Autor Cointelegraph By Rachel Wolfson

Enterprise blockchain has come a long way since its inception in 2017. Blockchain for enterprise use initially began as a technology built on private, permissioned networks, primarily used for supply chain management. As blockchain matured overtime, enterprises began to leverage public, permissionless networks like Ethereum to conduct business. Fast forward to 2021 — enterprises are now applying decentralized concepts to create more efficient workflows in the Metaverse. William Herkelrath, head of business development at Chainlink Labs — a decentralized oracle network — told Cointelegraph that while the Metaverse is hard to define, he believes that it’s a collection of ecosystems that are growing naturally out of decentralized finance, or DeFi:“Enterprises need to be interacting with the outside world and will therefore be forced to have ecosystems in the Metaverse. For example, consumers want to use loyalty programs outside of single platforms, so they will be more likely to choose brands that ensure rewards can be used within other ecosystems. The Metaverse allows for data, physical assets, commercial and financial assets to be set up in a layer outside of a centralized environment.”The Metaverse for enterprises While the concept may sound futuristic, a number of enterprises leveraging blockchain are beginning to embrace the Metaverse. This topic was discussed in-depth last Wednesday at the European Blockchain Convention’s virtual conference, during a panel entitled “Building the Enterprise Multiverse.” David Palmer, blockchain lead at Vodafone Business, mentioned during the discussion that he views the Metaverse as much more than a virtual world where digital experiences via games or social media networks can take place. According to Palmer, the Metaverse is now being applied to financial concepts powered by blockchain technology, such as central bank digital currencies, nonfungible tokens, or NFTs, and DeFi. Yet Palmer noted that the layer missing in the Metaverse is a way to transfer virtual transactions to the real world. Palmer noted that a mobile phone can bridge these two worlds together, acting as a middleware. He further told Cointelegraph that Vodafone Business is leveraging blockchain to create digital identities that can be applied in both the Metaverse and in real life:“Digital identity will transcend the digital and physical worlds. For example, a digital wallet will contain a bank account, mortgage information, tokens, NFTs and more. But a decentralized identity will also have access to those credentials, allowing individuals to participate in the Metaverse and in the physical world.”Palmer shared that Vodafone Business is working on building wallets within mobile devices to host virtual identities. The notion of self-sovereign identity in a multiverse was also mentioned in Greyscale Research’s recent report, titled “The Metaverse, Web 3.0 Virtual Cloud Economies.” The paper describes self-sovereign identity as being an “internet-native social reputation coin (creator coins),” noting that data from other platforms may be transferred into the Metaverse and used for identity or credit scoring.Angel Garcia, head of global supply chain strategy and transformation at Telefonica, further explained during the panel that a digital supply chain for the Metaverse could help bring about efficiency for telcos. According to Garcia, Telefonica has taken the approach of creating a blockchain network to be used within a Metaverse ecosystem. He added that the company is currently in the process of gathering information to improve end-to-end processes. “The next step is automating those business processes and making them centralized for everyone,” he remarked. Rowan Fenn, co-founder of Rise X — an enterprise solution for companies looking to build digital autonomous organizations — also mentioned that businesses can have a digital twin of their autonomous organization to govern, operate and control analog processes: “These organizations will be able to interact and transact with each other in real-time in a Multiverse. This will also allow the digital autonomous organizations to work together in an analog world.”Fenn elaborated that companies with a digital twin in a Multiverse ecosystem will be able to produce more goods and services, while using less environmental resources. As such, he believes that this business model will allow the world to move away from a finite to an infinite economy.Enterprises already use blockchain to operate in the MetaverseWhile enterprises are still exploring early use cases for applying business models within the Metaverse, some sectors are already leveraging these environments. For example, Herkelrath mentioned that blockchain networks leveraged in the insurance industry demonstrates a Metaverse business model. Specifically speaking, Herkelrath explained that hundreds of thousands of insurance contracts are being offered to farmers globally through virtual ecosystems. He added that smart contracts built on top of blockchain networks, along with decentralized oracles like Chainlink, have made it possible to solve challenges of transparency within the insurance industry. Moreover, this has streamlined the entire insurance process to make it globally accessible to disenfranchised customers. Although it may appear that blockchain alone has enabled this, Herkelrath noted that smart contracts generated by insurance agencies require data that couldn’t have been gathered without the existence of a Metaverse:“This is made possible because you have a metaverse of companies with data coming in that is verified by a broader network. The fact that this can happen in the Metaverse demonstrates that business-to-consumer transactions can become inexpensive and accessible to anyone in the world.” How likely are enterprises to embrace the Metaverse? While some companies are beginning to develop and leverage business models in the Metaverse, understanding the technology could hamper fast adoption. Rodolfo Quijano, head of blockchain at Henkel — a German chemical and consumer goods company — mentioned during the panel discussion that the biggest challenge driving adoption now is understanding the value that the Metaverse can provide to enterprises:“Technology isn’t an issue, but it will take more time getting people to wrap their heads around what blockchain does and how this can compare with old-fashioned enterprise resource planning systems. Finding evangelists can be a big challenge for adoption in terms of blockchain being applied in the Metaverse.” Palmer added that scalability within a Metaverse enterprise environment is also an issue, along with getting companies to understand how to transition and engage with this new technology: “For a teleco, the biggest point to consider is how to connect people in the Metaverse. People will have two identities, one virtual and one physical, so the question is if we will have the bandwidth in terms of connectivity.” Moreover, Palmer believes that companies will question the role blockchain plays when it comes to Metaverse business models. However, he believes the technology is crucial for these use cases. “Blockchain is the trust and exchange layer in a multiverse environment. It’s a massive opportunity, but it will be a challenge for companies to make the transition.”

Billion-dollar companies across the globe are betting big on Bitcoin (BTC). Recent analysis from European investment manager Nickel Digital Asset Management found that 20 publically listed companies with a market capitalization of over $1 trillion have about $9.6 billion invested in BTC. Individual investors are also taking an increasing interest in the asset.The “Third Annual Bitcoin Investor Study” from Grayscale Research found that demand for Bitcoin has risen tremendously. According to the study, 55% of current Bitcoin investors began buying the asset over just the last 12 months. Grayscale’s report also notes that the market for those interested in Bitcoin investment products expanded to 59% in 2021, up from 55% in 2020 and slightly more than one-third in 2019, reflecting steady growth.Yet while the world’s enthusiasm for Bitcoin may be increasing, concerns regarding its environmental impact have become more apparent than ever. For example, Grayscale Research also found in its investor study that over 30% of investors are concerned about Bitcoin’s potentially negative impact on the environment. Interestingly, this consideration only became apparent in 2021, as shown in the report. Models to calculate Bitcoin carbon emissionsGiven the rising distress over Bitcoin’s carbon footprint, new models are emerging that aim to help investors and businesses alike understand how to ensure their BTC holdings are sustainable. For example, the Frankfurt School Blockchain Center and digital asset manager INTAS.tech published a study on Nov. 16 outlining a new approach to offsetting the CO2 emissions caused by the Bitcoin network. The formula developed factors in two approaches: a transaction-based approach and an ownership-based approach. Philipp Sandner, a professor at the Frankfurt School Blockchain Center, told Cointelegraph that asset managers and investors across Germany, in particular, are concerned about Bitcoin’s CO2 footprint being compliant with environmental, social and governance (ESG) standards. As such, Sandner explained that he wanted to create a formula that would enable asset managers, mining companies, exchanges and individuals to calculate the CO2 footprint of their BTC:“Normally, we assign the largest burden of CO2 compensation to Bitcoin mining companies, but you still have ETF issuers, companies and exchanges that want to prove to customers that they are doing something about their CO2 footprint to compensate for their Bitcoin.” According to Sandner, the goal at the beginning of the study was to first compute the global energy consumption of Bitcoin between Sept. 1, 2020 and Aug. 31, 2021. The results show that 0.08% of worldwide CO2 equivalent came from Bitcoin. Based on this number, Sandner remarked that the maintenance of the worldwide Bitcoin network required 37.97 million metric tons of CO2 equivalent. In order to calculate the carbon footprint of Bitcoin from an investor perspective, the study notes that companies can either focus on the proportional network usage in bytes in relation to the Bitcoin blockchain growth during a specific time frame or on the amount of Bitcoin held for a specific period. According to the document, an average Bitcoin transaction contains 670 bytes on the Bitcoin blockchain, representing an estimated carbon footprint of 369.49 kilograms of CO2 equivalent. Sandner explained:“These carbon emissions can be compensated with a certificate from the EU Emissions Trading System. One certificate for one tonne of CO2 is around $50, which would equal roughly $18 to compensate for a single BTC transaction. Now, if an investor or company was holding one BTC over a year period, this would cost roughly two tonnes of carbon emissions. If compensated with the EU Emissions Trading System, this would then be around $100.” Benjamin Schaub, senior consultant at INTAS.tech, told Cointelegraph that companies could apply the formula mentioned for transactions and Bitcoin ownership to compute their carbon footprint that should then be offset. “What makes this model great is that all the data needed is publicly available. There are no assumptions here, it’s just about how companies engage with the Bitcoin network.”Schaub added that Iconic Holding GmbH, which offers exchange-traded products in Germany, is currently applying this method to ensure sustainability: “We are also in discussion with a few very big exchanges. I strongly believe that over the next year major players in the space will care more about this topic.”While it’s difficult to predict the future, it’s notable that some major exchanges and exchange-traded funds (ETFs) have started to apply similar approaches to offset Bitcoin’s carbon footprint. For example, Schaub noted that the crypto exchange BitMEX is attempting to make its BTC holdings carbon-neutral. According to a recent BitMEX Research blog post, the company believes that the most effective way for users and exchanges to evaluate Bitcoin’s carbon footprint is through on-chain transaction fees. A BitMEX spokesperson told Cointelegraph that the company concluded that each $1 spent on Bitcoin transaction fees can incentivize up to 0.001 metric tons of carbon emissions, based on the company’s formula. There are only a few approaches currently available to help companies offset their Bitcoin carbon emissions, with Sandner commenting that transaction fees become more important as the Bitcoin network ages. As such, he believes that companies must consider a transaction-based approach when it comes to ensuring carbon neutrality.Schaub further pointed out that the source of electricity being used should be taken into account, noting that the model developed by INTAS.tech and the Frankfurt School Blockchain Center looked at the energy mix as applied in the United States and Germany: “This ensures that we can observe more miners becoming aware of this topic and are looking for electricity from renewable sources.”In addition to exchanges like BitMEX developing models to calculate Bitcoin carbon emissions, some ETFs are doing the same. For instance, Canadian Bitcoin ETF issuer Ninepoint Partners launched a carbon-neutral Bitcoin ETF in May 2021. Alex Tapscott, managing director of digital assets at Ninepoint, told Cointelegraph that while this was the right thing to do, it also benefits the business as a whole:“Many investors with ESG requirements were concerned about Bitcoin’s footprint and have stayed on the sideline. We wanted to make it easier for them to be stakeholders and participate in Bitcoin’s upside.”Tapscott added that oftentimes, the investors in Bitcoin funds, along with the miners themselves, are the ones demanding that the industry be more sustainable. Given this, Tapscott believes that in 10 years, Bitcoin will be close to 100% renewable: “It may even help subsidize the development of renewable projects because it’s a rough and ready buyer you can place at source. In the meantime, carbon offsetting is a good way to bridge the gap.”How accurate are these models? Although it’s becoming more important for various companies to offset their Bitcoin carbon emissions, it’s vital to recognize the challenges associated with the models discussed. For instance, Sandner remarked that all of the numbers compiled within the model he helped create are changing over time. “The hashrate is changing for example, as we recently saw with the Chinese mining ban. The hashrate dropped by 50%.” As a result, Sandner is aware that the fluctuations of metrics must be taken into consideration. He added that each country has a different mix of CO2 intense energy, noting that Norway tends to be greener than other regions. Lastly, Sandner pointed out that the carbon prices need to be carefully observed, adding that prices have been increasing during December. Related: Point of no return? Crypto investment products could be key to mass adoptionMoreover, a BitMEX spokesperson mentioned that the company’s formula is not a perfect methodology, noting that the exchange expects and welcomes critique. However, the company believes that the formula does improve on other estimates out there. According to the post, the equation used is fairly simple, as only average Bitcoin prices are leveraged rather than estimates of Bitcoin mining electricity costs. Sandner ultimately believes that the largest share of work to be done is still ahead, noting that most of these approaches are still emerging:“The Bitcoin mining council in the U.S. for instance is trying to find new models. Once these methods have been developed then companies will need to adopt them, but it’s still too early. Awareness is starting to emerge, but this is just the beginning.”