Blockchain enthusiasts expect that this new technology, which makes transactions traceable and safe, will disrupt the world as we know it, empowering people to bypass banks and other centralized institutions. And social entrepreneurs are looking to blockchain for solutions to societal ills, from poverty to health risks to climate change. How much positive impact can blockchain bring? How realistic is it to scale the technology? Stanford's Graduate School of Business published a study digging into blockchain's impact, and potential, in different sectors.
The researchers analyzed 193 blockchain projects that aim to drive social impact, in the areas of agriculture, democracy and governance, digital identity, energy, climate and environment, financial inclusion, health, land rights, philanthropy, education, human rights and water. They found that while most of the initiatives are early stage and need time before they have significant impact, there is potential. "It may be too early to tell how prolific the growth and adoption of blockchain applications for social impact will be," concludes the study, completed in April 2018, "but our initial catalog and analysis showed that beyond the hype, potentially transformative blockchain applications for social impact are already emerging."
One company the report cites is SOLshare, a company working in Bangladesh to bring solar energy to remote regions. SOLshare "creates a small local energy grid that allows these households to produce and trade electricity with each other, without having to rely on local utility companies," says the report. "Their product, SOLBox, is a device that enables homeowners to buy electricity as needed by paying for tokens via mobile phone SMS. Customers can finance this investment through micro-credits, with repayments of 24- to 36-months. Blockchain technology allows the decentralized trade of energy and payments, shifting power to local households, which are getting affordable access to clean energy, with the increased benefit of becoming micro-producers and potentially having a new source of income."
Another example is BanQu, an app being used by farmers, workers and micro businesses without bank accounts in poor regions, to record financial transactions and "prove their existence in global supply chains." Blockchain can help make transactions secure, give users control over who can access their data, and provide a digital identity to people that don't have one, such as refugees or migrant workers. This can bring new financial players into the global economy.
Blockchain is often suggested as a way of tracing supply chains. Grassroots, an Arkansas food cooperative, uses blockchain to help farmers and customers. "Now, when consumers are making their purchasing choices at the grocery store, they can simply scan the barcode with their phones to learn the full journey of the chicken they're buying from Grassroots, with the assurance that nothing has been fabricated or tampered with," says the Stanford report.
Walmart made headlines when it announced it would require farmers to input data on romaine lettuce, spinach and other leafy greens into an IBM blockchain database. This will be particularly useful to isolate, for example, an e-coli outbreak, limiting financial damage to the retailer. And the World Wildlife Fund's Australian arm has announced it is developing a blockchain platform, called OpenSC, to track the environmental and social sustainability of food.
In 2018 Coca-Cola and the US State Department announced that they were collaborating to set up a blockchain registry for workers to help fight forced labor. Levi Strauss has announced an initiative to survey workers on labor conditions in factories, using blockchain to secure the results from any data manipulation.
Tracing the sources of products and their materials is one of the most important challenges today. Companies want to know that the products moving through their supply chains were not fabricated using slave labor, do not bring health hazards, and have not contributed to deforestation or other environmental harm. As companies struggle to map supply chains of enormous complexity, smartphone technology and ultimately blockchain will be useful tools.
The Stanford report also notes that blockchain can help distribute aid and track impacts of philanthopic giving.
To accelerate the use of blockchain for social good, an organization called the Blockchain Trust Accelerator, with a grant from philanthropist Social Alpha Foundation, is building the Impact Ledger, an online registry to track projects and their impact. I spoke with Nydia Zhang, a Hong Kong-based founder of the Social Alpha Foundation, and got a taste of the passion that is igniting some of the pioneers in blockchain technology who want to change the world. Zhang looks at big systems and their impacts, such as whether the crops in a country are diversified enough to provide a healthy diet to citizens, and thinks about how governments could incentivize new crops through token rewards distributed on a blockchain. To explain what she means, she says we might one day be earning tokens for healthy or good behavior, such as running a 10k or recycling plastic, and we'd be able to spend our tokens on, say, a cup of coffee, or travel.
The way Zhang sees the world, we all share a common resource pool, and it's finite. Blockchains can help us navigate the complexity of that by directing incentives and making human behavior more efficient. At the same time, as in the case of digital identity, blockchain technology can empower people who were previously outcasts, unbanked and unrepresented. It's about, says Zhang, "how to design an ecosystem where everyone is treated fairly." It's about creating a more just and inclusive world.