A block chain or Blockchain is a distributed database that maintains a continuously growing list of data records that are hardened against tampering and revision, even by operators of the data store's nodes.
One can view a Blockchain as a public ledger of all transactions that have ever been executed. It is constantly growing as completed blocks are added to previous blocks forming a chain. Importantly, blocks are added to the Blockchain in a linear, chronological order.
Each miner gets a copy of the Blockchain when joining the Bitcoin network. The Blockchain they receive has complete and accurate information about the addresses and their balances right from the genesis block to the most recently completed block.
Imagine a technology that could:
Improve the graduation rates of Nigerian girls by automatically generating cash payments to families when their daughter achieves a 90% attendance rate.
Enable a musician to automatically donate 50% of royalties from a specific song to their charity of choice.
Coordinate what resources (financial, medical, etc.) have already been provided to a refugee by a variety of aid organizations that have historically not been able to 'compare notes' in this way.
Help homeowners conserve electricity with a ‘smart’ refrigerator and then automatically donate the money saved to charity.
These are all increasingly possible thanks to the emergence of blockchain technology. While still in the ‘early adopter’ phase, blockchain has huge potential for social impact programs around the globe.
With blockchain, we can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision.
In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. Intermediaries like lawyers, brokers, and bankers might no longer be necessary.
Individuals, organizations, machines, and algorithms would freely transact and interact with one another with little friction. This is the immense potential of blockchain.
While the world awakens to the phenomenon of Bitcoin and crypto currencies, widespread awareness is yet to uncover the potential of the underlying technology – a peer-to-peer, decentralised, distributed ledger known as the blockchain.
Depending on your sector, your company may already be watching or experimenting with technologies like blockchain and bitcoin, but this is one advance you’re going to need to understand if you plan to be involved in 21 century social impact programs.
More than just a “trust-less” (eg not requiring the trust of other parties) means of securely and instantaneously sending currencies around the world at low cost, the blockchain (and technologies of its kind) allow a multitude of applications, such as peer-to-peer “smart contracts”, the creation of digital assets and data collection. It may also be the missing piece of the puzzle for the “Internet of Things”.
Whenever we hear of new tech, models and ideas we think about how it can be used to do good. So, how could the blockchain be applied to generate social impact?
- New fundraising strategies
Due to the highly divisible nature of crypto-currencies micro-donations become much more feasible. New fundraising strategies requesting fractional pledge amounts from larger pools, possibly collecting infinitesimal “ dust” divisions of coins from crypto exchanges. Charities could also creatively pair this with smart contracts for their donors such as, every time you purchase, 0.0000001 of a Bitcoin (or a purchase percentage of your choice) is transferred to your charity of choice.
- Direct access to funding for charities
Instantaneous transfer of currencies across borders to charitable organisations and emergency support will allow faster, more targeted response rates. Lower cost in transferring funds internationally could mean an overall increase in the funds sent to charities.
- International Identification
International, immutable forms of identification via the blockchain could assist verification of volunteers wishing to work for international charities. Instead of delays while Emergency Aid management process and ensure large numbers of volunteers are safe to work in disaster relief programs, they could instantaneously access verified work history records.
- Social impact investment
Social impact investment may be opened to a wider audience as private assets such as wind turbines and solar farms are listed for public ownership. Much like crowd funding but with the addition of smart contracts that could automatically and securely payout shareholder profits as they are created.
- More secure personal data
Citizens of the world will gain control of their personal information. Storing data securely and privately on distributed, decentralised apps which then, at their discretion, could instantaneously be transferred to financial institutions, insurance companies or health professionals.
Indeed, virtually everyone has heard the claim that blockchain will revolutionize business and redefine companies and economies. Although we share the enthusiasm for its potential, we worry about the hype. It’s not just security issues (such as the 2014 collapse of one bitcoin exchange and the more recent hacks of others) that concern us.
Our experience studying technological innovation tells us that if there’s to be a blockchain revolution, many barriers—technological, governance, organizational, and even societal—will have to fall. It would be a mistake to rush headlong into blockchain innovation without understanding how it is likely to take hold.
True blockchain-led transformation of business and government, we believe, is still many years away. That’s because blockchain is not a “disruptive” technology, which can attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly.
Blockchain is a foundational technology: It has the potential to create new foundations for our economic and social systems. But while the impact will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure. The process of adoption will be gradual and steady, not sudden, as waves of technological and institutional change gain momentum.
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