Blockchain technology has strong associations with the new industrial revolution and the Industry 4.0 movement. But while most blockchain-related hype focuses on profit-driven industries, humanitarian and social causes also stand to benefit.
This decentralized technology could help disadvantaged people prove their identity and settle land ownership disputes. It could even revolutionize agriculture and help eliminate human rights violations in international trade.
The huge potential of blockchain for good
According to Usinger, blockchain could help a wide range of social projects achieve their goals. However, it could be some time until we start seeing concrete results.
“Blockchain for social good is still in its early days,” Usinger told Coined Times. “Some start-ups are developing solutions to make donations more transparent and trackable, help to verify actions, and build solutions for unbanked people that do not have access to traditional services.”
In all these cases (and many more) blockchain and cryptocurrencies, if implemented right, can be a solution.
Hatch CoLab is an incubation and acceleration service for social entrepreneurs. Usinger and her colleagues help clients develop their business plan and get started in competitive markets.
At the moment, Usinger said she sees blockchain as a great potential tool for helping entrepreneurs, but added that there’s a long way to go before mainstream markets start accepting the technology.
“There is a huge gap to bridge between blockchain activists and traditional aid organizations, NGOs, and governments,” Usinger said. “But I believe solutions that will help change the world for the better will emerge.”
Does blockchain’s environmental footprint outweigh its advantages?
Unfortunately, blockchain isn’t perfect. While the technology solves a host of problems, it also consumes a huge amount of energy in certain cases.
Bitcoin mining is the most pertinent example of this. Currently, BTC mining consumes more energy than Iraq, a country of more than 38 million people. Environmental scientist Dr. Jonathan Foley recently said that, from an environmental perspective, the best use of blockchain would be to shut down the network altogether.
However, comments like Foley’s fail to distinguish between public and private ledgers. While it’s true that large decentralized blockchains like BTC require huge amounts of energy, a social entrepreneur’s private blockchain wouldn’t necessarily consume more power than a standard server.
The importance of building trust
Above all else, charities and NGOs need to be trustworthy. In 2018, a series of scandals caused public trust in charities to drop to its lowest level since 2005.
Blockchain could solve transparency issues and help charitable organizations regain trust. Now, major bodies such as the UN, the EU, and the World Economic Forum have started paying attention to technology.
That said, start-ups and entrepreneurs are leading the charge in trying to change the world with blockchain. And, as Usinger pointed out, blockchain is just an enabler for change; it’s the innovative people who put this technology to use who can really make an impact.
“It is just important to realize that, in the end, blockchain is just a tool to solve a problem,” she said. “Developers and blockchain experts need to keep this in mind when developing solutions.”