Whitepaper – Blueprint for a Blockchain-Based Voluntary Carbon Ecosystem
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In this whitepaper, I propose a blueprint for a more robust voluntary carbon ecosystem. The solution I propose leverages blockchain technology to create a multi-stakeholder, market-driven solution to create, verify, track, and sell carbon credits more effectively. In this paper I identify the key problems associated with existing voluntary carbon markets; specifically, low-integrity offsets, misaligned incentives, poor governance, and low-fungibility. To address these concerns, I discuss the merits and application of blockchain technology; specifically, the trust, immutability, and efficiency they bring. Although, not a panacea, I explain how blockchain technology can improve carbon integrity, transparency, prevent fraud, and lower costs. The solution I propose relies on an interconnected web of traditional voluntary carbon market participants working together to create, verify, track, and sell Carbon Coins – tokenized carbon credits. To operate effectively, these participants are arranged within one of four distinct layers: Governance, Consensus, Primary Market, Secondary Market. I discuss how each layer functions and its value to the larger ecosystem. Finally, I explore the likely challenges the protocol will face if implemented.