With the new advances in Blockchain, it doesn’t come off as a surprise that it is innovating and improving almost all industries. Blockchain is essentially a distributed ledger that makes maintaining and transferring important data easier. Since it is a distributed ledger, it fuels the consensus model.
Smart contracts, which is one of the most important features of blockchain, ensure greater transparency. A smart contract is a piece of code that gets written into the blockchain, and different applications can reference these codes.
The use of hashes for storing important data makes it more immutable and safe. Instead of storing the complete data, a hash of the data is saved in the blockchain, which makes it less arduous. And its digital presence makes it more omnipresent as anybody around the world who has access to a device and internet can make use of the technology (Compliance with the national laws). This is just the surface of the advantages that blockchain offers.
The blockchain technology can potentially solve problems faced by the industries and also improve their operations and efficiencies. It entered the market through the financial sector with Bitcoin. Since then it has been successfully used for heavy fundraisings. Blockchain-based startups raised close to $4 billion through a process known as an “ICO” (initial coin offering). It is now spreading its roots in all the industries whilst making a social impact in certain sectors as well namely Agriculture, Democracy and Governance, Environment, Health, Philanthropy, Education, and more.
How do you trust a blockchain network?
It’s only human to be cautious and anxious while using new technology. But here are some reasons why blockchain deserves your trust.
- Transferability- Since it is a distributed ledger system, anybody who has access to the blockchain can trace and verify the transactions. This is very useful especially if you have to track funds of aids, NGOs, or financial institutions.
- Immutability- The blockchain technology runs on cryptographic hashing. Any change in the original data causes a subsequent change in the hash value. This makes it difficult for hackers to tamper the information stored in the blockchain.
- Eliminates middleman — With blockchain, there is no need for a central authority for scrutinizing the transactions due to the presence of smart contracts, this in many cases reduces counterparty risks and reduces administration cost.
- User identification- The blockchain technology can authenticate the identities of the users with a strong infrastructure and at lesser costs. This becomes useful with digital assets and underserved populations.
Blockchain Projects Creating a Social Impact
There are certain blockchain projects that are making social progress. They are trying to improve the already existing system of operations in some of the major industries. Let’s talk about these projects in relation to their respective industries.
AGRICULTURE
According to the World Health Organization, 1 in every 10 people dies of food contamination. It is estimated that $10–15 billion is the total cost of food contamination, by the Grocery Manufacturers Association. All these problems can be traced back to the inefficiencies of the food supply chain. A lot of wastage is incident to the number of intermediate steps, all of the records are maintained on paper, which makes the process bureaucratic and slow. This makes the system vulnerable to a lot of errors which causes increased costs for farmers. On average, a farmer earns just $2 every day, which raises serious questions on their survival.
The most obvious solution to this is to improve the supply chain by applying blockchain’s digital and immutable record-keeping system. This is not just beneficial to the producers, but the consumers can also keep track of the products and verify the origin and quality of the product. Moreover, with the immense levels of corruption, it is helpful to know the reason for the higher prices charged by the producers.
This technology can be applied to farms of all sizes to decrease food fraud and contamination, food tracking, compliance with the laws and policies, improved efficiencies.
Some of the projects who are consistently working to improve the agriculture sector include:
- AgriDigital is an Australian company that connects farmers and value chain actors. It is a cloud-based management system that enables the creation of a programmable asset or token to track physical goods. These records are made available to all the necessary third parties. In December 2016, AgriDigital conducted the first trial of their blockchain-based platform for the trade of a physical commodity
- Grassroot, an agricultural cooperative in Arkansas, has a longstanding commitment to creating as much transparency and traceability as possible, as well as direct connections between producers and consumers. It aims at increasing the farmers’ stand in the market. It was launched in 2017. Grassroots also hopes to link in smart contracts to facilitate efficient payment streams within the supply chain.
- Bext360 has developed a device that combines machine learning and artificial intelligence with blockchain to create a more efficient and transparent coffee supply chain, ensuring that farmers are paid fairly and immediately, while simultaneously helping consumers better understand where and how their coffee was produced. It just doesn’t help consumers to trace the produce but also lists prices at the source. The farmers that are involved in producing 80% of the world’s coffee yield, are paid shockingly less. Bext360 aims to reduce the exploitation of the farmers by the intermediaries by paying them fairly and immediately
Investments in blockchain for Agriculture are early stage. Most initiatives are less than two years old, and none are currently reaching more than 1,000 beneficiaries; 93% are either in concept stage or have started a small project. Another major obstacle that stands in the way of revolutionizing the agriculture sector is digital illiteracy amongst the farmers, as most of them are traditional in their ways. So it becomes necessary to spread awareness and build the necessary infrastructure to fuel the process.
GOVERNANCE AND DEMOCRACY
It is not new to have discrepancies in the voting and electoral systems of the government. The main problem and challenge in these systems is to trace and identify the voters and votes. The blockchain network can ensure both of these aspects. Distributed ledger technology can address many security and even logistical practices of government data exchange. Citizens’ data is harder to incorrectly or illegally erase or edit when it’s stored across blockchain-like networks, and these networks can prevent multiple agencies from having to repeatedly request an individual’s information. Some governments have voluntarily started using blockchain technology given its higher levels of security.
- e-Estonia is an initiative by the Estonian government that set the pace in 2001. It adapted the digital approach to maintain digital identity, facilitate e-government services, and improving voting infrastructure. 99% of these services are offered digitally by the government.
- Votem is another project that is still seeking a marketplace to employ a blockchain-based solution to issue and trace online votes cast by absentee voters.
ENERGY, CLIMATE, AND ENVIRONMENT
The environment sector contains a lot of efficiencies that can be solved by incorporating blockchain technology. It can improve the efficiency of existing grids, both for utilities and final consumers. With the world running out of its energy resources, it becomes crucial to optimizing the use of what’s left. The decentralized platform can fuel peer-to-peer transactions of energy and payments, supported by the creation of microgrids. Companies in the energy sector can have a significant impact on millions of users by improving the electric grid. The initiative is taken by these companies:
- Grid Singularity is initiating the transition to a new distributed energy utility system, where energy can be sourced and distributed in a decentralized, more efficient way. The company is creating a blockchain layer where all transactions will be securely stored. If implemented by more companies, it can effectively provide companies with top infrastructure and support.
- SOLbox is a device used by the people living in rural regions to buy and use energy as and when required by buying tokens via SMS. SOLshare aims to provide electricity in the remote regions of Bangladesh by using clean and reliable solar panels. It shifts power to local households through decentralized distribution and payment mechanisms.
These mechanisms and facilities highly depend on the availability of smartphones in the area, which is still a long road. The total exploitation of this technology highly depends on infrastructure development in these regions.
FINANCIAL INCLUSION
The financial market offers tremendous opportunities that still remain untapped because of a few loopholes. Given the size of the market and blockchain’s potential in delivering impact, there have been significant efforts to employ blockchain for financial inclusion. Some of the most pressing issues involved in offering access to the unbanked are solvable with the use of blockchain, including lowering transaction settlement time and costs, removing formal infrastructure requirements, and providing digital identity and property rights.
Blockchain can cross over the barriers that exist in the traditional banking and trading system by lowering administrating costs and transactional costs. It can allow real-time trading to investors around the world. Some companies/projects that are incorporating this technology in their services include:
- Mojaloop connects different ledgers including different wallets, national payments, and blockchains. It aims at achieving higher interoperability to provide a single platform for payment to end-users.
- WeTrust was founded in 2016 to significantly lower the costs of the third parties involved, like banks, for easier and more transparent transactions. Since it has a global reach due to digitization and the distributed ledger system, it plans to build the additional infrastructure and optimize its use.
- BanQu aims to help the 2 billion people who do not have exposure to full economies because they are unbanked. The platform records economic and financial transactions, purchases and goods, and proves their existence in global supply chains.
The blockchain technology is still in its early ages of development due to the resistance of the regulators and incumbents. While it does solve a lot of transactional problems, the scale of operation is still underdeveloped.
PHILANTHROPY AND AID
Billions of dollars are donated to charity every year, and this number is expected to increase in the coming decades. However, the funds often don’t reach where they were intended. This happens because the get digressed in the process. As of now, after the amount is donated by the donor, there is no legitimate tracking of the funds after they leave the donor’s account. There is minimal transparency. Blockchain offers a promising solution to help increase funding levels and effectiveness by addressing some of the key issues in philanthropy and aid such as transparency, costs and inefficiency, and new vehicles for capital. It also is providing emerging models for new sources of revenue and fundraising.
- Ixo Foundation is a Swiss-based nonprofit that is building an opensource blockchain protocol for the impact economy. Its Project Amply helps to record the attendance of students online and use this data further. More than 55,000 are a part of this project,
- Disberse aims to reimburse the inefficiencies related to the lack of transparency that leads to the exploitation of the funds, that are donated to the developing countries. It helps all the parties involved to track the funds from the donor to the beneficiary. The first project conducted in association with a UK based fund, Positive Women, help fund the education of three women in the year 2017.
A significant barrier to wide-scale adoption is that introducing a new technology does not solve for the local economic and political forces that often impede the effectiveness and transparency of aid or philanthropic initiatives. In order for blockchain to be a transformative solution, collaboration and open dialogue are required across borders and sectors to develop a sustainable and scalable solution.
HEALTH
There can be numerous digital initiatives in the health sector including but not limited to, digital health records exchange and pharmaceutical supply chain management. Realizing the full benefits of blockchain will require an unprecedented degree of coordination across players, including the agreement on a standardized transaction layer. Modum.io is one such project that provides easy monitoring of the drugs in transit that keeps a check on the temperature conditions of the contents in every packet.
Conclusion
These are just some industries that can potentially use/are using the advantages of blockchain technology. Still, there is high hesitance amongst industries and its players in incorporating it in its operations. There are a lot more sectors that blockchain can transform and revolutionize, but it depends on the current infrastructure and readiness to develop it to the required level.
