Carbon markets, encompassing emission trading schemes (ETS) and carbon offset projects, are vital for climate change mitigation but face several challenges. Blockchain technology, central to the “3D’s concept” of decentralization, decarbonization, and digitalization, presents a potential solution for improving these markets. Blockchain has shown potential in household and transportation carbon offset projects, especially those linked to renewables. However, the technology faces hurdles such as increased costs, energy consumption, and transaction delays. To address these, improvements in blockchain architecture, integration of layer 2 technologies (Gupta et al. in Energy Policy 159:1081–1094, 2023; Patil and Kumar in Energy Econ. 91:121–133, 2024), and innovative regulatory frameworks are recommended. Additionally, a novel blockchain-based peer-to-peer platform for carbon trading could empower prosumers (Kolli in Blockchain Technology for Carbon Credit Management: Assessing Organizational and Cultural Implications, Charlottesville, VA, USA, 2023; Ahmed and Ahmad in J Clean Prod 345:1–12, 2024; Zhang et al. in Blockchain technology in carbon trading markets: Impacts, benefits, and challenges—A case study of the Shanghai Environment and Energy Exchange, Qingdao University, Qingdao, China, 2020) and enhance transparency, security, and efficiency in carbon markets. This platform aims to overcome limitations of current models by enabling direct transactions and incentivizing sustainable practices. Overall, while blockchain offers a promising framework for advancing carbon markets, further research and development are needed to address its current limitations and fully realize its potential.