Using blockchain for development solutions

Everyone’s talking about blockchain. The shared database technology has been hailed as the next big thing, with many staking their reputations and personal fortunes on it. Claims have been made about its ability to help end poverty, fight crime and save lives, and even halt or reverse climate change.

Here in India, whilst cryptocurrencies have proliferated and dominated headlines, they recently hit a brick wall, as the 2018 Union budget categorically rejected them as legal tender. Yet, in the same speech, Union finance minister Arun Jaitley signalled strong support for other applications of blockchain. The technology also received rare endorsement from Prime Minister Narendra Modi in February.

The message seems clear: Cryptocurrencies are out, but blockchain is crucial for the future. Three key applications stand out.

The first is increasing trust and transparency in supply chains. The lack of visibility in supply chains has led to myriad issues, such as environmental damage, worker exploitation, staggering waste and product fraud. Customers and governments today demand more transparency from businesses, and blockchain can enable this, by recording data for price, location, quality and more, up and down the supply chain.

Enormous efficiency gains are possible: Akshaya Patra, which runs the world’s largest school lunch programme, is able to provide a million more meals per year after using blockchain to improve its service provision. Better tracking of complex supply chains can stimulate more sustainable and ethical practices. Being able to provide proof of origin and responsible management can lead to premiums, and the identification of shared challenges that need to be tackled collaboratively.

But there are concerns about the greater administrative burden and exploitation risk for smallholders. As businesses look to clean up supply chains, they need to collaborate to set up a governance model that guarantees protection and equity for all.

Second, blockchain can help to create a peer-to-peer sharing economy. Imagine an Uber-type service without Uber actually being involved. Could it mean more equitable pay or greater safety for riders if we’re all accountable to everyone? Implementing blockchain technology in the burgeoning shared economy, through elements like smart contracts, public digital identities and digital currency payments, could reduce the need for central regulation. This could fast-forward the creation of a more resilient, equitable peer-to-peer economy, in which middlemen and time lags have been expunged.

For example, Digital Asset Holdings is banking on blockchain to reduce the life cycle of a stock trade down to zero.