Tech for Good: The Social Impact of Blockchain.
A guest blog written by our good friends at LinkiLaw.
According to the World Economic Forum, over $1.4bn has been invested into blockchain technology since 2013. So far, the majority of that investment has been concentrated on the financial industry, in the form of bitcoin — who’s market capitalisation hit $96.7 billion last month! However, the social side of blockchain has not yet received the same level of attention. Despite that fact, the creation of technologies that can impact our lives are one of the most promising aspects of blockchain technology. Foundations such as Unicef and the World Bank are currently using blockchain systems to improve the transparency of aid, the protection of property, secure voting and environmental protection, among other areas.
Why Blockchain?
Blockchain is an independent digital database distributed across a network of computers. Through a system called ‘mining’, each transaction, such as money transfers, is stored on a block which is then added to the chain of verified transaction. The records held in each block are protected by cryptography making it impossible to remove or edit them. This chain is stored and updated on every computer participating in the blockchain. It features a central ‘peer-to-peer’ model where all transactions are handled by an intermediary which allows transactions to be processed directly from sender to recipient and securely identified with a digital signature.
By contrast, the current standard organisational model in society features banks, companies or government agencies entrusted with a ‘digital truth’. Digital records held by one source are volatile and corruptible, seeing as how changes are not recorded and can be hacked into. Blockchain has the power to change this structure and affect our everyday lives.
How has Blockchain been Revolutionising Social Processes?
- Transparency
Blockchain ledgers are open and can be seen by anyone, making the platform completely transparent. Shutting down any computer hardware will not lead to a loss of information. Benchoufi & Ravaud explained that transparency of clinical trials in the medical industry can be improved by incorporating blockchain in the process. Indeed, the technology would ensure traceability, prevent a reconstruction and allow a secure automation of clinical trials through smart contracts. This is because each transaction is timestamped and is therefore provable whilst remaining confidential.
International blockchain agency Alice is an exemplifies this system of transparency. The agency works on this system to incentivise charities and NGO’s to run transparent projects. They do this by using the blockchain to record the charity’s projects’ and inputting them as facts that live on in the chain. This also makes the project information available to the public and further increases its transparency.
The Ananas foundation is utilising blockchain technology to fight societal stigmas around ideologies, such as Islamophobia and Islamic extremism. Ananas is a platform enabling the digital mapping of contextual resources that represent the beliefs of various groups, be they political, religious or cultural.
The first project powered by Ananas is “The Living Quran”, which aims to collate all of the available resources on the Quran, the holy scripture of Muslims, in a structured manner. Communities can then choose the resources and individuals that best represent them, or sponsor the creation of new or enhanced resources.
Ananas is building on advanced, context-aware, databases, allowing artificial intelligence to help provide the right resource at the right time. Ananas have created a custom cryptocurrency designed to reward contributors to the platform and align a range of disparate groups, while maintaining full independence, transparency and verifiability. Creating verifiable information will also strengthen anti-Islamophobia by creating a secure network of information.
2. Accountability
Keeping track of land ownership has been a long-standing issue particularly in developing countries. It has been estimated that 70% of landowners do not a have a secure claim to their land. Documents of their ownership can be manipulated by the government, who can easily declare that their proof of ownership is fake. Developing a public blockchain means that all parties would have access to the correct information and can determine who owns what land. A blockchain ‘registry’ would put an end to the manipulation of documents once and for all. If someone wanted to manipulate the data they would have to alter all the computers attached to the chain and edit all of the blocks in that chain, as they store information in a timeline like structure. Thus, blockchains can protect any types of historical data by making the destruction of original documentation virtually impossible.
Dubai is in the process of developing a system that seeks to record all real estate contracts on a blockchain by 2020. This project has been framed as a way to boost the confidence of international real estate investors and to increase the welfare of tenants. Blockchain buzz is also present in the UK now, seen for instance in the government’s commitment to make HM Land Registry the “world’s leading land registry for speed, simplicity and an open approach to data“.
3. Security
Ironically, the technology often described as trustless in its concept is actually able to deliver a whole new kind of trust.
Two of blockchain’s main characteristics make it inherently secure: decentralisation and the removal of third parties. Many scenarios have been shown where removing third parties can be extremely valuable and effective. The CMO Primer For The Blockchain World, Jeremy Epstein claimed that“Any industry that is full of intermediaries has a lot of value lost along the transaction path, and lacks transparency and trust is an industry that is ripe for Blockchain-driven disruption.”
Legaltech offers many case studies in the removal of third parties. Smart contracts on blockchains can enforce contracts: Companies like Mycelia, have developed intelligent songs with smart contracts built in, which enable artists to sell directly to consumers without going through a label, financial intermediary, or technology company.
Estonia’s e-residency scheme is the epitome of blockchain technology used to address real-world problems. The government has partnered with bitnation to offer a blockchain service that allows individuals to electronically record their marriages, birth certificates, and business contracts, regardless of their residency. This is an example of a way individuals can access government services without intermediaries. Besides, thanks to the immutability of the blockchain the government records are secure.
In international aid, many companies act in nations where corruption is a real problem. Blockchain can find a way around this through smart contracts. This offers a significant advantage to social entrepreneurs in cases where finding a dependable third party is complicated.
The security potential of blockchain has also been implemented in the social sphere. The technology has been applied to international aid agencies, who have had long-standing issues with mismanagement, complex bureaucracy and fraud. Blockchain allows them to circumnavigate third parties like banking institutions to make their projects more efficient.
May 2017 was one of the first times that blockchain was applied to an aid campaign, in Syrian Refugee camp Azraq in Jordan. Refugees were given aid in the form of electronic vouchers which allowed them to receive their food. To do this they peered into an iris scanner which confirmed their identities and subsequently were delivered their aid. However, instead of receiving the World Food Programme’s funds via a bank it was coming directly through the (WFP). This was established thanks to an open sourced Ethereum based project called ‘Building blocks’. According to British Economist Lawrence Haddad Building blocks has reduced money management costs by 98%.
Conclusion
Blockchain technology is still on the rise and, so far, its supporters have argued that it could bring about a level of security that was previously unattainable. If a positive development continues, blockchain can help societies strive for more efficient and reliable services. This being said, the technology does not offer a fully rounded solution to address social changes. Regardless, the technology is definitely going to revolutionise how individuals and systems interact across sectors.
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