Ranchi Mall Dharavi Blockchain Contract is a concept contract created as part of the Tedx talk given by Mr. Rohit Tripathy, Founder of Ranchi Mall on 11 March 2018 at Tedx Dharavi. The aim of this Contract is to enable the audience and the people of Dharavi to get started on the blockchain. Blockchain provides a new means of organising businesses and enterprises.
What is a Blockchain Contract?
Exciting things are happening in the business world due to the emergence of blockchain technology. Blockchain opens up possibilities for a new, collaborative and individually empowering means of doing business without borders and without the need for regulatory organisations or other intermediaries.
Blockchain empowers people in two ways that have up to now not existed — a) the ability to legitimize innovation and new products without seeking approval from governments and b) the ability to create financial assets out of non-profit based transactions. If a cause has followers, it can be funded very easily on blockchain in ways which are normally unfundable in a government-based legal regime. For instance, on blockchain, ten people could create their own bank without seeking a license from the government. In a central bank dominated banking system, a bank cannot exist unless approved by the central bank. Another new possibility, a financial asset can be created out of a social cause and the gains from that financial asset can be designated to fund that social cause as long as enough people support the cause. In a non-blockchain world, only donations and charities can fund a social cause whereas in the blockchain world a social cause can be funded by profit-seeking behaviour in addition to donations and charity.
A blockchain is of no use until it can get people to cooperate toward a common cause. That common cause has to be expressed in terms of obligations and benefits of all parties involved in the cause. Obligations are what the parties perform and benefits are what the parties gain as a result of their performance. Blockchain Contracts are an expression of obligations and benefits of all parties involved, as written on the blockchain. Another way of looking at it is that blockchain is a technology and a Blockchain Contract is the human application of that technology. Blockchains are useless without Blockchain Contracts. Human innovation in blockchain is at most a technological innovation, but human innovation in Blockchain Contracts is a social innovation which can transform human lives. When we speak about blockchains being revolutionary, it is the Blockchain Contracts, rather than blockchains themselves which are the cause of the revolutionary transformation. That is the reason why focusing on Blockchain Contracts rather than blockchains would yield greater dividends for mankind. This is why Blockchain Contracts are the core pillar of Ranchi Mall’s efforts and innovations.
The current way of putting business agreements onto the blockchain is called a smart contract for which all the decisions, once coded by the contract creators, are automatically implemented by software. Blockchain Contracts, on the other hand, assign a primary role to human judgment in blockchain-based contract decisions. Human judgments are superior to machine judgments in matters of unexpected events that can occur during the course of a contract. As a result, Blockchain Contracts perform much better than Smart Contracts in real world scenarios where uncertainties exist.
The emergence of blockchain technology has paved the way to redefine all economic relationships, some of which will have social impact. Blockchain is an internet space where interested individuals from all over the world can agree upon a course of action and then fund it. The funding is done primarily with the interest of having higher future valuations to their financial interests. The financial interests of each of the involved parties is tradable in the group. This tradability creates the economic value behind the blockchain contract. Since the space of collaboration is not limited to a country, the overall financial might of blockchain contracts can be greater than economic mights of countries.
Details of the Dharavi Blockchain Contract
The Dharavi Blockchain Contract will create a financial asset out of the economic activities in Dharavi, one of the largest urban slums in the world, located in Mumbai, India. Dharavi has a population of around 1 million people living in a small area of around 535 acres. It has multi-ethnic inhabitants with economic migrants from all over India calling it home. Most of the inhabitants work outside in the city in different formal and informal sectors of Mumbai. But Dharavi has evolved its own eco-system which includes leather, embroidery, textiles, pottery, small gems, jewellery, and recycling activities. There are roughly 5000 businesses and 15,000 single-room factories in Dharavi. The total turnover is estimated to be around $700m USD.
Ranchi Mall Dharavi Blockchain Contract will have separate sub-tracks for each of the industries. It will tokenise one million units to be priced at $1 USD each. The amount raised will be spent on promoting economic infrastructure through marketing, developing accessibility to domestic and international markets, technology training and, upgradation of the economic infrastructure of the slum. The funds will be allocated specifically to the Dharavi-based enterprises that participate in the Blockchain Contract. Each of the participating entities will convert their customer-base into investors. The participating entities that do this most elegantly will be eligible to receive the funding raised by the token sale. The customers of these entities will be able to purchase their products at normal prices and will also receive tokenised units of the blockchain contracts after a time limit of two months (the time between ordering and receipt of the product). Time is money. Time is ‘faster money’ on blockchains. The two-month delay between receipt of customer money and delivery of the goods will create the base for valuation of the Blockchain Contract. As this Blockchain Contract gains acceptability and renown in Dharavi and in interested communities world-wide, the valuation will increase and, after a period of time, the customer-investors will have an economic asset in addition to the products they purchase. The funds raised by direct token will be used to upgrade the quality of participating enterprises in Dharavi and, as they gain more customers, it will create an upward push in the valuation of the tokens. This will trigger a positive feedback loop that will increase the valuation of the units of the Blockchain Contracts until all enterprises have achieved their optimal level of business upgradation.
The Blockchain Contract will be executed on the FLO Blockchain. The units of the Blockchain Contract will be done on a platform facilitated by Ranchi Mall.
The entities interacting in this Blockchain Contract are: Dharavi-based enterprises, their customers, members of the Tedx Dharavi community where the idea will be presented and who are interested in taking the idea forward into execution, the FLO eco-system will provide blockchain services, Ranchi Mall will organise the Blockchain Contract and, any investor from around the globe who has an interest in this Blockchain Contract and its cause. The interaction as described above has been designed in such a way that it creates a win-win relationship if the businesses in Dharavi do better as a result of this Blockchain Contract. It creates a foundation on which there is self-interest for all parties to ensure that the social cause for which this Blockchain Contract has been organised — economic upliftment of the people of Dharavi — will get a fair chance to succeed.*
*This Blockchain Contract is in an experimental phase and will be finalised as it goes into execution.