I am a passionate believer in the power of blockchain technology, and I am often asked why. This is particularly due to the many misconceptions about this topic, confusing media coverage, several scandals, and over hyped cryptocurrencies.
Nonetheless, blockchain has enormous potential (which is largely still untapped!) to address some of the most challenging issues worldwide across society and many diﬀerent industries. It is this promise that I am truly excited about.
First let us begin with a quick Blockchain 101: Blockchain is an infrastructure, and one could compare it to a database in fact to make things really simple, but it has some superior features that make it much more powerful than just a normal database.
It is a distributed ledger and has no central authority. It is fully transparent, so one can follow through all transactions. It is immutable and one cannot change information retrospectively and corrupt the ecosystem through meddling with backend. Everything is completely traceable, which keeps all of the users fully accountable. It is cryptographically secured making it much safer. It has an ability to have smart contract logic encoded into it, which for instance allows for fast execution of documents and agreements without needing long processes. Finally, it has the ability to transfer value such as currencies, and Bitcoin is the best known example of this.
This combination of features make it a tool with which we can have unmatched results in theory, and develop solutions that even did not exist before. Some of the most pressing issues that blockchain technology can help address include:
Banking for unbanked
There are 1.7bn people who are unbanked, and 200m small to medium businesses. They do not meet current banking standards, ﬁnancial institutions are time consuming and services too expensive for the most vulnerable ones.
Cryptocurrencies can in fact provide a gateway to ﬁnancial services. It is as fast and easy as downloading cryptocurrencies wallets, which enable you to send and receive payments, be in control of your funds, and conduct transactions at much cheaper rates and faster across borders.
Another mind-boggling fact is that there are over a billion people who do not have the most basic of tools — a form of identiﬁcation. It is 1/7th of the world’s population that is totally excluded.
This is something truly integral to a functioning society and economy: a proper way to identify ourselves and our possessions, the ability to vote in the elections, own a property, open a bank account or ﬁnd an employment.
Blockchain helps us to move away from paper rich and centralised databases controlled by one NGO (HUH?), to a place where refugees for example, own the data and their identity would be accessible simply by logging into the blockchain, with all information encrypted and biometrically protected.
A McKinsey study reveals that reaching the unbanked population in ASEAN could increase the economic contribution of the region from $17 billion to $52 billion by 2030.
There are multiple problems with supply chains — there is a lack of transparency, issues around product authenticity and long timelines which are especially problematic when reacting to food contamination for example.
With blockchain technology, access to end-to-end traceability data would reveal the provenance, real-time location, and status of any product batch whose data has been uploaded. The eﬀect is that the scope and impact of a recall is massively reduced.
Products can be more accurately tracked as they move along diﬀerent stages/locations in their supply chain. There are several key beneﬁts:
- It gives stakeholders in supply chain management the capabilities to be able to isolate and tackle any potential problems.
- By enabling greater visibility over the entire supply chain operation, blockchain can generate key business intelligence that leads to better decision making and ultimately less waste.
- The end consumers can also beneﬁt signiﬁcantly from a blockchain enabled supply chain, as they would be able to verify the authenticity of purchased goods by use of the blockchain.
These are only some examples and real pressing global issues that need to be solved imminently. Blockchain technology can be used as a tool to help to address those problems. One must bear in mind though, that this is the potential of this technology and there is still a long way to go with regards to the maturity of the sector as we are only at the very early stages. Developers are still working on the underlying infrastructure that can be used for other applications. The next step will be encouraging adoption, which is another challenge, and so it will take time before we can see tangible fruits of this technology on a large scale. It is a truly exciting technology and its journey ahead will be interesting to observe so watch this space!
Global Shapers Warsaw Hub