After a few years of exuberance and hype around the potential of blockchain technology, we are now into a more sober phase. The madness around has thankfully gone away and we are back where we should be: thinking about problems and opportunities, putting our heads down and building stuff. Doing our part to prepare the infrastructure for the brave new world.
In that sense, Proof of Impact is not a blockchain company. We are an impact company. Yes we use blockchain technology for our platform, but we don’t spend a lot of time speaking about blockchain, and we definitely don’t work our way back from technology to problem.
Rather, we are zeroing in on real world problems and work our way back from there. In the process, we rely on technology and tech tools to build our products. Blockchain is nothing but such a technology.
What problems are we trying to solve?
The main problem is the unmet need among impact funders (donors, investors, payers) to quickly see the direct impact of their contributions. Impact implementation is a black box.
To address this root problem, we record unique, individual events on a public ledger. That means that each time a child is vaccinated there is a new entry on the ledger. Every time a TB case is treated or a pound of plastic is taken out of the environment, there are corresponding entries recorded in the ledger.
These are all unique events and they all get entered into a ledger once, along with the characteristics that make them unique: location, timestamp, patient ID, product serial number etc.
Do we really need blockchain?
Verifying and recording unique events is awesome, but one could argue that this would be easier, cheaper and faster done in a standard database. We could store gazillions of events at trivial costs and querying the data base would be fast and precise.
Yet there is a big problem with centralized databases: They can be easily revised. This means that whoever controls the database can either modify the content (create spurious events) or they can duplicate events, leading to double attribution problem(this is also true for private blockchains, by the way).
But surely we can address these risks with checks and balances, audits, governance etc. After all there is a lot of critical data out there on which we rely every day that sits in centralized, well managed databases.
In fact, if our purpose would be simply to track these events, we probably wouldn’t need the headache of blockchain at all.
However, we’d miss a huge opportunity.
Global Impact Capital Markets
The moment an event has been entered into a blockchain ledger, a token can be issued for this event. This token can now be held privately or can be transferred, just like any asset. This is where the big opportunity lays and this is why Blockchain is so important to our model.
People can hold these tokens — essentially holding full attribution for unique events — without having to have any relationship with any organization or entity. As long as they prove token holding they prove attribution. This means that they can trade these tokens, essentially taking their money out and passing the attribution to someone else. And because these tokens sit on a public blockchain, they can trust that they are genuine and they can even track their history if trading on a secondary market. This will accelerate the emergence of a global impact capital market accessible to anyone, anywhere in the world.