The Future of Crypto with Founder of Carbon Neutral Blockchain 5ire

The recursive: There are many prejudices when it comes to blockchain with all the carbon emissions it will cause. To what extent can these prejudices be avoided and you can use blockchain also for sustainability projects?

Vilma Mattila, founder of 5ire: The first way to fix it is of course from the consensus itself. Because right now the consensus is based on who uses the most power is able to mine Bitcoin and that’s not how it should be, there should be a different kind of consensus mechanism.

So in our case, the consensus is based on the activity of the nodes, or the activity of the computers, which means you don’t need external hardware, which also eliminates the problem of cooling the hardware, because cooling uses a lot of electricity – even almost more than production itself.

So I think if we talk about Bitcoin for example, it can be a reuse of electricity. There are many people who use the heat for growing vegetables, or they use the heat for other purposes, or they use hydropower, they use wind power or solar energy.

In such cases, of course, it does not have a high environmental impact and does not produce as much of a carbon footprint. But to neutralize the zero in terms of blockchain, they could possibly use electricity that is currently wasted and not being used, because more electricity is actually wasted every day than is used all the way – from IoT devices to blue lights to industrial electricity.

There have been cases where they are repurposing the electricity to use Bitcoin, so how can we completely neutralize this? I believe that this will be possible in the next five to 10 years, with a 90% probability due to the fact that this is a very early stage industry and there has not been much innovation in addressing the core challenge.

But from changing consensus to repurposing, to restructuring the way businesses operate, I believe that in five years at least 30 to 40% of all mining, as well as digital currency production could be completely carbon neutral.

How does 5ire fit into this?

At 5ire we are currently already carbon negative. In addition, we pay companies to have a sustainable approach. So, for example, we rank companies according to how sustainable they are. If Coca Cola right now takes an approach to go from electricity to hydropower, and they are our client, we will reward them.

So in the Bitcoin network they reward whoever uses more power. In our case, we have around 1,000 companies hosting our network, and we pay the transaction fees to those that are more sustainable.

How do we define what is sustainable? It is in accordance with the UN’s 17 SDG goals. So from there, we confirm whether a company is taking action or they’re not taking action, because if you go to talk to them, they won’t know how much impact they’re generating, nor if they’re generating any results. They want to know that we are taking action towards sustainability, but no one is measuring the result.

Which industries do you think will benefit most from your solution at this time?

We think about banking and money transfer, especially in countries and regions such as Indonesia, India, Asia Pacific, Latin America. First, because they don’t have ATM networks, there is no infrastructure, it would be extremely expensive to build the infrastructure in remote areas, etc.

And still in Asia there are 4 billion people, of which 1 billion people do not have access to identity, nor access to money. We believe that we can influence these people directly by giving them digital identity, and through that access to banking services, access to credit, access to ownership of the land.

Because right now they can’t confirm that they own the land, which means they can’t go to the bank and ask for a loan, like we can in the Western world. We recently had a pilot project in Nigeria, and now there are people who can verify through the land registry that they own this land, and they can get credit.

Do you think Web3 will be as disruptive to banking and financial services as Web2 was a couple of years ago?

I definitely think it is very impactful due to the fact that most people who need banking services do not have access to physical banking services. And if you talk about Fintech, most of them don’t have identity, so they can’t even register in Fintech applications.

And they can use Web3 despite having a publicly issued identity. Even if they are immigrants, for example, they can get direct access to money.

So I think it will benefit most people who have never used a bank account or have a credit card – they will jump directly from nothing to Web3.

As for remittances, I think the amount will be much higher in Web3 due to the fact that if you sell services for example, and let’s say it’s oil and gas, it’s very troublesome if you need to send it in tranches, as well as very troublesome if you send for a transaction. from countries with high inflation like Argentina or Venezuela, or even Brazil or Kenya, because there is sometimes a 20 to 40% fee between small national currencies. And if they switch to USD, it’s too complex, and if you don’t operate in the eight major currencies, it’s too complicated to transact across borders.

As an angel investor, what kind of challenges do you see solved by the entrepreneurs you invest in?

I would say 60% of my investments are in the blockchain space. 40% is either in digital identity, or verification, banking or payment processing. I often invest in technologies that provide accessibility from the user interface to anyone who knows nothing about blockchain or coding.

Because if I call, I don’t need to know how these technologies work. So I invest in tools that you don’t know are using Blockchain, in solutions that speed up the network so people can operate faster.

Let’s say I mostly invest in emerging markets where the issues are very expensive. You won’t be waiting half an hour for the transfer or for the coffee to go through. So I invest in the improvement of technology, as well as in women-driven technologies, for example.

There are parts of society where there is a lack of financial education for women, a lack of tools for developers in certain segments of the industry, for people of color. People look across Africa and don’t realize the magnitude of the opportunities.

In this sense, is there a challenge you would like to see solved by a blockchain solution or a Web3 solution in the sustainability space that is still not there?

I think this will be the traceability of what is actually organic or sustainable, because today it seems that everyone puts their stamp on it and there is no unified authority on traceability. What is the source of it and where does this come from.

This is the problem even for the fuel for electric cars. For example, the batteries in electric cars – it can be a bit questionable how environmentally friendly they are, based on what happens to them at the end of their life.