Oil is Dead: Green Energy Crypto Assets are Today’s Strategic Investment
In the face of a dying oil industry, even the supermajors know it’s a matter of time. BP revealed their plans to invest in renewable energy, and Total SE predicts that oil demand will end by 2030.
The world has built massive economies around the black gold, but it’s no longer a reliable source for fuel or income. And with so much wealth tied to oil, everyone is scrambling to invest in alternative securities.
It’s no wonder that people are buying cryptocurrencies.
Crypto seems to scare most people because of its association with dark money, criminal activity, and the market volatility. But I have news for you: those same problems exist with fiat currencies, too.
The alternative crypto market has seen incredible growth over the past decade for those who invested early. Its decentralized nature attracts a variety of entrepreneurs and industries, including green energy tech. And at a time when oil still dominates the energy space, renewable energy companies turn to crypto in order to gain an advantage over the fossil fuel goliaths.
A Short History of the Crypto Gold Rush
Ever since the Great Recession of 2008, people have demanded that governments and businesses take action against corruption, climate change, and the growing wealth gap. After growing tired of waiting for a top-down solutions, Bitcoin entered the picture in 2009 as an independent response to the economic fall-out facilitated by existing institutions.
Although many were hesitant about it in the beginning, digital currencies have gained incredible popularity over the past decade. A report from the University of Cambridge found that the number of users increased from 35 million in 2018 to 101 million in 2020, nearly tripling over the course of just two years. And even governmental authorities in China and the EU are considering a CBDC in order to maintain a strong financial presence in a digital world.
The majority of crypto users are retail users rather than institutions (i.e. investors), which indicates that people see a practical value in crypto. Traditional investors may have regulatory barriers to overcome, but a growing number of them see long-term promise in the asset nonetheless. And that agency over personal wealth will continue to spur an increase in market adoption by the masses.
But crypto gave us more than just an alternative form of currency. Blockchain was originally used to verify trust between crypto holders, and now it’s being considered for numerous applications worldwide.
Today, crypto and blockchain technology can be utilized for a variety of improvements — including green energy. It not only has the potential to make clean energy distribution more efficient, but it can also make it more accessible and decentralized.
Crypto Today in 2020
Most developed countries have a stable currency with strong central banks. And with a strong financial infrastructure, those same economies can afford a robust, national transition from fossil fuels to renewable energy.
But for those living in countries with high inflation, nearly invaluable currencies, or corrupt centralized financial institutions, crypto offers a tether to stability. And while those populations are often the most vulnerable to climate change, they lack the economic or political influence to initiate a national transition to clean energy.
In Nigeria, for example, merchants and consumers alike use Bitcoin for transfers and transactions. When the price of crude oil dropped in the wake of COVID-19, the value of the Nigerian naira also dropped.
So nearly one-third of the population started buying cryptocurrencies rather than hoarding a struggling currency. As a result, citizens have grown their wealth and increased their purchasing power on the global market — no thanks to the central bank or the dying fossil fuel industry.
Paul Ezeafulukwe from Lagos-based Bitfxt recently highlighted the issue of money leaving the continent. “It often leaves to Europe or Dubai before coming back to here,” he said during the Central Bank Digital Currency Africa Conference. But with crypto and other digital currencies, money can move directly between African countries, which can help maintain and generate wealth within the countries.
And it’s not just a phenomenon in Nigeria. Vietnam, South Africa, and countries throughout Latin America have all started using cryptocurrencies either in place of or in addition to fiat.
Financing the Transition to Green Energy with Crypto Assets
Governments around the world are issuing green bonds as a way to encourage clean energy investments. Bloomberg NEF recently reported that the total number of green bonds issued has surpassed $1 trillion. And as countries face a rapidly approaching deadline to hit carbon emission targets, these bonds will hopefully accelerate that transition.
But green bonds are often gobbled up by institutional investors or bundled into ETFs. Retail investors rarely have the opportunity to spur innovation in a direct, impactful way.
In response to traditional investment routes, many have started special purpose acquisition companies (SPACs) so that they can claim a piece of promising clean energy companies early on. But when the funds are being raised, investors don’t know which company the SPAC intends to support. Plus, young green energy companies are often overlooked for SPAC mergers.
But luckily, some energy innovators offer an alternative solution.
Tokens have become another popular digital asset over the past few years. While tokens don’t have their own blockchains (like cryptocurrencies), they are primarily used as a form of currency within a specific ecosystem.
WPO
France-based WPO has created the GreenToken to encourage investment in green energy solutions. €100 worth of GreenTokens can be used towards any green energy project in the GreenToken ecosystem. Those projects can then use the €100 towards innovation and production. Throughout this exchange, WPO also gleans data from the transactions, which companies can use to improve their services and technologies.
As a result, consumers can become a customer of a company before it successfully proves its technology, and companies don’t have to seek funding from multiple investors to fund their projects. Green energy exploration can happen faster if we give more agency to the direct consumer.
WePower
Similarly, WePower ($WPR) has built their own blockchain-powered platform for $WPR holders to exchange tokens for green energy. Currently, corporations can sign a power purchase agreement (PPA) with a utility company to secure green energy costs at a certain price for a fixed duration. But these agreements aren’t available or accessible for everyone.
With $WPR, holders can invest in different projects from various producers and bid on green energy. It also secures lower prices for those token holders because they invested at an earlier, riskier stage of project development. As of 2020, $WPR is only available to businesses, but the token certainly has potential to be utilized by retail consumers in the future.
Rowan Energy
Rowan Energy has also built their own green energy blockchain, offering a true P2P energy solution. In the UK, there currently isn’t an economic incentive for retail consumers to install solar panels. But with Rowan Energy, people can invest in solar panels and then earn revenue from the energy they send to the grid.
Participants purchase Rowan Tokens to buy energy, and the prosumers who generate the green power can either keep the Tokens in the ecosystem or sell them on the exchange. Additionally, Rowan has built a miner that attaches to solar panels so that prosumers can generate Tokens as well.
Limitations of Tokenization
These solutions only host their platforms in a limited number of jurisdictions. In other words, if you want to purchase their tokens, you can only trade them for green energy produced in certain countries — for now.
But P2P energy means that the local community invests in the landscape of their energy production and consumption. Plus, these localized efforts also give companies the opportunity to test their solutions on a smaller scale before expanding globally.
There’s also additional incentive for people to invest in these technologies early on so that they don’t pay a higher price for tokens later.
Green Power to the People
It can be argued that cryptocurrency isn’t a solution to the greater problems that climate change presents. And it’s not.
But governments continually fail to make the changes necessary to curb climate change. So now, in the face of droughts, fires, and flooding, cryptocurrency grants people some agency over their financial futures.
And when the global economy participates in the crypto markets, they create a greater sense of financial stability for those most affected by precarious economies. That security can be a significant steppingstone towards the green energy transition.
Climate change continues to be a pressing issue, green energy innovation everywhere will need as much funding as possible. And if governments and other investment firms continue to drag their feet to become leaders in the green energy revolution, it’s up to anyone and everyone to make the investments themselves.
Anyone can purchase crypto and tokens and start investing in green energy innovation today. People don’t become rich because they invest in the status quo. The economic empowerment of cryptocurrency and its solutions are nearly limitless.
Rockefeller and Musk saw what the future would bring — do you see it, too?
