Investors have approached blockchain with more than a healthy degree of skepticism, though it has undoubtedly brought about transformational change across three levels: Infrastructure, protocols, and applications.
However, investors are waking up to this revolutionary potential of blockchain, with a Forbes article revealing that “total corporate and government spending on blockchain should hit $2.9 billion in 2019 … and reach $12.4 billion by 2022.” Fundamentally, blockchain’s value proposition is that it can “reduce cost and friction for users.”
Social Entrepreneurship Through Blockchain
Beyond reducing cost and friction, blockchain is enabling socially attractive investments to offset carbon emissions, contribute to clean energy production, and generate healthy returns. One investment vehicle on the blockchain reflecting this transformational change is the Emerging Markets Solar Fund by Invictus Capital, which “offers long-term returns whilst contributing to global clean energy production through the financing of solar energy infrastructure.”
This is a prime example of social entrepreneurship, or the art of doing good and doing well, modernized by current technologies. Naturally, global population growth, especially in emerging markets, combined with a greater awareness of climate change, is fostering discussions in bringing solar energy to developing countries. OneWattSolar is one blockchain-powered energy company turning this discussion into action with thousands of existing customers in Nigeria (disclaimer: The author is an advisor to OWS).
Solar energy in emerging markets is perfectly positioned for mass adoption, reflected by the fact that 63% of new renewable investments were made in emerging markets. Another clean energy company generating and selling sustainable electricity is the Sun Exchange, operating in South Africa.
Greater awareness of the consequences of global carbon emissions has led investors towards carbon-reducing projects like the Sun Exchange, with some coining this shift the “Greta Thunberg effect.” The changing market has led Invictus’ Emerging Markers Solar (“EMS”) Fund to team up with Sun Exchange, with the Fund now open for subscriptions using blockchain-based Simple Agreements for Future Tokens (SAFT), modeled after Y Combinator’s famous Simple Agreements for Future Equity.
Money Talks — Contributing to Clean Energy
While headlines and public attention have been wrapped around the issues of carbon emissions and climate change, nothing speaks louder than money. Investments into clean energy (like solar) will drive real change, even beyond environmental issues.
For instance, Africa is plagued with issues ranging from inadequate power grids to corruption, forcing some to produce their own energy with diesel and petrol-based generators. Solar energy is simply a better, cleaner, and even cheaper solution for families that need to meet their energy needs, and blockchain is one way to make investments into solar more accessible.
Healthy Returns
Of course, investors aren’t here just to do good and stop climate change — the primary thesis always has been and always will be looking for a high ROI. Solar energy is indeed a financially promising vehicle, as the utility sector of the last 100 years is literally being wiped out by renewables.
The statistics are staggeringly in favor of renewables, as Financial Times’ analysis shows that “wind and solar projects will produce 3 to 4 times more useful energy at the wheels than oil” and “6 to 7 times more” than petrol.
Ultimately, blockchain made many promises since the birth of Bitcoin in 2008, and many of the most exciting promises are finally being realized with blockchain-based investments like EMS that can truly make a difference.