Sustainable investing in blockchain
Blockchain technology’s impact should be positive in all aspects. That's why we make sure we don't contribute to any negative side effects.
An exercise in blockchain-sustainability
We want blockchain technology to materialize in forms that are sustainable for the future.
We have come to realize that technological development takes time and early versions of the technology can suffer from unsustainable elements.
The foremost example with blockchain technology is the process called ‘proof of work’, also known as ‘mining’. This method is with high probability a large factor in CO2 production.
With the incentive to counter these negative side effects, we have created a framework which allows us in some degree to measure the impact blockchain technology has. This way we can counter any negative side effect and measure the impact of our respective investments.
Sustainable Development Goals
We believe blockchain technology’s impact is still underestimated and the positive effects not yet widely recognized. We acknowledge the SDG’s set out by the UN counsil and strive to align investments with the greater goals set out for the world.
We deem the following SDG’s particularly applicable to our cause:
8. We have seen that blockchain technology already has created more jobs. and we expect this trend to continue in the future. We believe that in the future blockchain technology is a necessity for further economic growth.
9. Blockchain technology is exactly this: an innovation that allows for new financial infrastructure for many kinds of industries who are involved in, but not limited to, wealth management.
The Sustainable Development Goals are a collection of 17 global goals set by the United Nations General Assembly in 2015 for the year 2030. The SDGs are part of Resolution 70/1 of the United Nations General Assembly.
We're DeFi Capital— A blockchain fund forec
This new technology is in its current form still many years away of its true potential, but even now the impact is measurable across a variety of areas.
We believe it is necessary to create a framework in which we can measure the impact we strive to achieve with our investments. The three key performance indicators are environmental Impact, economic Impact and social Impact.
Blockchain has been known to have some side effects. There's especially concern about the energy consumption of Bitcoin, or more generally, mining. This concern is what we would like to address.
Individual economic impact
We want to be able to measure what the effects of particular blockchain enterprises are on individuals in these areas. In turn we want to measure what this says about the investments we do.
We are sure about the social impact of blockchain technology for many people. Especially decentralized finance as the new way of engaging with our wealth will have a lot of impact on our lives. For example, see our use cases.
Investing in blockchain sustainably and responsibly
If there are negative effects, and if we invest in it then we are responsible for it. Bitcoin and Ethereum's effect on the environment are known and based on it we have determined a reasonable compensation.
Maybe it's our generation, but we have never understood why we have neglected our environment so much in the past. This time we will not ignore the environmental impact technological innovation has.
It has been shown now multiple times that there's a negative environmental effect with the process known as ‘mining’. What is mining? Mining is the process by which transactions are written in the blockchain, while at the same time securing the blockchain and rewarding individuals for their effort in doing so.
This process uses energy in the form of computational/calculating power, as the authority to process and secure transactions.The direct consequences are that if a network is successful, it uses massive amounts of energy. This energy is currently only in part generated by clean methods. This means that mining is directly related to harmful ways of energy production and consequently CO2 production.
We are aware of the negative side effects the process of mining has and have therefore spent considerable time creating a solution countering these negative consequences for our environment.
Very large factories and server halls have been set up to be able to mine Bitcoin at a large scale. The current energy production of all the mining farms around the world is bigger than that of a country like Denmark.
Bitcoin Energy compensation
According to the Bitcoin Energy Consumption Index the total CO2 generated by the Bitcoin network annually is over 26KT.
In the case of Bitcoin (since there's more blockchain projects using mining) measured per transaction this means a total of 290kg of CO2. (per 09-19) This is a huge stain on what Blockchain technology can be for the world.
DeFi Capital will compensate every transaction it does on a blockchain that uses mining.
This means that not only all transactions involving Bitcoin will be compensated but also any other blockchain technology project using the process called ‘mining’. The fund will keep track of every transaction made, report annually and compensate CO2 as part of the costs of the operation.
See for yourself here.
Make sure to invest in sustainable blockchain technology without a footprint
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Individual economic impact
We expect blockchain technology to have a big impact on individuals lives, especially their finance. We're all for enabling people to become autonomous in their finance. To be able to freely make financial decisions, take or provide loans, send and receive capital, easily change between currencies, but also manage identity and content. At least to begin with measuring if blockchain technology is having an impact at individual lives we monitor the following metrics, every month, for every investment we do:
- 1. Average daily transactions
- 2. Unique users
- 3. Unique addresses
- 4. Total value locked in DeFi applications