Crypto and philanthropy have always gone hand in hand. It is unlikely that cryptocurrency and Blockchain platforms have significantly disrupted or displaced traditional philanthropy, but it drove further innovation and experimentation in the sector.
Over the years, institutions like The United Nations International Children’s Emergency Fund (UNICEF) and Red Cross have started to accept cryptocurrencies as a means of donation.
There are also multiple charitable organizations within the crypto industry as well; one fine example would be Binance Charity, the philanthropical section of the largest cryptocurrency exchange by volume.
But many believe that blockchain could be much more than just a tool to donate wealth.
In a similar move to give back to the community, entrepreneur and founder of Tron (TRX) Justin Sun had pledged to donate $1 million to the viral Swedish activist Great Thunberg. On December 18, following the COP25 UN Climate Conference in Madrid, Sun took to twitter and said:
“As a young entrepreneur, I share @GretaThunberg’s passion to change the world. Crypto will contribute immensely on reducing carbon footprint by implementing decentralized settlement. I would like to personally commit USD$1 Mil to @GretaThunberg’s initiative. #cop25”
While many were confused as to how cryptocurrency and blockchain technology could help reduce carbon footprints, Sun clarified his decision to crypto media outlet Cointelegraph, stating:
“Decentralized settlement and decentralized finance are completely run by computers on cloud computing systems, thus eliminating the need for ledger documentation and management records kept on paper.”
He further added that:
“These types of records require postal mailing which is done through transportation. The whole Know Your Customer process also requires face-to-face interaction, which sometimes makes it necessary for people to travel. All of this will not be compulsory when decentralized finance is utilized.”
Sun isn’t the first with ideals like these. Nations all across the world are exploiting cryptocurrencies and blockchain technology to reduce the use of paper.
Previously, The UAE government had launched the Emirates Blockchain strategy 2021 back in April 2018, to generate a savings of $3 billion in transactions and documents processing costs as well as eliminating 398 million hard copies and 77 million work hours.
Sun also noted the benefits of using a Proof-of-stake (PoS) based system over the Proof-of-Work (PoW) system that consumes a lot of power.
Cryptocurrency mining is a heavy process and studies have revealed that just Bitcoin mining itself emits over 22 megatons of carbon dioxide annually.
An earlier report revealed that the crypto mining farms in Georgia have such a huge load that it is “sucking the power grid dry.” In fact, these mining enterprises consume 10% of the entire country’s electricity consumption.
The PoS system is more energy-efficient because it removes the high-powered computing from the consensus algorithm. On this matter, Sun said:
“By adopting a [PoS] system, it drastically reduces the massive energy consumption used in traditional [PoW] mining method used by Bitcoin.”
Blockchain technology is also being used to allow peer-to-peer energy transactions that significantly disrupt the energy sector, particularly by encouraging decentralization. The technology could also be used to track electricity in real-time and avoid double counting.
Apart from all the eco-friendly benefits, Sun also pointed out that a decentralized financial system would also be beneficial as it is readily available throughout the globe. Multiple institutions are using this emerging technology to make banking cheaper and more secure while banking the unbanked. Sun concluded his statement saying:
“Decentralized finance systems are available to everyone in the world! Bank the unbanked. Today, the traditional finance system is limited, expensive and not cost-effective. Enormous resources and steps are required just to open an account. Imagine having to serve a heavily populated country and all the wastage that ensues. I truly believe blockchain must be in our future if we want to eliminate wastage and make a difference.”