Befriending The Planet With The Blockchain
Imagine, if you will, the plight of a farmer desperately trying to make a living in a third world country. Imagine spending every waking hour, 7 days a week earning just enough money to put food on the table.
For such a farmer, school is out of the question for his children because all hands are needed to tend the fields. One of the biggest problems such a farmer may face is that he has no knowledge of prices beyond his immediate location, and no way of accessing the global market.
He is the first link in a global supply chain that ends with mammoth retailers and consumers in affluent countries. Therefore he is forced to accept the low prices offered to him by the local wholesalers. If such a farmer could earn more money, then perhaps he could send his children to school.
What if blockchain technology could change all of that?
Here’s an even more revolutionary idea: what if there was a way to dramatically transform the fortunes of people living in the third world, by using blockchain technology?
Let’s be clear – blockchain technology is far from perfect. Indeed, what technology is?
But there are ways it can help us to develop our world in a more sustainable manner.
Boosting ethics and sustainability with blockchain technology
So let’s take the example of the farmer above to highlight one of the ways that blockchain technology can promote more sustainable and ethical practices.
When the farmer sells his products at the local market, the produce, quantity and price paid can all be entered into the database for others in the food supply chain to observe. Then consumers could see clearly how much profit each participant in that food supply chain earns. Customers who are concerned about fair trade can use this information to compel retailers and companies such as Wholefoods, to compensate the farmer fairly. Not only would this encourage fair dealing, but it would also encourage efficiency.
These types of technologies are already being utilised by pioneering companies such as Agri360, which connects farmers, suppliers, buyers, processors, and financial institutions. The farmers build up transaction history in this process, get right supplies at cheaper rates and sell their products to the customer directly at higher prices. The farmer scans his or her coffee beans at a kiosk. Image recognition then assesses the quality of the beans and assigns a fair price to them. This information is then provided to subsequent buyers in that supply chain to see and to act upon.
Following the carbon footprint
Another major concern when it comes to sustainability is that it is difficult for many consumers to track the carbon footprint and the ethical practices of the companies they buy from. Any company can claim to be sustainable or ethical. Even organisations that are set up to monitor this, such as Fair Trade face challenges when it comes to tracking every link in the supply chain.
If only we knew what the true environmental and ethical impact of our purchases were, then perhaps we could make more progress in saving our planet.
Blockchain technology has already paved the way for that. For example, Walmart conducted a field experiment to locate the source of its sliced mangoes. Without blockchain technology, it took Walmart employees nearly a week to locate the farm in Mexico which originally grew the fruit. With blockchain technology, it only took several seconds.
However, technology can do so much more than simply supplying information and potential profits. It can also secure food against contamination and tampering.
What is blockchain technology anyway?
In order to understand exactly why blockchain technology is able to help us to improve transparency and sustainability, let’s first take a look at exactly what blockchain technology is.
Most people associate it with Bitcoin or other cryptocurrencies. But the technology has broad uses beyond this. The blockchain is essentially a database with 4 characteristics:
- Open-source – access is shared among all users
- Immutable – entries cannot be changed and they exist indefinitely
- Updates occur immediately – all users are aware of changes at the same time
- Decentralised – it is not controlled by a single person or entity
The very nature of technology means that information cannot be altered. It cannot be monopolised by big companies or organisations, which helps to promote equality of distribution and awareness among consumers.
This is why we can do a much better job of monitoring supply chain management and ethical practices with blockchain technology.
With blockchain technology, we can monitor, the quality of energy, the types of materials used and other pertinent information. Customers can demand these details and the blockchain can provide access to them.
The technology can also be used to check compliance and ensure that companies and individuals abide by any agreements or commitments they make to sustainability.
Blockchain technology has already made great strides towards helping us to conserve our society and promote sustainable development. However, it is worth noting that it is far from being a perfect solution. For example, it requires an enormous amount of energy to function well. The annual electrical use of blockchain technology is equivalent to the entire country of Hungary’s consumption of power.
The annual consumption of Bitcoin mining alone worldwide is equal to the electrical output of Singapore. Not only is its usage increasing, but also much of the energy is generated from climate damaging fossil fuels. In 2017, coal fire power plants generated over 30% of electricity in the United States and 70% in China. So while technology can go a long way to improving sustainability, it is also important to be aware of the challenges that the technology still faces.
Overall, blockchain technology holds a lot of potential for ourselves and the planet. When we consider some of the sustainable development goals put forward by the United Nations (such as ending poverty), responsible consumption and production, and climate action, we can see how blockchain technology can empower people to make the world a better place.
We should also consider that the technology is still very much in its early stages and new innovations are emerging all the time. This means that it is very likely that some of the environmental disadvantages connected with using blockchain technology, may one day be resolved.
But in spite of all that, one thing is for certain: befriending the planet certainly becomes a little easier with blockchain technology.