Blockchain technology has often received criticism regarding its relation to environmental sustainability, particularly due to its energy-intensive procedure. To address this, many organisations are working on building more eco-friendly solutions.

In an interview with e27, Bernhard Kronfellner, Partner and Associate Director of Digital Assets, Blockchain, and Metaverse at BCG, explains how blockchain can promote sustainability.

According to him, promoting and incentivising sustainable lifestyles among customers is the way to go.

“The problem with sustainability is the following: You can force corporations to work more sustainably, to produce more sustainably, to write those reports … But you cannot force individuals. You cannot say you must not use these plastic cups when the products are widely available to purchase,” he says on the sidelines of the recent TOKEN2049.

“But what crypto is very good at is incentivising individuals with tokens to do something in a certain direction. So, why not use a token as a loyalty point to incentivise good behaviour?”

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Kronfellner gave the example of BCG’s collaboration with VeChain, which resulted in the development of VeBetterDAO, a platform that rewards sustainable actions and aims to redefine how individuals and businesses approach environmental responsibility.

One use case is Mugshot, which allows users to take a picture of their coffee drinks and upload it to earn tokens. The difference is that users must use their own eco-friendly cups instead of the usual plastic cups provided by coffee chains. Using technologies such as AI, the app can verify that the user was actually in a coffee shop and used a reusable cup for their coffee.

This will allow them to earn tokens for their eco-friendly behaviour.

According to Kronfellner, the project gained around 40,000 active users at its beginning, starting with the VeChain community. However, with only organic marketing, it has grown significantly to 500,000 weekly active users.

Blockchain is the way to go

Seeing this use case, one might wonder why blockchain has to be included in this project. If our goal is to incentivise, should the existing loyalty programmes be enough?

There are advantages that the blockchain can offer, starting with the ownership of the token itself.

“It is not a loyalty point in your app which the app itself might disappear,” Kronfellner says. “You really own this token that you earned for your sustainable behaviour. That is why the blockchain is a very good choice.”

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However, using blockchain to promote sustainable behaviour comes with its own challenges. One of them is creating a user experience that encourages the expected behaviour, but Kronfellner sees this as a tech-specific challenge.

The bigger one is more of a chicken-egg problem.

“When you are too small [of a company], you cannot go to the big companies [for a potential partnership] because they will need active users [as a proof of concept]. So, what you need to do is start with your own app and your own value proposition, then boost the user number. Partner with Web3 apps to bring in their ecosystem, then you move on to the Web2 players and climb the ladder to say that, now we are big enough to go to the big brands of the world.”

In creating blockchain solutions that promote sustainable behaviour in customers, startups need to consider the X-to-Earn factor.

“X here is the activity that one needs to do to earn the tokens,” Kronfellner says. “It should be something one does daily; Mugshot is a good example as we get our coffee everyday. Repetitive actions are a good X-to-Earn. Something that you only do once in a while does not keep the clients engaged.”

Kronfellner acknowledges that these initiatives will require plenty of marketing, but there is a shortcut in working with big brands and tapping into their existing audiences.

“List potential future partners in mind from the big corporations that you want to work with,” he closes.

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