Balancing Innovation And Sustainability In The Digital Age

By Aqilliz  

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Innovation and sustainability

Now, more than ever, a new generation of eco-conscious consumers are demanding more from brands, from greater transparency surrounding their energy expenditure to how they’re equally giving back to mitigate their environmental impact. While you might assume that such concerns are predominantly limited to traditional ‘waste generating’ industries, it’s time to think otherwise.

The truth is, while we may have switched from manual operations, paper records, and the like, we’re still generating other forms of waste — and it’s digital. As we generate more and more data each day, we’ve amassed a significant digital footprint over time, due to the server space and of course, energy, required to power our online interactions.

One such technology that has come under scrutiny as of late is blockchain as the energy expenditure of the Bitcoin network skyrocketed amid rising prices and fellow smart contract platform Ethereum saw staggering growth amid the booming popularity of NFTs. At Aqilliz, our approach to leveraging blockchain is intrinsic to our tech stack, providing the infrastructure on which transparency and data accountability can be ensured. So what does this mean for us?

Back to basics

Before we unpack the implications, let’s briefly return to what blockchain is and the role that it plays within the Aqilliz tech stack. As we described in an earlier blog post, you can think of blockchain as a Google Sheet where you can view the entire history of the document — from the changes that have been made to date, who made them, up to the moment when the document was first created, as well as who has access to the document, to begin with. It’s a distributed, shared ledger of transactions.

This matters for several reasons: consider the amount of time reconciling all of the different data points associated with a single campaign, the reliance on third parties, and by extension, the resulting costs incurred. Blockchain can generate significant cost-savings and efficiencies by automating this process across a transparent ledger combined with self-encoded smart contracts that only execute when pre-conditions are met. This is something we saw in a pilot that we did with a leading FMCG company in the Middle East — a 15 percent efficiency uplift when compared with a traditional campaign.

Next, consider the transparency and what that means for ensuring brand safety and accountability — recording all the instances in which data points have been used, for what purpose, and for what length of time. As an immutable ledger, blockchain can record these instances in such a way that assures that the data is tamper-proof for auditing requirements. This is critical to data compliance requirements stipulated by the General Data Protection Regulation (GDPR) and we can expect our data protection frameworks to demand the same over time.

Automating efficiency

When it comes to blockchain on Aqilliz, our approach is distinguished by the use of a hybrid ledger as part of our patented technological infrastructure — one that can leverage the best of what private and permissionless blockchains have to offer. This hybrid blockchain combines the security and scalability of a private blockchain paired with the accountability and decentralisation of a public blockchain. The pairing of Atom — consisting of our private blockchain Aquila alongside our public blockchain partner Zilliqa — allows us to address the challenges of security, scalability, and speed, while simultaneously serving businesses in need of privacy-compliant solutions.

Aquila is built as a layer-2 solution — a separate private blockchain — on top of the Zilliqa blockchain. As a layer-2 solution, transactions are instead taking place on Aquila, thus mitigating the risk of congestion and resulting potentially high transaction fees (otherwise known as ‘gas fees’ on the network) on a public blockchain such as Zilliqa. These fees can vary depending on the blockchain in question and the amount of activity on the network at a given time. This year alone, platforms such as Ethereum saw transaction fees as high as US$60, pointing to the extent to which layer-2 solutions are critical to ensuring that applications that leverage the network can continue to operate in such a way that’s cost-effective for users. In contrast, gas fees on Zilliqa tend to average at around US$0.004 — think of what additional cost-savings there are when paired with a layer-2 solution such as Aquila.

Aside from costs, layer-2 solutions help to allow transactions to take place at scale without being burdened by congestion. Instant transaction confirmations and processing allow for more transactions to be processed at a given time which is critical in the digital marketing ecosystem wherein hundreds and thousands of impressions might need to be filtered, analysed, and assessed at a given point in time. This, compounded with the fact that data within the Atom ecosystem is only kept to the layer-2 chain, allows us to ensure that sensitive personal data is kept within a closed, private environment.

The elephant in the room

When it comes to sustainability, some blockchains have certainly come a long way in moving away from the computationally-intensive Proof-of-Work (PoW) consensus mechanism used in the Bitcoin core network that you’ve probably heard about as of late. Approaches such as Proof-of-Stake offer promising alternatives but then run the risk of different concerns pertaining to adequate decentralisation. Zilliqa, on the other hand, leverages a different approach known as practical Byzantine Fault Tolerance (pBFT) combined with PoW as a security mechanism. In this approach, miners (or the users helping to power the protocol) are able to ‘dual-mine’ two different networks, allowing them to maximise their energy expenditure.

From a layer-2 perspective, a more ‘eco-friendly’ network is also another plus point. Remember that congestion we were talking about? Rather than transactions taking place on a public blockchain, diverting this activity to the layer-2 level means that these transactions no longer feed into the energy-intensive consensus process on the public blockchain. Instead, only records of the transactions taking place (rather than the transactions themselves) are recorded on the public blockchain.

A delicate balance

As we look to the future, sustainability will continue to occupy boardroom discussions and be top of mind for consumers looking for more accountability from brands that they support. While the conveniences that technologies stand to offer can be great, there’s a delicate balance at play in which innovation shouldn’t ultimately counter efforts at a more sustainable way of doing business. While very much in its infancy, blockchain has had to face its reckoning this year to finally address the energy quandary, and many projects — Aqilliz included — are making meaningful moves in seeking out alternative methods to offer a more sustainable approach.

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