Introduction to water scarcity
One of the biggest ironies of our time is that although more than two-thirds of the Earth’s surface is covered with water, barely 3% of that is actually freshwater that is fit for human consumption. Around two-thirds of that is tucked in frozen glaciers and are unavailable for our use.
Freshwater is, therefore, a scarce resource and increasingly under strain as population growth, pollution, climate change, and ineffective management all place strain on our freshwater sources. Around 2 billion people currently lack sufficient access to water and that number is expected to rise in the coming years.
Water scarcity is the lack of such fresh water resources to meet the standard water demand in the society. It is described as a condition where demand for natural hygienic water outstrips the available water supply.
Scarcity of water, when referred to in public domain, is not a concern with any individual living in a particular location at a particular time. Instead, it affects a larger population within a certain geographical region and pertains to larger timeframes such as months or years.
Water stress limits access to safe water for drinking and practising safe hygiene at home, schools, healthcare facilities and in other places. Moreover, when water is scarce, sewage systems can fail and the threat of contracting diseases goes up. Besides, scarce water also becomes expensive.
It is quite clear that globally available potable water is insufficient to meet the current and future population requirements and the world urgently requires more potable water in order to address the shortfall.
In order to address the pressing issue of water stress, H2O Securities has identified the need to form a new global, decentralised, self-sustaining ecosystem of consumers and water service providers to help solve the growing crisis.
With over 20 years of experience in finance and water management, H2O Securities has developed the H2O Water Network, an innovative solution that combines finance, infrastructure, expertise and interested participants in the deployment and operation of water plants through the use of blockchain technology, the H2ON token and smart contracts.
In other words, it is a platform where human needs meet cryptocurrency and environmental sustainability with global participation. H2O Securities has the global first-mover advantage in the digital tokenisation of water.
The H2ON token strategy was specifically designed as a currency to be used within a closed network focussed on producing drinkable or potable water globally. H2O Securities and the H2ON token enable a quicker deployment of water infrastructure and solutions through the use of its token strategy and blockchain technology.
The H2O Water Network water plants are connected via Internet of Things (IoT) to the blockchain and controlled by immutable smart contracts. The aim is to globally connect more people to drinkable or potable water faster and more effectively.
Why is the water problem so serious?
The sheer magnitude of the problem of water scarcity can be gauged from some of the following hard facts. Around two billion people – or almost one-third of the world’s population – face severe water scarcity for at least one months every year and over two billion people live in countries where water supply is inadequate.
According to UNICEF, half the world’s population could be living in areas facing water scarcity by as early as 2025 and some 700 million people could be displaced by intense water scarcity by 2030. Water stress is a growing crisis, which is not just affecting developing nations but the entire world, and water conflicts are already prevalent in many parts around the world.
In financial terms, the funding gap of more than US $18 trillion is too large for the public sector to address alone, while the bankability of projects is not always achievable. These factors further reduce the pace at which water infrastructure can be built.
The quality of cash flow streams in the global water infrastructure space varies significantly and is affected by risks typically associated with local regulatory environment, politics, local economic strength, technology, equipment and operations.
Besides, the ability to predict the exact environmental operating conditions for water infrastructure over a typical financing period of 15 years, is becoming increasingly difficult. These risks can create “dead” assets and are a major deterrent for mobilisation of institutional investment. In addition, a proven track record is a major stumbling block for traditional finance and consequently the adoption of new technologies.
What causes water scarcity?
Water scarcity or water stress can occur because of low water availability, as well as due to human activities, which degrade the available natural water. The natural water bodies have the potential to renew or restore their originality but water pollution aggravates water scarcity by degrading the quality of water resources.
As a result, water scarcity is common even in countries with adequate water resources. The reasons could be many – collapsed distribution infrastructure, contamination, conflict or poor management of water resources. Besides, overuse of water, drought, conflict and global warming also cause water scarcity.
Overuse of water – It is a huge issue that many people around the world are facing. Water may be overused on humans, animals, land and many other things. Some people even overuse water on recreational things without caring about its effects on the world around them.
Contamination – Pollution or contamination of water can be from anything such as oil spill from ships, industrial waste irresponsibly thrown into water bodies, animal carcasses and even chemical and faecal matters.
Conflict – Conflict over an area of land can also lead to water scarcity, if there is water located there, as it may be difficult to access the water. In worst-case scenarios, people could end up dying due to violence, if they try to access the water in such conflict areas.
Geography – Geography could also be one of the many reasons for water scarcity. There are a number of remote areas in the world that are not close to any water body and inhabitants of those places do not have easy access to proper sources of potable water.
Climate Change – Climate change is also leading to frequent droughts in different regions of the world that severely lower the groundwater level, thereby making it impossible for people to get water from fountains.
Global warming – Due to global warming, the average air temperature becomes warmer. The latter leads to faster evaporation of water from rivers and lakes, thereby contributing to the drying up of water bodies. As a result, people who rely significantly on those water bodies for drinking water, suffer from the consequences of global warming.
Natural Disasters – natural disasters such as tsunamis and floods also cause severe water shortages for the local population, since important public infrastructure may be destroyed. It may also collapse the local water supply completely.
Floods may also cause severe contamination of local water bodies, as large amounts of soil are moved and local rivers may no longer be suitable for drinking water purposes for a certain period of time.
Ageing Water Infrastructure – ageing water infrastructure brings with it a huge risk of failure as well as possible poor environmental compliance. Globally, water treatment infrastructure is aging and there has been a lack of consistent investment in the development of new infrastructure which results in economic water scarcity.
Ageing delivery networks further exacerbate the problem with burst pipes accounting for a loss of trillions of litres of clean water per year around the world.
Urbanization – rapid urbanisation of the global population has led to 55% of the world’s population living in towns and cities, with this number expected to rise in the coming decades. The rapid increase in the number of people living in cities has placed severe strain on existing water infrastructure and the lack of investment and slow pace of investment has created a serious challenge for countries globally to meet the growing demand.
The UN estimates that 156 million urbanites live without improved water sources and a further 700 million without improved sanitation all of which contributes to poor health conditions and heavy pollution loads on the cities wastewater.
How will H2O Securities solve the water scarcity problem?
The H2O Water Network is a closed loop ecosystem where a tokenised currency (H2ON) is used as a mechanism to reward participation in the network. It aims to lower the barriers to deploy more water infrastructure, quicker, globally and to unlock new sources and approaches to water production.
The average life-cycle of a water plant can range from five years to 30 years and is built in phases. Each of the phases require the direct participation of several multi-disciplinary teams, all of which form a “loose ecosystem”. Besides this, a plethora of indirect participation is also required including those of environmental consultants, upstream and downstream suppliers, legal experts, risk experts, chemists, trainers and many more.
Both the direct as well as indirect participants could be part of a closed loop such as the H2O Water Network. The latter will formalize and structure, in a decentralized autonomous manner, an otherwise loosely coupled informal ecosystem that currently exists.
The technology platform of the H2O Water Network has a hybrid architecture that contains both on-chain and off-chain elements. The daily collated water production data informs the H2O blockchain smart contracts via a chain link.
The purpose of this initiative is to increase water production globally. The solution will be available to private or corporate sectors as well as the public sectors and can be deployed during any stage of a project life cycle. The projects can be entirely new infrastructure, replaced or retrofitted infrastructure or enhancements or upgrades to existing infrastructure, subject to meeting the eligibility criteria.
H2O Securities has identified key global hotspots that will have the highest future needs for water. The main advantage of the H2O Water Network is that its network participants can globally participate directly in addressing the water crises in the focused regions.
It cannot be over-emphasised that clean drinking water is one of the most precious resources on the planet and the pressure on water resources is increasing in several parts of the world. The H2O Water Network and the H2ON token strategy is designed to address the problems that hitherto prevented rapid scalability and deployment of water infrastructure by broadening the participation of global partners.
By incorporating sophisticated blockchain smart contracts as part of the solution, a range of credit default risks such as transaction risk, currency risk, asset risk, concentration risk, political risk, environmental risk and operating risk can be appropriately managed and automated.
However, the challenges that sharding face are some of the reasons why many other crypto ventures opted for second layer scaling in contrast to protocol level, as it adds layers of complexity. However, that has not stopped researchers and public blockchains from working towards a realization of the full potential of sharding.
Hopefully, you have enjoyed today’s article. Thanks for reading! Have a fantastic day! Live from the Platinum Crypto Trading Floor.
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