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Consensus 2018 reveals blockchain’s social impact potential
As it moves from concept to practice, Blockchain’s uses abound, and its social impact potential was a major topic at CoinDesk’s Consensus 2018. Can blockchain be used for the greater good?
June 27, 2018
A blog post by Tiffany Ramsay, senior market insights analyst, Deloitte Services LP
Last month I attended CoinDesk’s Consensus 2018, which bills itself as the “largest blockchain gathering in the world.”1 The fourth annual conference and marquee event for New York City’s first-ever Blockchain Week2 shattered 2017’s attendance record, attracting more than 8,000 participants across a range of industries. From startups to enterprises to investors, seemingly everyone with any interest or stake in blockchain was in attendance—even James Bullard, president of the Federal Reserve Bank of St. Louis and Jack Dorsey, co-founder and CEO of Square. Deloitte also returned as the event's title sponsor for the third year in a row.
As most people familiar with the technology know by now, there is a seemingly infinite number of blockchain applications outside its original use in Bitcoin. In fact, Deloitte led the charge when the technology began to gain traction and was one of the first to demonstrate what blockchain could—and would—do beyond Bitcoin.
Consensus events of years past showcased blockchain as a proof of concept for some of these uses, but this year we finally got a peek at blockchain’s steady journey from idea to practice. Through various workshops, expert panels, and product demonstrations, I can confirm that many fascinating applications are already in play today, from the innocuous (crytpobeer3 from a blockchain vending machine, anyone?) to the head-scratching (I’m looking at you, CrytpoKitties4).
But what really caught my attention at the conference is the way blockchain is making a social impact. Consensus 2018 highlighted how a number of blockchain applications are transcending commercial use in pursuit of a greater good—particularly in helping those without access to the global financial system. Here are a few ways that blockchain is boosting financial inclusion and making an impact.
Consensus 2018 highlighted how a number of blockchain applications are transcending commercial use in pursuit of a greater good—particularly in helping those without access to the global financial system.
Blockchain and microfinance
Microfinance, the practice of offering small loans to low-income or unemployed individuals, has long been lauded as the cure-all to help the unbanked start businesses and alleviate poverty, but recent impact analyses show it often falls short.5 How, then, can we reach the population of the world that is unbanked?
According to the discussion at Consensus, Rewiring Trust: Enabling Enterprise Networks and a Token-Driven Economy, blockchain can help microfinance scale, bringing access to capital to more rural communities. Blockchain can add transparency, credit, payment, efficiency, and, most importantly, trust to microfinance. One example highlighted at the conference was IBM’s use of the HyperLedger6 blockchain in its microfinance pilot program in Kenya. It recently partnered with Twiga Foods, a food stall logistics platform, whose goal was to enable local vendors to expand distribution services. Microfinance seemed like the obvious solution, but problems with this approach soon arose because many of the vendors did not have a credit score.7 How could they receive a loan without credit? Fortunately, blockchain enabled vendors to establish a microcredit history through their mobile phones, which recorded purchases and payments. As a result, the program successfully issued more than 220 small loans to the vendors.
Blockchain and the tokenizing of plastic to reduce waste and end poverty
The world has produced more than 8 billion metric tons of plastic since its inception in the 1950s.8 Unfortunately, plastic is nonbiodegradable, and most of it turns to waste. Alarmingly, estimates suggest that more than 8 million metric tons of plastic waste end up in the ocean every year,9 and by 2050, the volume of plastic in the ocean is expected to exceed the volume of fish.10 In my opinion, to say that we are facing a huge problem with plastic waste is an understatement.
Remarkably, this is where blockchain can step in through the tokenizing of plastic. Plastic Bank, a nonprofit organization whose goal is to stop ocean plastic, monetize waste, and reduce poverty,11 has been actively working to create a blockchain rewards system that allows people in unbanked regions, like Haiti and the Philippines, to exchange plastic waste for digital tokens that then can be used as currency to buy food, water, and other goods. This rewards system essentially unlocks the value of plastic through blockchain, recycling waste and financially empowering those who would otherwise be left out of the system.
Blockchain and deep-tier finance
The challenges within supply-chain finance are well documented, but what’s often overlooked in the conversation is the financial exclusion of smaller players in the chain. Consensus’ Deep-Tier Finance discussion (featuring panelists from Santander, R3, IBM, and HCM Capital) delved into the issues that small and micro-suppliers face. Panelists explained that in the supply chain ecosystem, there is not always enough working capital for banks to lend, and thus, financing often goes to easily traceable tier one firms backed by large corporations because it is deemed as less risky. As a result, smaller enterprises in lower tiers often lack the capital to ensure continued operation.
The panelists noted that the increased trust and transparency that blockchain facilitates will allow transactions of smaller players currently outside the financial system to become more easily validated, leading to more opportunities to secure financing. Ultimately, blockchain can bring inclusion to the supply chain and enable the flow of more capital throughout the ecosystem—a win for all.
Blockchain’s impact on the greater good won’t be limited to these examples, and its use as a tool for social impact is just beginning, in my opinion. In fact, at the conference, there was already discussion of its application in ethical mining, food safety, and transparent donations. Of course, it’s unlikely that a single technology will ever solve all the world’s problems, but as it stands, I think blockchain is well positioned to make its mark on the world in ways we have yet to imagine.
What are your thoughts? Join the conversation on Twitter: @DeloitteFinSvcs.
1 About Coindesk - A Global Resource On Bitcoin And Digital Currencies. 2018. Coindesk. https://www.coindesk.com/about/. Accessed June 11, 2018.
2 NYCEDC. 2018. "Coindesk And NYCEDC Team Up To Launch NYC’S Inaugural Blockchain Week." https://www.nycedc.com/press-release/coindesk-and-nycedc-team-launch-nyc-s-inaugural-blockchain-week.
3 Morse, Jack. 2018. "Cryptobeer Vending Machine Promises Blockchain-Enabled Benders." Mashable, 15 May 2018. https://mashable.com/2018/05/15/cryptobeer-vending-machine-consensus.
4 Bowles, Nellie. 2018. "Cryptokitties, Explained ... Mostly.” New York Times, 28 December 2018. https://www.nytimes.com/2017/12/28/style/cryptokitties-want-a-blockchain-snuggle.html.
5 Karnani, Aneel. 2007. "Microfinance Misses Its Mark.” Stanford Social Innovation Review, 2007. https://ssir.org/articles/entry/microfinance_misses_its_mark.
6 "About - Hyperledger"., 2018. Hyperledger. https://www.hyperledger.org/about. "About - Hyperledger.” 2018. Hyperledger. https://www.hyperledger.org/about.
7 "IBM And Twiga Foods Introduce Blockchain-Based Microfinancing For Food Kiosk Owners In Kenya.” 18 April 2018. Blog. IBM. https://www.ibm.com/blogs/research/2018/04/ibm-twiga-foods/.
8 Geyer, Roland, Jenna R. Jambeck, and Kara Lavendar Law. "Production, Use, and Fate of All Plastics Ever Made." Sciences Advances, E1700782, 3, no. 7 (July 19, 2017). Accessed June 11, 2018. http://advances.sciencemag.org/content/3/7/e1700782.
10The New Plastics Economy 2018. Rethinking The Future Of Plastics. World Economic Forum. http://www3.weforum.org/docs/WEF_The_New_Plastics_Economy.pdf.
11"Plastic Bank - What We Do" 2018. Plastic Bank. https://www.plasticbank.org/what-we-do/.
QuickLook is a weekly blog from the Deloitte Center for Financial Services about technology, innovation, growth, regulation, and other challenges facing the industry. The views expressed in this blog are those of the blogger and not official statements by Deloitte or any of its affiliates or member firms.
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