Why Social Impact Is Blockchain’s Most Important Use Case
Every new piece of technology is a tool.
And I believe that tools aren’t inherently good or bad. A knife can dice garlic, but it can also hurt someone.
It all depends on the person wielding it.
Blockchain is exciting because it is technology that lends itself to good uses.
It’s fundamentally bound to the notion of democratization through decentralization, which give it innate potential for social advancement and growth.
What bothers me most is talking to people from large corporations who think they’re going to own the blockchain. Yes, it’s possible to treat it just like any other system, with an owner and operator.
But that idea is fundamentally opposed to the original intent of the technology.
Tools like blockchain or AI will always be dangerous in the wrong hands.
Will people use blockchain for corruption at some point? Probably.
Will others use it to try to make the world a better place? I hope so.
It’s just a matter of gaining momentum and finding enough people who look forward to making a positive impact.
It’s not about commoditizing data.
My critique of some businesses looking to use blockchain is that they’re trying to commoditize data.
The premise of blockchain is that we can do away with data monopolies and the concept of owning data. We’re learning to see data more as a public utility for innovation.
Here’s an example:
There’s a company out of MIT called Proventus that’s gathering satellite data on the yield of certain crops.
The goal is to give farmers access to more credit, depending on their crop yield rather than their credit score. And they’re using blockchain because they’ll have a massive data store and marketplace for commodities and agricultural traders.
That’s something I’m seeing a lot of — business models built around selling data to investors, traders, or funds. Those are the ultimate customers.
And I’m not sure how well that jives with the goal of social impact.
It raises questions about how use cases are being chosen. Is it just because the data they collect is more valuable? Is that how we want to evaluate social impact?
I think we can do a better job of coming up with business models whose customers aren’t hedge funds.
Blockchain is more than a marketing angle.
There are always going to be people who see new technology as a way to make a quick buck.
And there are companies out there making dubious claims about how they’re going to use blockchain in a socially responsible way. These companies use social causes as marketing angles to get buy-in from investors or consumers — they never really follow through.
They’re more concerned with pulling on consumers heartstrings than actually helping people in need.
On the other hand, there are also plenty of companies out there that really do want to help, but need to create a sustainable business model.
For instance, I recently met a woman named Sandra Ro with UWINCorp(Unleashing the Wealth of Nations) who’s working to help rural farmers in Africa get real-time data on prices of commodities. With better data to back their business, they’ll be in a better position to sell their crops and trade on the markets.
Or, look at how the IXO Foundation has teamed up with UNICEF to track and verify attendance at pre-schools in South Africa. Once attendance is confirmed, the schools receive subsidies for underprivileged children.
There are companies out there who aren’t just giving lip service to the idea of using blockchain for social impact.
It’s just frustrating when I see people building systems that only benefit a small group of people, like the owners of a company. Everyone else is ripped off as their data is pillaged without any compensation.
The goal should be to use the power of an emerging technology to do something good, not create the next Black Mirror episode.
Blockchain is ideal for social change.
It’s up to us to use blockchain in a way that is positive and democratizing.
Because otherwise, we’re just going to end up replicating the same structures and data monopolies we have with the internet. And nothing will change.
Fortunately, there is plenty to be hopeful about.
Look at a firm like Union Square Ventures. They only invest in companies that use open blockchain networks. They don’t even acknowledge the premise of private, permissioned ledgers. Honestly, provided we can work together to scale open networks and include data privacy, I generally agree with that stance.
Blockchain is best used as a democratizing, leveling force for good and social change — not as a tool for people who only want to monopolize data.
It’s up to the people building the blockchains to bake that open network mentality into the technology. It’s up to people working on the protocols and use cases to stay true to the vision.
And it’s up to all of us to choose how we use this new technology — for personal gain or for social impact.
Thanks for reading!