“ForestCoin”: Connecting Nature to the Economy through Cryptocurrencies
We need the economy to progress as a species, but we also need nature to thrive. Crypto can allow us to have both.
Consumers prefer brands, products and service that do good for the planet
For years, I have been studying the economy and nature (amongst other things). Some time ago I reached the conclusion that tying the two together was necessary, because the economy is much needed for the advance of our species, but so is nature. The economy is arguably the backbone of human enlightenment, but nature brings us joy, connection and health. About a year ago, I realized that people worldwide are willing to pay more for products that have a positive impact in the environment. Since our economy is largely driven by consumption, this presents a gateway to a world in which we make the planet better off by carrying on with our economic activity. Organizations that do good things for the planet are going to be increasingly favored by consumers and therefore, going green is good business now.
The truth is we can vote with our money. By choosing where we spend it, we are able to redirect capital towards fostering the kind of world we would like to see. Throughout 2020, I entertained the idea of creating a system that would enable any company of any size to plant trees whenever a customer bought a product or a service, but I was not able to evolve the value proposition beyond a “nice to have” for companies. Such a solution would require a large effort to implement at scale, with weak unit economics resulting from its nice to have-ness.
In studying crypto (blockchain) this year, I have realized that now we have a real shot at implementing a system that connects the economy and nature. After crypto, money is now a content type, meaning that you can create a new coin and send it to counterparties with the same ease that you send an emoji. Essentially, you can create your own crypto coin through a simple HTML form. Each coin has its own properties and then people can use it if they believe in those properties, ultimately giving it legitimacy through the community.
Consider ForestCoin, our hypothetical crypto coin. Everytime a ForestCoin is issued, 10 trees get planted by a dedicated organization (which there are plenty of today). The plantation gets verified by a verification party (which there are also plenty of today) and ultimately, the coin gets issued into the market, where anyone can buy it for a given amount. The amount proceeding from the sale is split between the actors that enabled the emission of the coin (planters, verifiers and potentially an organization that manages the coin´s emission).
People that want to see a greener planet would buy ForestCoin. As the community grows, the coin would eventually gain legitimacy between members of the community. Eventually, goods and services could be bought with ForestCoin, the same way members of the Doge community could do so today. Suppose 2 billion people adopted this coin. In such a scenario, around 26% of the population would be transacting with a currency that represents an underlying biomass. As such, nature could be factored into the economy.
The advantage of a system like ForestCoin is that it would be highly scalable and frictionless. It does not involve getting deep into industry and changing things by convincing incumbents, but rather consists in giving people the opportunity to change the world for the better, bottoms up.
If people found some meaning in “ForestCoin”, it could spread very fast, as we have seen some coins spreading today through memes. We could also create other coins to support other areas of nature we would like to improve, such as plastic renewal, the conservation of endangered species and more.
Lastly, such coins should employ ecofriendly consensus protocols such as PoS and not PoW, for instance.
I think I might just give this a shot.