Carbon Offsetting On-Chain
Offsetting carbon is a great use case for blockchain and we foresee crypto users, exchanges, and wallet providers embracing this as the existing methods for offsetting carbon lack transparency and ease of use. Blockchain was designed to solve these kinds of verification problems. The basic idea behind blockchain is that it's a distributed ledger of transactions that everyone has access to, but no one can change without agreeing on a consensus. This consensus is achieved by having multiple parties validate the transactions and add them to the chain.
For a carbon transaction to happen, both the seller and buyer require trust. If either party tries to cheat or lie about their intentions, they will immediately be caught by everyone else who also has access to the same ledger of transactions. This ensures that both parties are honest and eliminates fraud. With traditional offsets there is no transparency; they're not tracked on public ledgers. So, you can't trace where your money goes when you opt to offset your emissions. You can't even be sure that impact projects are real or achievable - there's no proof of impact.
As a result, consumers and buyers lack confidence in these mechanisms and many people don’t engage at all. They see no benefit and it seems too complex. End-users aren’t part of the solution, they're just being asked to pay upfront with no visibility into how or where their money goes afterwards. Currently, most carbon markets function inefficiently because sellers charge exorbitant fees. These fees are a result of middlemen taking a cut and also because the carbon offset market is fragmented and inefficiently distributed across multiple platforms.
Carbon markets also often operate at jurisdictional borders, they're country-specific which means they don't have global reach since each country operates its own system. Also, they're not interoperable so it's difficult to purchase from one platform and send to another.
The solution: A new blockchain-based solution that offsets on-chain and traces impact. On-chain offsets provide an efficient, transparent way to reduce emissions, enabling the crypto industry to grow whilst minimizing environmental harm. By using rigorous verification bodies, alongside a public blockchain ledger, ImpactScope ensures complete trust and transparency.
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