Enabling end-to-end digital carbon emission tracing with shielded NFTs

Abstract

In the energy transition, there is an urgent need for decreasing overall carbon emissions. Against this background, the purposeful and verifiable tracing of emissions in the energy system is a crucial key element for promoting the deep decarbonization towards a net zero emission economy with a market-based approach. Such an effective tracing system requires end-to-end information flows that link carbon sources and sinks while keeping end consumers’ and businesses’ sensitive data confidential. In this paper, we illustrate how non-fungible tokens with fractional ownership can help to enable such a system, and how zero-knowledge proofs can address the related privacy issues associated with the fine-granular recording of stakeholders’ emission data. Thus, we contribute to designing a carbon emission tracing system that satisfies verifiability, distinguishability, fractional ownership, and privacy requirements. We implement a proof-of-concept for our approach and discuss its advantages compared to alternative centralized or decentralized architectures that have been proposed in the past. Based on a technical, data privacy, and economic analysis, we conclude that our approach is a more suitable technical backbone for end-to-end digital carbon emission tracing than previously suggested solutions.

Probably something: a multi-layer taxonomy of non-fungible tokens

“…Unshielded NFTs disclose all information associated with the respective token. Shielded NFTs allow numerous attributes to be concealed despite the inherent transparency of blockchains, including ownership relations and transaction history (Babel et al, 2022). Shielded NFTs are typically implemented with zero-knowledge proofs, which allow the verification of concealed attributes without revealing them (Barbereau et al, 2022;Sedlmeir et al, 2022).…”

“…Unshielded NFTs disclose all information associated with the respective token. Shielded NFTs allow numerous attributes to be concealed despite the inherent transparency of blockchains, including ownership relations and transaction history (Babel et al. , 2022).…”

The rise in popularity of central bank digital currencies. A systematic review

“…When tracing emissions, operators need to have an end-to-end data flow in place connecting carbon sources and sinks, while ensuring the data protection of end users and companies at the same time. This can result in developing a tracing system for carbon emissions that complies with data quality and protection standards, such as verifiability, distinguishability, fractional ownership, and privacy [ 113 ].…”

Reputation-Based Blockchain for Spatial Crowdsourcing in Vehicular Networks

“…Based on distributed ledger technology, blockchain adoption can ensure that transactions cannot be tampered or forged, an especially important consideration behind its successful application in digital economics. Blockchain provides a feasible solution for distributed edge computing deployment scenarios, e.g., Vehicular Networks [8], Drone Networks [9], Non-Fungible Tokens (NFTs) [10]. Blockchain technology can realize the distributed deployment of application services without intermediaries, so that individuals who lack trust can interact in a safe and credible manner.…”

“…Based on ( 7)- (9), the incentive optimization problem can be formulated as a noncooperation game model and solved via the convex method (as studied in our previous work in [36]). Next, we will raise the probability of honest mining by improving the occupation of high-reputation miners, to increase the probability of being rewarded.…”