How do you know where your jeans were made? You might look at a label and see that they’re from Indonesia. But what are the conditions of the factory? How much is that worker being paid? What chemicals are being used, or waste being produced? Without transparency, it’s impossible to tell.
Balancing a need for transparency with protecting trade secrets is a critical balance. A company’s supply chain is a unique thumbprint, whether we’re talking about food supply, fashion, or global energy distribution. That’s why transparency is difficult: sourcing materials, transportation networks, and distribution models require a shroud of secrecy to prevent imitation.
It’s possible to balance these concerns, thanks to the technology that drives cryptocurrencies. By thinking about how it might be done, we open up a world of ideas that can illuminate how corporations can think about the social impact and opportunities to create social good.
First, let’s look at blockchain from a different perspective: rather than a financial tool, let’s think about it as a narrative. Then, let’s think deeply about the stories we tell — not just the tech we use to tell them.
A Ledger is a Story
To understand how blockchain can work for social good, we have to walk away from the idea that blockchain means cryptocurrency. Instead, we should think of blockchain as a story: I got $3 from my friend, I gave another friend $3 for a coffee, the coffee shop gave that $3 to the barista, the barista gave that $3 to buy a bus ticket, etc. The traditionally unhelpful explanation of blockchain is that it is a “distributed ledger,” but a ledger is a story, a narrative that tells us how an object has travelled through time and space.
Each piece of data is one block. When they’re arranged to tell a story, it’s a chain. When we think of blockchain, instead of thinking about BitCoin, let’s think about a comic book: something happens in one block, and it effects what happens in the next block, and then, at the end, you can see the whole story. If you don’t understand what’s happened in a block, you can scan back across the story blocks in a comic book until you find the bit of data that helps you make sense of it.
When we think of blockchain as a story, we can see that a technology that tracks the flow of money can track anything at all. You can use it to track objects in a video game. You can create a small tag that’s scanned at each port to track an object moving through the world to your warehouse and out to your store. You can link a “block” to a fingerprint, to see how people are moving across borders, and protect their identities.
Let’s think about another chain of blocks: a crossword puzzle. A crossword puzzle is also a kind of story, where each letter builds on the letter before it. Each block contains a piece of data: an “M,” for example, followed by an “O,” etc, until you spell a word: “MOON.” In a crossword puzzle, you can see if the word is correct because it intersects with another word. If the words don’t line up, you have to go and correct it.
A blockchain functions in the same way. In a distribution chain, each stop is a “block,” a check-in point in the story of how something moves from the factory to the consumer. Every bit of data relies on the data in the previous block, like a comic book panel or a crossword answer.
But the real power of blockchain isn’t in a single stream of data, just as a single word in a crossword isn’t interesting. The power comes when the letters of the crossword overlap, and offer greater insight into the data. A blockchain is only useful when it is a distributed story, where many people can contribute to describe what happens.
A to B to C
Let’s apply this understanding using a food supply chain as an example. In a food supply chain, a farmer harvests rice, an exporter gets the rice and ships it. Each of these steps requires payments. Each of these interactions is governed by laws and regulations. Each has invoices, fees for handling those invoices, and staff bringing bills to the bank or resolving payment disputes.
Think back to that crossword. Each stop in a supply chain is a letter spelling out a word, telling a story. And running through each “block” is another chain of data, spelling out another word, telling another story. Is the farm using sustainable pesticides? You could find out by looking at the EPA’s data for that farm on a blockchain. What about shipment? Are you buying dairy that’s kept in a sweltering hot shipping container? If the shipping container is equipped with a digital thermometer, you can see exactly what temperature it is at any step of the way. That’s another stream of data, another story.
WalMart, IBM, and others have teamed up to use their own blockchain tech to trace back packages of food using barcodes. By scanning a barcode, you can see exactly when a head of romaine lettuce was picked, down to the hour it was logged into the system. When a crisis erupts, such as an e.coli scare that struck the US in April 2018, we could, in theory, tap into the blockchain, find lettuce from the problem farm, and remove it. Without that tech, we’d be forced — as many US grocery stores did — to destroy all romaine lettuce, because there is no way of knowing if the lettuce on any given shelf came from.
When we connect the data streams of these intersecting payments, regulations, and sensors, we get a more complete story about where things are and how they got there. But we can also see how those spaces are situated in the bigger, global puzzle. Today, we’re using tech to see how much money is spent on a granular level, and how products have been treated as they are on their way to your warehouse.
What if we could use the same technology to look at how people, or our environment, are being treated? We could, if there was a ledger for human rights, environmental protection. This is why blockchain has so much potential for social good.
Imagine scanning an item — as a distributor or a consumer — and being able to see if the money you set aside to pay responsible wages to these producers is being spent the way you planned. If a human rights organization is talking to the crew of ships before they leave port, you can see that, too.
All of this requires organizations to make their data available to you, and to build the infrastructure to support it. A crucial aspect of the blockchain is that it can actually obscure aspects of a story and reveal only what’s important to those who need to know it. Back to the crossword metaphor, we could look at a block and say “Is it an L?” and get a yes or no — without knowing what word that “L” belongs to.
Think of this way: Going to a bar and getting carded. When you hand over an ID, you’re showing the bartender your home address, your height, your weight, and a (in my case, unflattering) photograph. If that’s what sharing data about a supply chain is like now, then a supply chain with blockchain is the equivalent of putting a thumbprint onto a scanner. If the screen flashes: “21+,” that’s really all the bartender needs to know — enjoy your margarita.
The blockchain is able to share endless of streams of data while revealing only what’s needed to know. We can set this to full transparency — a human rights organization might, for example. Or we can set it to minimum transparency — a jeans retailer can show a customer that the factory the jeans were produced was inspected by an NGO, without showing where the factory is; they can show an inspection record for a chemical plant without disclosing how their dyes are made.
If done right, the blockchain can create a fusion of business and environmental protections, protecting human rights, public health, and trade secrets. There’s no reason that any system that can tell you where a fish was caught can’t also prevent slavery in the fishing industry. In a science fiction future that is quite reachable, a local fisherman could be paid directly into their own wallet at the point of sale.
Blockchain for social good
Examples of blockchains being used by NGOs and the nonprofit world abound.
- The World Food Program’s “Building Blocks,” uses the Ethereum blockchain to distribute food vouchers.
- UNICEF’s ID2020 initiative uses blockchain and biometrics to create unique, private, decentralized storage for sensitive identity information for refugees (health care, school records, bank data).
- WIN, the “World Identity Network,” (alongside the UN) creating stable identification on the blockchain to address human trafficking in Moldova.
- US Startups Alice and Giveth, an open-source platform that allows users to donate funds and participate in the way that they’re spent.
- Usizo allows you to buy electricity for schools in developing nations: you can literally “pay into” a school’s energy meter to ensure the electricity stays on.
These data streams don’t automatically produce themselves, and when they do, they don’t automatically get transferred to the blockchain. They would have to be designed into these structures.
We can assume that blockchain will become “invisible tech” someday — much as artificial intelligence is becoming an assumed element of any product launch. But this requires the will, and desire, for those who create startups, or supervise a new blockchain project, to remember that it’s an opportunity not only to increase profit and bureaucracy. The blockchain inscribes values into a business.
If we can create sets of data that serves as a check-in point for the world’s most vulnerable people, if we can inscribe forms of accountability into our networks, without veering into surveillance and invasions of privacy, then the blockchain has enormous potential to create a more just world. But it requires effort, critical thinking, and a willingness to speak up and ask for the mindful consideration of the world we want to build.
This piece is adapted from a presentation at the 2018 Evolve Conference for Social Entrepreneurship at the University of St. Gallen (HSG), Switzerland. It is a reflection of swissnex San Francisco’s continued thinking on the emergent future by looking at the transforming structures of society.
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