The fight against climate change is a complex one, and it will require unprecedented collaboration between businesses, governments and nations. Fortunately, trust and transparency is where blockchain technology excels.
We know that insurers are embracing blockchain ledgers. And we know that they’re fighting climate change. At first glance, these can seem like two entirely separate endeavors, but they may prove to be closely intertwined.
When it emerged, blockchain was virtually synonymous with wasteful carbon emissions: Bitcoin mining relies on a proof-of-work model that requires massive server farms to generate new currency; by some accounts, a single bitcoin has the same carbon footprint as 330,000 credit card transactions.
But most blockchains, including those used in insurance, operate on a proof-of-stake model, “where the emissions are 99.9% lower,” said Sid Jha, founder and CEO of Insurtech and climate risk solutions platform Arbol. “It’s a shared database that allows you to trace changes made to it, and it’s nothing more than that. It’s just another tool in our toolbox to bring efficiencies.”
