When most people hear the word “blockchain,” they automatically associate it with cryptocurrencies such as Bitcoin. This often has negative connotations given high price volatilities, shady use cases, and negative environmental impacts. However, cryptocurrency production and trading is a small aspect of blockchain technology, which has numerous use cases. In fact, blockchain technology is already proving to be a critical tool for social innovation.
Affiliates of the Stanford Graduate School of Business recently released a report on the use of blockchain technology for social impact. Spearheaded by Douglas Galen, a lecturer at the Stanford GSB and co-founder and CEO of Rippleworks, the project brought together students from across the university to research and interview a diverse set of organizations who are using blockchain technology as an integral part of their strategy. The majority of organizations surveyed said that their use of blockchain technology was motivated by providing a broader social good.
The case studies that constitute the report are illuminating. How organizations use blockchain for social impact varies considerably by sector. For example, in the climate and environment space, most of the interviewed companies used blockchain for the creation of marketplaces. These companies process millions of transactions trading and distributing energy for the purpose of using natural resources more efficiently and mitigating environmental degradation. On the other hand, fintech companies focused on serving the unbanked population are more likely to use blockchain to facilitate and process payments and transactions. This use of blockchain has the potential to disrupt and reform the financial sector, which has not traditionally served the poor effectively. Finally, in the healthcare space, blockchain technology facilitates secure and accurate storage and retrieval of electronic medical records. Blockchain is very useful for maintaining patient privacy (thereby adhering to HIPAA standards) while at the same time ensuring the consistency of de-identified records and preventing mistreatment.
Given the potential of blockchain to solve such challenges, are there any downsides to adopting blockchain technology in service of impact? In terms of challenges facing the use of blockchain technology for social good, companies across many sectors had a similar response: (lack of) regulation. It is risky and costly to implement blockchain infrastructure in a nascent and undeveloped regulatory environment. Hopefully, the report will allow companies to collaborate in working with policymakers and regulators.
If you are interested in using blockchain technology in your own organization, or simply want to learn more about the space, I highly recommend reading the report.