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• Flowcarbon sells CO2 tokens on the blockchain
• The young start-up has already landed large investors
• Critics, however, express doubts about the meaning of the idea
The cryptocurrency against climate change
The idea behind the startup Flowcarbon, founded by Adam Neumann, is to bring the already widespread trade in CO2 certificates to the blockchain. He wants to offer companies interested in improving their CO2 footprint the opportunity to do something good for the climate by purchasing these crypto tokens. As t3n explains, these so-called carbon credits can be freely traded on the crypto exchange.
Investors Neumann has already secured for his project include Andreessen Horowitz and his crypto division a16z crypto, General Catalyst, Samsung Next, Invesco Private Capital, 166 2nd, Sam and Ashley Levinson, Kevin Turen, RSE Ventures and Allegory Lab 32. startup founder was in able to collect the amount of $ 70 million from this group. Dana Gibber, CEO of Flowcarbon, explains the motivation behind the young company according to t3n: “There are strong economic incentives to destroy and degrade critical natural landscapes around the world, but the voluntary carbon market is a brilliant financial mechanism that provides a balancing incentive for replanting, revitalization and protection of nature. ”
The credits must run via the Celo blockchain
According to the company, the credits are issued by Flowcarbon so-called ERC-20 tokens, which are usually found on the Ethereum blockchain. Again, this usually means that transactions of such tokens alone result in CO2 emissions, as the Ethereum network is still based on cryptocurrency mining today. According to t3n, however, the flowcarbon tokens will not be launched on Ethereum, but on the Celo blockchain. This is based on Ethereum Virtual Machine (EVM), which is capable of using the ERC-20 standard and according to the operators is a “carbon negative” blockchain.
The CO2 credit market has been plagued by a problem of opacity since its inception, which, according to Bloomberg, in many cases leads to the buying and selling of substandard credits, which actually has a very small positive effect on reducing carbon emissions. In recent times, there have already been attempts to create more transparency via a crypto model, but they have all failed.
The idea met with massive criticism
However, not everyone is convinced of Neumann’s concept. For example, the organization Friends of the Earth (FotE) describes carbon credits as a dangerous distraction that actually makes the problem worse. According to t3n, the FotE sees the compensation system as merely a “convenient excuse for governments, companies and individuals” that allows them to circumvent difficult decisions. According to the organization, the only viable option is to stop using fossil fuels immediately.
Flowcarbon also needs to listen to harsh criticism from academics. Robert Mendelsohn, professor of forest policy and economics at Yale, told Recode that the strength of blockchains to guarantee that assets will not be lost is not what matters most in the current market. Instead, he sees the biggest problem in the fact that the credits may not even fulfill their real purpose, namely to help reduce CO2 emissions. “I think they’re trying to solve something that’s not a problem,” Mendelsohn said.
Thomas Weschle / Editor finanzen.net
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