Nature Coins - A New Eco Conscious Cryptocurrency That's Captilizing Off Carbon

There is a new wave of international currencies threatening to overturn the balance of economic power on our planet, and although you’ve probably heard of them already, they are currently in the midst of a major rush of innovation, and there’s a good chance you’re about to experience their effects in a much more pronounced way in the years to come.

The currencies in question are cryptocurrencies, fully digital assets that like traditional fiat currencies issued by governments around the world for hundreds of years, gain their value from user trust and acceptance. Unless you’ve been totally off the information grid for the past 8 years, you’ve probably heard of Bitcoin, the most well-known of the cryptocurrencies, which started it all with its launch in 2009. The price of Bitcoins has risen from a few cents USD in 2009 to today’s price of close to $4,300 USD. The second most popular cryptocurrency, Ethereum (a relative newcomer, having launched in July of 2015) sits at just over $300 USD as of August 17, 2017.

At the center of cryptocurrency technology is something called a blockchain, a transaction database that acts like a distributed ledger, or record of financial transactions in the system. The main innovation over traditional currencies is that the blockchain database is recorded on every computer running a given cryptocurrency’s program, which is responsible for sending, receiving, and storing the currency to the collectively shared database.

Other cryptocurrencies have been entering the scene in recent years and months at an ever-increasing rate, many of them designed for specialized uses, including everything from attempting to further decentralize the creation of their currencies (called “mining”), to attaching value to various human endeavors, including application development, and sustainable actions such as carbon sequestration. But before we go into what the big deal is with these newcomers to the financial system, and why you should care, we need to go back in time a little for some context.

Digital money is not a new concept, with the exploding popularity of the Internet itself in the 1990s birthing a slew of digital currencies tied to ideals of decentralization, privacy, convenience, and freedom from bank or government meddling. Up until recently, however, every attempt at such revolutionary monetary reform failed. Projects with names like Ecash, bit gold, b-money, and RPOW flopped due to technical or political impracticalities and lack of support from the largely complacent populations of the richest countries, who disproportionately influence monetary policy.

Then, 2008 happened. The subprime mortgage crisis was in full tilt in the U.S., the U.S. Federal Reserve had begun to print money like it was going out of style, and around the world, stock markets crashed while governments bailed out banks with taxpayer money.

In January 2009, an anonymous programmer with the pseudonym Satoshi Nakamoto launched Bitcoin, with its founding philosophy hinted at in some text imprinted on the first block in the blockchain: “03/Jan/2009 Chancellor on brink of second bailout for banks”.

This obvious dissatisfaction and lack of trust with government and central bank control of our monetary system has guided the cryptocurrency movement ever since.

“Bitcoin purposefully avoids having central power anywhere,” says Andreas Antonopoulos, technologist, cryptocurrency entrepreneur and author of Mastering Bitcoin and the Internet of Money. “That’s the only reason it’s the digital currency that continues to exist. Digital currencies in the 80s and 90s got shut down… they got stomped on. One of the reasons Bitcoin is still around is because it’s so decentralized. The bigger it gets, the harder people are stomping.”

Antonopoulos thinks that in 20 years it will likely be evident that just as today most people in the world are aware that there should be a separation of church and state, they will likewise be aware then that there must be a separation between state and money creation and control.

“Giving the state complete monopoly over the creation of money is a very big and dangerous power for states to have. If you look at it historically they have abused it at every turn. They have used it to fuel debt, to fuel war, and to oppress populations, and they’ve also mismanaged it,” he says.

In Antonopoulos’ mind, we are still in the economic crisis that started in 2008.

“Most of the deep seeded problems were only papered over. We’re going to see even more significant problems in the future, and a lot of those problems will have to do with currency,” he predicts.

As Antonopoulos points out, for most people in wealthier nations, currency is something they never have to think about. However, the moment a problem with a currency comes up, the most important parts of society: commerce, food, security, jobs and the entire economy fall apart.

“There are studies that show the rise of inflation, economic depression and unemployment are very closely related to extremism and fascism,” Antonopoulos explains. “Out of 194 currencies, you can pick 10-15 that have long, stable runs (without currency crises), and those are the exceptions. That is not the norm if you look at other currencies. It’s a mess. In South America, it’s every 10 years (that there’s a crisis). In Africa, it’s every 5 years. So currency isn’t something you need to think about until something goes badly wrong, and I think that’s why Bitcoin came along.”

Besides centralized control of policy and currency management by governments, cryptocurrencies like Bitcoin also seek to decentralize and demonopolize money transfers and monetary tools.

The fact of the matter is, most of the time in today’s society, when you buy goods or services you’re paying a corporation, which may pay another corporation, and so on. The problem with trusting corporations to transfer our money is that corporations often have their own corporate codes or philosophies that may interfere with an individual’s transactions.

An extreme example of this was in 2013 when all of the payment channels for WikiLeaks were shut down. PayPal, Mastercard, Visa, and American Express all bowed to pressure from either internal or external forces to cut off WikiLeaks’ donation payments, while at the same time, one could still contribute to the KKK and other white nationalist organizations through these channels.

“They were taking a position and that position was not neutral,” says Antonopoulos. “That was a wake-up call to a lot of people for digital currencies.”

On top of the benefits of decentralization that cryptocurrencies create in our monetary system, there are a lot of other reasons they are rising in popularity: They can be programmed and evolved; They cut out third parties, following the Internet’s lead of disintermediating trade and increasing efficiency; They allow fast international money transfers that are much cheaper than traditional money transfer options; They also allow “the unbanked” in places with little access to banks or financial tools to participate more effectively in local and global economies; They facilitate micro-transactions (allowing fractions of a cent to be processed for things like web ad clicks), since Bitcoins and other cryptocurrencies are divisible by 8 decimal places; The blockchain can enable many other values besides money to be traded or recorded. For example, votes or property rights can be securely, immutably recorded.

Another big one: cryptocurrencies are much more secure than traditional currencies.

“If you have 1,000 people with $100 of cash and they each have it in their pocket, in order to steal that cash you have to rob 1,000 people. If they put it in a bank, you just rob the bank,” explains Antonopoulos. “Worse yet, you’re the banker, and you steal the money, as happened in 2008. Bitcoin is decentralized, as most cryptocurrencies are. It’s more akin to 1,000 people each holding $100 in their pocket. There’s no intermediary or central location. To take away the Bitcoins you’d have to rob 1,000 people.”

Cryptocurrencies haven’t solved all the problems of the monetary system, however. For one thing, there is some concern in the cryptocurrency community that Bitcoins have become more centralized since the currency’s founding, with increasing power resting in mining collectives or companies. Miners were originally conceived as single people on single computers, but have evolved into massive mining farms with large stashes of Bitcoins and other currencies that could theoretically wield their power to manipulate the market.

“There is a tendency for (human) systems to centralize over time, and there is always resistance to that in other parts of the system,” says Antonopoulos. “Preserving decentralization is something that we have to fight for, just like preserving privacy and working towards decentralization is something we have to fight for on the Internet. But we’re still fighting the good fight to preserve those principles too because they’re worth preserving.”

Some up and coming cryptocurrencies are attempting to address one of the other major criticisms of Bitcoins: the financial and environmental costs associated with running the large “mining farms” that create and maintain Bitcoins and the plethora of other cryptocurrencies using the same technology.

One such cryptocurrency currently in development is the ECO coin, which seeks to address these excess costs, while also providing an example of the way the economy and the Earth’s ecosystems can coexist and support one another, instead of being at odds.

“The inventor (of Bitcoins), Satoshi Nakamoto, didn’t design the system for the scale that it is right now and didn’t account for mining farms. Many consider these a huge waste of energy,” says Lewis Just, ECO coin project lead and designer at Next Nature Network, the company behind the creation of the currency.

Indeed, according to tech and science magazine Motherboard Vice, more than 1.6 U.S. households could be powered for a day by the electricity costs of a single Bitcoin transaction, and by 2020, Bitcoin could consume as much electricity as the entire nation of Denmark.

Just mentions a protocol called “Proof of Stake” that some cryptocurrencies already use, and which he thinks offers a viable, more environmentally friendly alternative. Whereas Bitcoin’s and other cryptocurrencies’ “Proof of Work” protocol awards coins and verifies the legitimacy of transactions on the blockchain by requiring “work” to be done in the form of decryption, Proof of Stake randomly assigns coins/tokens to cryptocurrency wallets (the file that contains the actual money) based on the number of “coins” a wallet holds. The more coins you hold, the more chance you have of being selected to create the next block in the blockchain and receive newly created coins. Although this saves a huge amount of power, it doesn’t address the problem of wealth concentration given the fact that it encourages those who have the most coins to get even more of them.

ECO Coin, which has already tested its currency with 50,000 people, plans to use a form of Proof of Stake, and/or tag onto an existing blockchain (potentially a Proof of Work one) to regularly imprint a “fingerprint” that verifies transactions in a more immutable way. However, their “mining” process will also involve the currency being awarded to people through sustainable actions in real life, such as making certain food choices, commuting via bicycle, or using less energy. The whole system is being designed to be decentralized and governed by its users, says Just.

Antonopoulos takes the position that we will always need at least one Proof of Work blockchain, since the technology behind it is much more immutable than Proof of Stake, and can’t be changed without spending unrealistic amounts of energy. Further, compared to the traditional monetary system, Proof of Work cryptocurrency systems likely use a lot less energy, he notes, since the current system still uses a vast network of data centers full of computers, not to mention the resources used and pollution caused by millions of commuters travelling to work, and the large, expensive infrastructure of offices and banks.

Aside from the debate about energy usage, there’s also the argument that tying a currency to real-world value is better than the way traditional currencies and cryptocurrencies like Bitcoin work, similar to how currencies of the past were backed by gold, but in some peoples’ minds, much better. (In fact, there are now more than one cryptocurrencies that are theoretically backed by gold.)

Ven, a particularly stable cryptocurrency with a value based on a mix of other currencies, commodities and carbon futures pricing, claims it has helped put over 25,000 acres of Amazon rainforest under protection by buying the land as “carbon assets” to back the currency. The currency plans to continually use Ven reserves to make carbon asset purchases.

“The more Ven in the world, the more carbon we hold,” they write on their website. “We're aiming for 0.5% of commodity trades priced in Ven - creating a $1 billion fund for nature.”

There are a few other cryptocurrencies already in the marketplace as well that seek to leverage the power of the blockchain to make a positive change in the world while tying themselves to real-world value.

EverGreenCoin, for example, wants to leverage its currency to create renewable energy infrastructure to feed back into the grid as a net energy producer, using Proof of Stake mining to more efficiently create the currency and maintain the blockchain, while also investing in projects such as forestry and wildlife rehabilitation.

Another cryptocurrency called Dash, which is itself working on ways of decreasing energy used by its network, seeks to address other perceived problems with Bitcoin, such as long transaction times, high transaction fees, and ineffective, centralized governance.

“Bitcoin’s main problem is that it lacks effective governance, which manifests itself in the many long-running debates about how to improve Bitcoin,” says CEO of Dash Core, Ryan Taylor. “In the end, most of the critical decisions affecting users are made by cryptographers and programmers – most of whom lack a comprehensive understanding of the payments industry and the mechanisms through which adoption occurs.”

Taylor is referring to the well-known problem in the cryptocurrency world that for laypeople, using Bitcoin and similar platforms is not easy, hence why, despite the benefits, cryptocurrency as a payment method has been embraced by a relatively small percentage of tech-savvy enthusiasts.

Dash is working to change that by creating more streamlined ways of using cryptocurrency, including through debit cards. The Dash governance model is also particularly decentralized and participatory compared to Bitcoin and other cryptocurrencies, which may further entice users who want more control of their currency.

“Community members propose and vote for projects designed to further improve and develop the Dash ecosystem,” explains Taylor. “Approved proposals are paid for directly from the blockchain. Dash is the only major self-funded, self-governed organization in the cryptocurrency industry.”

Regardless of whether Bitcoins and most other cryptocurrencies can be improved upon or used to do more good in the world, it looks like they’re here to stay, and at least for the foreseeable future (pending a catastrophic financial system collapse), so are our traditional, state-backed currencies.

 “I don’t think cryptocurrencies will replace, but will rather augment (state currencies). What I mean by that is that we’re accustomed to a world where currencies play a zero-sum game carrying a national flag,” says Antonopoulos. “Now there are more than 2,000 autonomous digital currencies independent of nation states and banks.”