Using Blockchain to Tackle the Waste Crisis
Words by Holly Bodeker-Smith
These startups are using blockchain to keep plastic, clothes, furniture and more in use for longer. But with blockchain’s murky environmental track record, can we justify using it to better both people and the planet?
Blockchain has had its share of scrutiny, and rightly so. Those who use it for crypto and NFTs are vulnerable to volatility, theft and scams. Proof of work blockchains like Bitcoin and Etherum (though not for much longer) also use enormous amounts of energy. One Bitcoin transaction alone creates the same amount of waste as binning two iPhones.
“Etherum’s processes to verify transactions consume a similar amount of energy to the Republic of Ireland,” Dr Alexia Maddox, a research fellow at the Blockchain Innovation Hub at RMIT University, tells Matters Journal. “We can think of these large blockchains as equivalent to national consumption.”
Yet despite the environmental challenges of working with blockchain, many startups are using it to better both the planet and people. “[Many of] the communities building these blockchain spaces often bring a social conscience to their work,” says Dr Maddox.
Swap-studio is one startup using blockchain to positive environmental ends. The Netherlands-based online marketplace lets members swap their high-quality, pre-loved items – like clothes, accessories, furniture and homewares – with other people. Community members trade using a barter-like points system, called ‘kudos’. “You effectively buy and sell with those points,” says co-founder Dr Nilofer Christenen. “I could sell my shirt for five points and use those points to take something from someone that they no longer want.”
Christensen founded swap-studio during the pandemic, when many of us were forced to get creative with how we exchanged goods. “We started off building a community of people with shared sustainability values. Then we realised that while they were doing good, they didn't have any tangible way to see that good,” says Christensen. So they built a blockchain.
More specifically, they designed a database that measures the carbon and water saved from swapping a pre-loved item, rather than buying new. “We create a non-fungible token for the carbon and the water saved by every transaction on the platform,” says Christensen. “We wanted to create transparency and avoid greenwashing. Blockchain allows us to do all of that by providing a public ledger of the data, rather than going through a certification or governance body.”
Christensen was concerned about blockchain’s environmental cred (or lack thereof) from early on. “We decided to use a blockchain called Polygon, which has a very low environmental impact,” she says. “There are valid concerns in this space. But there's also arguments suggesting that the [benefits of] blockchain… can potentially outweigh the environmental impact of, for instance, mining coal to produce polyester”.
Indeed, the ongoing production and disposal of plastics is a huge burden on the planet. PlasticBank is a social enterprise using blockchain technology to ameliorate that burden and lift people out of poverty. “Our solution sets up ethically-sourced recycling ecosystems in developing countries,” says PlasticBank co-founder Shaun Frankson. How? The Canadian greentech company pays people living in coastal communities to collect ocean-bound plastic and hand it in for recycling. Members across Asia, Africa, South America and beyond can exchange that discarded plastic for digital tokens. These tokens can be used to purchase groceries, cooking fuel, phone charging, school tuition, health insurance and more. The plastic is then processed locally and recycled. According to PlasticBank, this model has prevented over two billion plastic bottles from entering the ocean.
For Frankson, blockchain provided a means to trace that discarded plastic’s journey and create accurate data. “For us, the big thing is to have that immutable truth, so that our partners know that nothing could have been hacked or edited and that those transaction records are solid,” he says. Frankson was also conscious of using a less energy-intensive blockchain. PlasticBank uses a ‘hybrid blockchain’ that requires as little energy as possible.
In each of these models, blockchain isn’t the entire business model so much as the backbone. They show that blockchain can be used to trace the location and impact of items, ultimately keeping goods in use for longer.
But, considering blockchain’s high energy consumption, can we justify using it to achieve positive environmental outcomes?
Dr Maddox believes we can. She says that the problem lies less with blockchain technology than with the energy sources we rely on. “We’re operating in a world that has not solved the energy problem. We're getting energy from mining and extraction of our natural, finite resources. Blockchain consumes so much energy and it's terrible. But how is that power generated? And why are we not on sustainable energy in the first place?”
As with any new technology, blockchain aims to solve just some of the problems we face. Dr Maddox believes experimentation is needed to see blockchain live out its most positive potential. “This technology programs different potentials into the world that we have. So we need to experiment and see what it makes possible. If we find desirable applications for it, we need to make sure the people developing these technologies opt for more sustainable solutions,” she says. “People who develop it need to be prompted and pushed by social and policy and regulatory approaches to opt for more sustainable solutions. But essentially, they're creating [this technology] in a world that's already operating in an unsustainable way.”