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It’s not for lack of desire-governments and companies everywhere are committing to ambitious carbon reduction goals. The Climate Policy Initiative, a San Francisco–based think tank, estimates that the world invested $632 billion in addressing climate change in 2019–20, far short of the $4.5–$5 trillion it says is needed annually to achieve net zero carbon emissions by 2050. It starts with recognizing that the world’s insufficient response to our energy crisis is not a failure of technology-it’s a failure of funding. They are locally sourced and can function at wide ranges of scale.īut what does decentralized energy have to do with decentralized finance? Renewables such as solar, geothermal, and wind-or the recycling of waste heat and energy-are the answer. We desperately need to decentralize our energy model. Vulnerability to outside events-which electricity system designers describe as a lack of “redundancy”-is as good a reason as any to advocate for renewable energy in response to the climate crisis. And one more: 2017’s Hurricane Maria, which after knocking down a few high-voltage transmission lines, left 90 percent of Puerto Ricans deprived of power for months. Or last year’s shutdown of the Colonial pipeline, when ransom-demanding hackers exploited the fact that 60 million people depend on the pipeline’s gasoline.

That world leaders must cater to the interests of a sole unelected human being to solve an economic crisis that affects all 8 billion of us is the epitome of a centralization problem.Īnother stark example: Germany’s dependence on Russian natural gas, which constrains its capacity to impose sanctions on the Kremlin.

One area to focus on is the highly centralized energy industry.Ĭonsider the negotiations with Saudi Crown Prince Mohammed bin Salman to boost oil production and combat soaring global prices in the aftermath of Russia’s invasion of Ukraine. But there’s also an urgent need for the stewards of the global economy to explore DeFi and crypto solutions to its many problems. If they are to attain mainstream adoption, DeFi and crypto must integrate some of the regulatory and self-regulatory practices that have brought functional stability to TradFi. The reality is, both sides need each other.

We have the highest inflation in 40 years, a war that’s fractured the international monetary system, an energy and commodity crisis sowing famine and political unrest, and record temperatures exposing a massive shortfall in investment to fight climate change. Tokens like bitcoin and Ethereum’s ether have lost three-quarters of their value while major crypto lending and investing firms have collapsed into bankruptcy.īut to be fair, it’s also pretty wintry in traditional finance-or TradFi, as the crypto and DeFi (decentralized finance) community refers to the financial and economic old guard. The cryptocurrency industry is in the throes of a crypto winter. Decentralized and traditional finance can thrive in tandem to fund renewable energy and other pressing needs, but only with clear standards and rules