Pratik Gauri is a serial Indian social entrepreneur, investor, public speaker and writer widely known as the Creator of the 5th Industrial Revolution. He has been championing the UN Sustainable Development Goals and helping transition the world from a for-profit economy to a for-benefit economy for more than a decade. As the Founder & CEO of 5ire.org (pronounced FIRE), Pratik is responsible for the day to day operations of the firm and its strategic efforts. As a young visionary leader, Pratik believes that the service of humanity and social good can work hand-in-hand with business and is on a mission to prove the thesis of 5IR (5th Industrial Revolution) – “You can make more money if you do good to the world.” Pratik has founded 8 companies prior to founding 5ire, which is a blockchain ecosystem that brings forward Sustainability, Technology & Innovation to build the 5th industrial revolution.
According to Statista Research Department, global spending on blockchain solutions accelerated from 4.5 billion to 6.6 billion in 2021. By 2024, Blockchain spending is expected to increase to around $19 billion, with more businesses leveraging the technology across data validation, data access, and identity protection strategies.
When Satoshi Nakamoto shared Bitcoin’s whitepaper, no one would have thought in their dreams that the novel concept of paperless money would unlock a new wave of growth and innovation. The use of blockchain technology worked as a powerful catalyst supporting the entire decentralized ecosystem.
Blockchain is a decentralized, immutable database that makes it easier to track assets and record transactions among a network of businesses. It offers immediate, shareable, and entirely transparent data that is kept on an immutable ledger and accessible only by members of the permission network, making it the perfect method for distributing that information.
Environmental, Social, and Governance (ESG) responsibility has emerged as a crucial business need in recent years, and it is now apparent that it is here to stay. As was evident at the World Economic Forum (WEF) in Davos this year, where sustainability was at the forefront of the agenda with topics like “How to save the world” and “Better business,” it is now being discussed at the highest levels.
Although many of us associate blockchain with cryptocurrencies, it has many more varied applications than that. It has evolved as an odd but promising ESG solution in the form of a networked, digital, decentralized public ledger. According to a report by the United Nations Environment Programme (UNEP), blockchain’s distributed ledger technology can significantly advance by enabling investors, renewable energy project developers, and buyers to cooperate on a common platform with established international standards for compliance due diligence.
However, a study from the University of Cambridge in February revealed that bitcoin consumes more electricity than Argentina. “Mining” for cryptocurrency is power-hungry, involving heavy computer calculations to verify transactions. Cambridge researchers say it consumes around 121.36 terawatt-hours (TWh) a year – and is unlikely to fall unless the value of the currency slumps. Just to power, a single BTC transaction takes over 2,264 Kilowatt-hours (kWh) of electricity – enough to boil 1,500 kettles. But it’s not just bitcoin that has this problem. Other cryptocurrencies utilizing the same proof of work (PoW) consensus mechanism face the same issue.
Increasing awareness of crypto’s energy consumption, pressure from highly influential people like Elon Musk (who halted bitcoin payments at Tesla due to the crypto’s environmental impact), and crackdowns in major countries like China are pushing the crypto industry to adapt.
In reaction to these occurrences, new and established blockchain projects are looking into anything from switching to less power-intensive validation systems to investigating mining using renewable energy sources. One of the most notable projects that are switching from a proof-of-work (PoW) system to a proof-of-stake (PoS) system is Ethereum, which aims to use 99.95% less energy overall.
Subsequently, Sustainable Proof-of-stake can also become the answer to the dilemma. SPoS is a new consensus algorithm incorporating a new weighing mechanism that adds to the overall proof of stake (PoS) weight. By decentralizing and digitizing the adjudication of what is trustworthy, blockchain also can empower broader communities of stakeholders and improve the slow, costly intermediation associated with our current models of environmental governance.
Further, sustainable proof of stake blockchains use-case solutions that are particularly relevant across environmental applications tend to cluster around the following cross-cutting themes: enabling the transition to cleaner and more efficient decentralized systems; peer-to-peer trading of resources or permits; supply-chain transparency and management; new financing models for environmental outcomes; and the realization of non-financial value and natural capital. By integrating sustainability and social impact at the consensus mechanism level, this technology gives economic rewards to organizations that support sustainable practices and empowers these organizations.
With exponential growth in digital finance, the future holds great potential for sustainable decentralized distributed ledgers that can integrate digital finance with sustainable mechanisms to cultivate sustainable business models.