Blockchain has emerged as a promising technology that can actively contribute to improving the sustainability of urban areas. Earth.Org takes a closer look at some of the ways blockchain can play a viable role in the development of smart cities and how it can help build a more sustainable urban future .
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Today, the world’s rapidly growing and expanding cities face major challenges such as pollution, resource depletion, and ineffective waste management. The United Nations estimates that by 2050, almost 68% of the world’s population will live in urban areas. In response to this, new ideas are emerging such as smart cities, a new ecosystem that brings an improvement in the lifestyle of city dwellers with the help of technology.
One promising technology that has the potential to significantly improve the environmental sustainability of smart cities is blockchain technology. By providing transparency, efficiency, and decentralized governance, blockchain can help rebuild urban ecosystems in a more resilient and sustainable way.
Exploring blockchain beyond cryptocurrencies
At its most basic, blockchain is a distributed ledger technology that securely records transactions across many computers. Unlike traditional databases, blockchains are immutable. Once information is recorded, it cannot be changed retroactively without changing all subsequent blocks (information) and obtaining network agreement. This special attribute ensures transparency, security, and trust between participants.
Blockchain initially gained fame in the world of cryptocurrencies such as Bitcoin, but its applications extend beyond financial systems. The full power of blockchain is gradually being harnessed in areas such as supply chain management, healthcare, and energy.
According to Custom Market Insights (CMI), the size of the blockchain technology market is estimated at USD 4.8 billion in 2021 and is expected to reach approximately USD 69 billion by 2030, with significant investments being made in various industries. There is an influx.
When it comes to smart cities, this technology has the potential to perform resource management, enhance service delivery, and promote sustainability.
Topic details: Use of blockchain technology in environmental conservation
Blockchain for environmental sustainability: Can blockchain help build smart and sustainable cities?
A smart city is one that leverages advanced technology to improve the quality of life for its citizens, increase operational efficiency, and reduce environmental impact. In this transformation process, blockchain can play a key role in driving change through a variety of applications.
1. Waste reduction and recycling
Blockchain, which tracks waste from source to disposal, can help cities increase recycling rates and reduce the burden on landfills. If a reward system is issued to residents for proper recycling, they are incentivized and thereby encourage sustainable behavior.
2. Supply chain transparency
Blockchain can be used to increase transparency in food and commodity supply chains. Consumers can track the path a product has taken to achieve sustainability with traceability purposes, ensuring that their purchasing decisions are more environmentally friendly.
3. Effective resource management
Blockchain enables the development of decentralized energy grids where consumers can sell, trade, or buy surplus energy provided by renewable means such as solar panels. This approach accelerates the deployment of renewable energy and reduces transmission losses. A report from Ernst & Young Global shows that distributed energy resources (DERs) (regional decentralized energy generation and conservation models) and smart grids can help secure energy supplies and bring the world to net zero by 2050. He suggests that this is the key to doing so.
Blockchain technology also makes it possible to monitor water usage in real-time using smart meters, improving water conservation, reducing waste, and efficiently rationing water in case of scarcity. Masu.
Blockchain applications for smart cities
The International Institute for Management Development (IMD) has developed a metric called the Smart City Index (SCI) that aggregates data from various social and environmental sectors to measure a city’s level of smartness.
The graph below represents the SCI rankings for Dubai, Helsinki and Los Angeles from 2020 to 2024. Although the rankings of cities vary widely, with the Finnish capital leading the way and California cities lagging behind, all three have adopted and promoted various blockchain initiatives. sustainability.
Below we will take a closer look at each program.
dubai, united arab emirates
As part of Dubai Municipality’s digital transformation initiative, Dubai aims to become the first city in the world to leverage blockchain through the Dubai Blockchain Strategy. The government has been leading this strategy since 2016, thanks to a partnership with the Smart Dubai Office and Dubai Future Foundation. Aimed to disrupt the way government services are delivered, the strategy aims to integrate blockchain into most sectors in the city.
One of the key use cases for this strategy is the blockchain-based electric vehicle (EV) green charger system launched in 2020 by Dubai Electricity and Water Authority (DEWA). It combines the goals of the Dubai Blockchain Strategy and the Dubai Green Mobility Strategy. , this initiative will reduce carbon emissions while strengthening the city’s sustainability efforts. By leveraging blockchain technology to facilitate secure transactions and share real-time data between electric vehicle users and charging stations, we will mass deploy a unified and secure network of electric vehicles in the city. Masu.
Dubai is the most populous city in the United Arab Emirates (UAE).
Highlighting the cost-optimization of the city’s blockchain strategy, government efficiency estimates show that enabling paperless transactions could save the government at least $1.5 billion annually in document processing costs. This suggests that this is equivalent to the construction cost of one Burj Khalifa.
The strategy aims to position Dubai as one of the world’s smartest cities and open new economic opportunities for entrepreneurs, start-ups and businesses.
helsinki, finland
The city of Helsinki is also entering the race to adopt blockchain technology and use it to modernize its waste management system. In 2022, the City of Helsinki announced cooperation and exploration of blockchain-based platforms to solve circular economy challenges regarding supply chain traceability and transparency as part of the fight against climate change. This will strengthen the responsibility of companies and individuals involved in waste treatment and recycling processes. Real-time monitoring of waste treatment and recycling efforts is expected to facilitate the integration of public participation.
In addition to Helsinki’s local efforts, there is the Transnational Dimensions of Disruptive Information Technology (CroBoDDIT) project. The project, a collaboration between Helsinki and St. Petersburg, aims to modernize solid waste management using digital solutions such as IoT, big data and blockchain. With a budget of approximately USD 868,000 for the period 2020-2022, the initiative actively contributed to cross-border cooperation on climate and environmental development and successfully achieved the relevant goals set by the European Union. It is said that
Los Angeles, USA
The city of Los Angeles also plans to leverage blockchain technology to pursue sustainability in the city. In 2020, the state announced that it had participated in a blockchain-enabled renewable energy project and won a state grant worth US$9 million out of a total of US$20 million raised. New elements that make up the project include a smart community solar power and storage system, a campus microgrid resilience hub that provides clean backup power, and an aggregated virtual power plant that combines solar energy and battery storage in 50 single-family homes. Contains. The goal was to provide locally produced renewable energy solutions within disadvantaged communities in the region.
This effort is part of the city’s 2015 Sustainable Cities Plan to increase energy efficiency in Los Angeles, prevent power outages, strengthen the power grid, and reduce greenhouse gas emissions. The city is working to expand blockchain projects to different areas of Los Angeles alongside other sustainable projects as part of its ambitious carbon neutrality goal for 2050.
potential problems
Despite the potential, there are several challenges to implementing blockchain in smart cities.
First, there’s the issue of scalability. By their design, blockchain networks are slow and power-hungry, which negatively impacts the efficiency of large-scale urban applications. To overcome this challenge, several solutions have been developed, including new approaches such as layer 2 protocols, sharding, and hybrid blockchain models that enable faster transactions with less energy consumption. Scalable solutions for such technology have recently been considered in Dubai’s active promotion of smart city projects.
Scalability isn’t the only thing that makes things easier. Another challenge is regulatory. Most countries do not have a standardized legal framework for blockchain, making it difficult to ensure compliance. However, in countries like Estonia, the government has clearly established a legal framework that has allowed blockchain to be implemented in some public services, particularly in the area of cybersecurity.
Public awareness and trust in blockchain technology is another factor to consider. For example, a survey conducted by the UK government in 2024 found that approximately 81.4% of the adult population had never heard of blockchain.
Whether people don’t know about blockchain’s capabilities or simply don’t believe in it, without public support, this technology will never become as widespread as the internet.
This problem could be overcome through education and awareness campaigns, as well as better blockchain-based services, making the technology more practical and more accessible.
The future of blockchain cities
The future of blockchain-powered cities promises advances in transparency, efficiency, and sustainability. Cities around the world are still finding ways to overcome environmental challenges, and blockchain offers them a powerful solution by facilitating data management and improving the efficiency of resource utilization. Moreover, blockchain, which is decentralized in nature, develops all aspects of accountability and trust in public services, making them more sustainable. According to a 2020 study by PwC, blockchain could increase global GDP by USD 1.76 trillion by 2030. Sectors most affected by this include energy and logistics.
As cities continue to innovate, blockchain integration is a major step toward making them smarter, more efficient, and truly green.
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