Blockchain Technologies: Potential Use of Cryptographic Protocol in Financing Forests Conservation Stewardship

Environmental markets that consider trade-offs of benefits flow and conservation burdens among economic units contributes to the sustainability of natural resource capital. Despite the benefits of environmental markets, the existence of bureaucratic processes in ecosystem financing such as Payment for Environmental Services creates a perverse market structure, which impedes the efforts of internalising environmental costs through distributional effects of conservation rewards and burdens among economic units. Therefore, this paper explores the applicability of using cryptographic protocols in blockchain technologies as a paradigm shift in financing conservation stewardship at the micro-level. Secondary data from documented literature was used as the source of information in this study. Systematic searches on different websites were used to identify relevant scientific papers, journals, abstracts, reports and presentations that resonated with the theme of this study. To gain hands-on information regarding blockchain technologies, the snowballing research design was used to identify individuals with technological know-how on the functionality and blockchain operability. Blockchain technologies can be merited because it portrays a high degree of transparency and trustworthiness among economic units when used in environmental markets. Therefore, designing a robust cryptographic protocol that facilitates efficient trade-offs of conservation rewards and burdens in present environmental market creates incentives for the resource conservation and protection.