The Promise and Peril of Blockchain and the Environment

The Promise and Peril of Blockchain and the Environment

The current headlines around blockchain technology usually involve a joke dog cryptocurrency (Dogecoin) or a pop-tart cat worth almost $600,000 (the first Non Fungible Token or NFT), and the massive environmental toll they are taking. It has been reported that Bitcoin uses as much energy in a year as all of Sweden or Argentina. But beyond cryptocurrencies and digital tokens, blockchain is already being piloted to solve some of the largest ethical and environmental issues in production and may hold the key to the future of fiber recycling.  

Cryptocurrencies and the Environment

Blockchain is a decentralized ledger of transactions that is said to be totally secure from tampering. The technology was created in 2008 to track ownership of Bitcoin, the first cryptocurrency. Most of the massive energy use associated with cryptocurrencies come from mining, solving puzzles to create and maintain the currencies. As cryptocurrencies and NFTs have gained popularity, many have pledged to find ways to cut down the energy use they need to continue existing. NFT marketplaces have promised to buy carbon offsets and crypto proponents say they hope to shift to renewable energy sources like solar and wind for mining. But there is a lot of skepticism that even if energy sources are shifted it will make up for the continuing massive energy drain.

The Promise of Blockchain for Ethical and Sustainable Production 

Supply chain transparency is one of the biggest problems in production. The horrific tragedy at Rana Plaza revealed just how little major brands knew about which factories were creating their clothing. Large brands claimed that they had contracted other factories for production who then outsourced the work to Rana Plaza.

In January, the US banned cotton imports from Xinjiang because of links to Uyghur forced labor camps. Major brands like Patagonia and Gap admitted it was hard to trace their entire supply chains in Xinjiang. Clearly, even companies that invest a lot of time and energy into mapping and auditing their supply chain can't truly track down exactly where their raw materials and labor are coming from.

To try and create a more transparent and resilient supply chain, companies like IBM and Walmart are already working with blockchain. Because every step can be tracked, can’t be edited and is easily accessible, they hope that it will finally solve the existing gaps in traceability. Blockchain also promises to streamline logistics potentially cutting down on emissions.  

Blockchain and the Circular Economy

Blockchain technology also has potential to solve one of fashion's biggest end of life challenges. The exact fiber content has to be known in order to properly recycle fabrics. If a fabric has been blended and is no longer 100% cotton or polyester, it can't be respun. Fabrics with any stretch or spandex in them can melt and ruin the machines recycling them. If a blockchain had every step in a garment's production documented, it would make verifying and properly sorting textiles a lot easier and potentially keep used clothing out of landfill. It also has implications for better pricing in resale, identifying counterfeits and tracking the sources of clothing waste back to the brand. 

There is still a long way to go in creating an economy that is accountable and traceable at every level, but the promise of blockchain may finally create a clear picture of every step in a product’s lifecycle. 

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