November 21, 2018 Valentin

Incentivising behaviour with purpose-driven tokens

Bitcoin and the token governance rules specified in the Bitcoin blockchain protocol have introduced a new form of value creation, where a network of actors agree on a specific goal (in the case of Bitcoin it is fault tolerant P2P money remittance without banks), and value is created when someone proves that they have contributed to a previously defined collective goal (in the case of Bitcoin this would be “proof of work” and the subsequent block reward, also called Bitcoin mining).

Bitcoin has inadvertently introduced a new form of collective value creation without traditional intermediaries, that provides an alternative to conventional economic system, that only incentivized individual value creation, allowing private actors to extract raw materials from nature, transforms these into products, and in the end, disposes these products in nature, externalizing costs to society, while internalizing (and maximizing) private profits. Cryptographic tokens issued by a smart contracts on the ethereum blockchain (or similar blockchains) can now be used to incentivize individuals and corporations to act in a sustainable manner. Such incentives can be a key to reaching a sustainable future and tokens can be used as a representation of the rewards collected.

Rewards can be fungible (tradeable for other cryptocurrencies) or non fungible (identity based reputation tokens). In some cases fungibility can be limited, representing a value that can only be exchanged for products and services within the community, therefore never leaving the internal system and being exchanged for fiat money, but being useful in the internal community. The “monetary policy” and other token governance rules can can be simply embedded thus regulated by a smart contract on the Ethereum or similar Blockchains to fulfil the goals of the community. Example of such purpose driven tokens:

Proof of CO2 emission reduction

by riding a bike, walking, public transportation instead of using a car.
Examples currently include Solar Coin, Electric Chain, Sun Exchange

Proof of energy consumption reduction

Blockchain-based rewards system incentivizing users with a with token every time they prove that they have used less energy by using energy efficient devices, turning the lights off, etc. Users basically earn money for reducing their carbon footprint.
Examples: Energi Mine, Electron

Proof of Tree Planted, Recylcing, etc.

Proof of undertaking actions to help natural resources like for example planting trees, cleaning a beach, reduction of food waste, recycling of goods
Examples: Plastic Bank, Earth Dollar, Bit Seeds, Eco Coin, Earth Token, Recycle To Coin

Proof of sustainable holidays

staying in environmental friendly hotels using blockchain based solutions to track sustainability of holiday service provider.

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