# IBM and Veridium together to launch a crytocurrency on Stellar

On May 15th , IBM announced its partnership with Veridium Labs,a fintech start-up to launch a new token in the field of environmental protection on Stellar.

### 1."Carbon credit" and "carbon emission permits"

To understand how does the token function, we first need to introduce two concepts, “carbon credit”and “carbon emission permits”, which are released by Intergovernmental Panel on Climate Change (IPCC) to raise people or enterprises’awareness to reduce greenhouse gas emission by transferring the reduced emission and surplus emission quota into assets and allowing enterprises to trade in the carbon market.

In the carbon market, what governments do are first setting a cap on the greenhouse gas emission of heavily polluting enterprises, then confirming the amount of reduced emission from the other firms. Under this mechanism, to keep the emission under certain amount, the heavily polluting enterprises could whether reduce emission or, in most case, to get quota from other enterprises which has surplus quota or get “carbon credit”for having reduced emission.

Actually, this mechanism is supposed to function quiet well, for it somehow “ punishes” those heavily polluting enterprise by increasing its cost, albeit a small amount, and also rewards those perform well in environmental protection with profitable transactions.

However, the point is we have difficulties in calculating those credits. It was quiet complex. “The trouble is that more complex credits dont have a simple value like a stock, and there hasnt been a formula to determine their individual value.” said Roll Miller. Then, the new crytocurrency is created to fix the problem.

### 2.The IBM-Veridium-Stellar mechanism

Instead of empowering third-parties to confirm the data, the mechanism or system created by IBM, Veridium and Stellar blockchain, turns “carbon credit” into tokens that have value and allow enterprises to trade with each other on Stellar public blockchain. This makes the process more tangible and easier to account for.

What’s more, the system takes the advantage of blockchain technology to secure a safe, efficient, transparent transaction which prevents manipulation.

There, it seems we have been talking about the cryto-starup’s exploration in seeking cooperation with IBM or other giant enterprises. However, as for its own crytocurrency- Stellar lumen, it is not hot this weeks,except for the headline in the beginning of this week:Stellar (XLM) Hits Market Cap of $6.85 Billion However, I see course for hope. For according to stellar chart, the current market cap of Stellar is$6,240,599,594 USD ,a little bit lower than the \$6.85 billion mark, but it shows a upward trend and it is climbing slowly. Then as for the team, it never stop its exploration to spread the new technology into daily life, which proves its potential.

data from citicoin.com

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