a bad rap. But I think it’s worth pointing out that most other major networks run the more sustainable Proof-of-Stake consensus mechanism. Ethereum memorably completed “the Merge” from Proof-of-Work to Proof-of-Stake in September 2022. The upgrade cut its energy consumption by 99.95% overnight.
Cryptocurrency critics would do well to look into how Proof-of-Stake networks are ushering in the Internet money revolution without costing the earth. But there are many other reasons to believe that tokenization could be a force for good when it comes to the climate.
How tokens could support environmental causes
Tokenization enables ways for humans to coordinate like never before. By offering token incentives, blockchain-based projects can bring about change that impacts society of the better.
Let’s say you’re passionate about saving the planet. You could form a DAO whose goal is to raise funds to plant trees or other important environmental causes. This would incentivise other environmentalists to join with tokens. Blockchain also allows projects to launch tokens that can represent carbon credits. This could completely revolutionise people’s spending habits.
The environmental crisis affects every human on earth. Many of the world’s biggest companies have pledged to contribute to causes that preserve the environment, and blockchain could encourage them and others to contribute to environmental causes more than ever before. Imagine a company that wants to show its support for the Amazonian rainforest. What if they could buy an NFT and hold it in their public wallet to show that they donated $100,000 to prevent deforestation? This could be powerful in helping people signal their support for environmental causes. As blockchain is transparent, this could soon be a reality.
“Tokenization could be an impactful innovation in combatting climate change.”
The Climate-Conscious Crypto Collection
At token.com, we’re passionate about the world-changing benefits of cryptocurrency and blockchain technology. Tokenization is more than a powerful tool to enable financial freedom. It could prove to be the most impactful innovation in combatting climate change of the 21st Century. Though it’s still early days, we can already see signs of crypto projects who operate with a focus on sustainability, which is why we curated a Collection of the best Climate-Conscious Crypto ventures in the token.com app.
Don’t get me wrong, we’re still early in this journey and there’s a lot of work to do. But next time someone calls out crypto for Bitcoin’s environmental issue, make sure to educate them on how tokenization as a whole could help the climate.
Mel Gelderman, CEO of token.com
Please note: Investing in cryptoassets is risky. Due to the volatile nature of the cryptocurrency market, investors run the risk of losing their funds when they make an investment. Returns from cryptoasset investing are not guaranteed, therefore users should always be aware of the risks.