The Social Impact of Blockchain
By enforcing transparency, blockchain is the perfect solution to establish veracity. The potential implementation may vary from giving refugees an identity to tracking recyclable product by giving each physical product a digital identity and establishing the transparent market. In the fourth episode of Blockchain Beyond Hype, we talked with Jean-Daniel Gauthier, the co-founder at Blockchain Zoo about the social impact of the blockchain technology.
Laks: Danny, as a tech and business professional you are very passionate about startups. Certainly, as you are specializing in adopting blockchain, the majority of projects you deal with are using this technology. Could you explain to us why your choice leaned towards startups and why towards blockchain?
Danny: Well first, I like it lean. And startups, they do lean mostly. There is interest in blockchain from much bigger entities, big cooperates, and governments, but even if they sometimes really want to, there are barriers to actually going to POC real fast. Mostly the reasons are budgeting and some risk adversity. Plus, when you’re a huge company, let’s say with a thousand of people, in order to make something happen such as broadcasting a message, broadcasting a change, broadcasting an order, it takes very very long. And I like it when things are a little bit snappy. So at this point, startups are good for that. And also they sometimes come up with all kinds of crazy ideas and all kinds of crazy people and these are my people and my kinds of ideas.
Laks: OK. So why towards blockchain?
Danny: Someone once asked me whether I was in love with the technology. Do you love blockchain? So first off, no, I don’t love blockchain because I can’t marry blockchain and I’m already married anyway. What I love are the possibilities. There was this time when I sent money to a friend who needed it from Jakarta to some city in France. It was on a Friday night, and he received it in 15 minutes. I helped him because he needed it not to buy video games or something. He needed it to eat. So I could make sure that my friend could eat at the weekend. If I had gone for a wire transfer or anything else, it would have taken at least three days. And that was almost instant with almost no fees, and I thought ‘damn, what else can I do that can actually help people with that?’. I’m married to a local Indonesian, and I have family all over Indonesia, including villages and remote areas. So I’m thinking, could it help me to, for instance, send money to support my family up there in the mountain? And I do think it’s possible.
Laks: Your profession may be called blockchain consultant. What does a person in such a profession actually do? What is your job description?
Danny: I consult about blockchain. Basically, there is a lot of interest in the technology but startups or bigger companies or those interested in it they don’t know where to start. So they call people like me. First, I need to be a psychologist because I need to know exactly what they want. Then I need to be a teacher and explain what happens. And then I need to link. ‘OK, now you’ve told me that your goals are A, B, and C. The blockchain fits for A and C. I’m going to show you how to do it. I’m going to show you the steps.’ This is what I do.
Laks: There are so many innovation consultants, data integration consultants, digital transformation consultants. Why do we also need blockchain consultants on top of this already long list?
Danny: This is a good question. You know orange juice, right? The orange juice is 10% orange, and all the rest is sugar and other stuff. Right now, a blockchain solution is much like orange juice. You have 10% blockchain, and the rest is traditional technologies. You need someone who can help you figure out how this 10% is going to fit into your system in a way that is accurate and productive.
Laks: Out of projects you have worked on or consulted on, could you reveal which percentage came to the conclusion that blockchain was actually THE technology to use?
Danny: I would say, for many reasons that would be around 50%.
Laks: OK. So why are so many businesses looking into this technology despite it not making sense for them?
Danny: “Tourism”. I’m going to be very direct about this. It’s a new technology. There is a lot of hype. So there are two types of “tourists” now. The ones that say ‘I’ve heard about ICOs so how can I make a lot of money right now?’ Then I’m like ‘No, you can’t’. And then those “tourists” who have heard about blockchain and what to know what blockchain can blockchain do for them. But the problem is they don’t know their own pain points. And when they realize their own pain points, they realize that blockchain is actually not for them. I won’t blame them for trying. Because I think it’s good in technology to be curious and to explore everything that comes out. But sometimes something is not for you, and that’s fine.
Laks: So what was the simplest yet impactful advice you have given to a company which was about to start adoption of the blockchain technology?
Danny: Don’t store your users’ private keys in the database in the clear 🙂 If there were this one secret that consultants don’t want you to know, people would already know it. In consulting we have to go through processes to actually extract what customers really want and really mean. So it’s very personalized. I can say that sometimes after an agile workshop a client who wanted A ended up realizing that they needed B instead. That their wants and their needs were completely different. This period of very open dialogue actually helps. You can help drive change and drive innovation within the company.
Laks: One of the points I have picked up on is that you are so passionate about this specific technology because of how impactful it is, how it can reshape societies. I was trying to narrow down spheres of this impact, and these are the few that I came up with. Could you help me with bringing specific examples, or just explaining the way technology would enable better solutions? So firstly, for educational systems – how attendance rate, scholarships and tuition fees, marks are managed, communicated to all parties involved such as students, parents, schools, universities, and funding institutions.
Danny: All right. So it might be a bit tangential to your question but what I’m looking at is that blockchain is good at establishing the veracity of something, at enforcing transparency. It’s also good at making data portable. So instead of having data which is concentrated in one place which is in one school or one university, it is with you, and you bring it around. Just imagine that. For instance, my mother used to keep all my grades and all my everything that happened in school. I came back home at some point and was like ‘Oh my God, this is what I was in third grade’. It was possible because my mom did it; my mom kept the data. Now imagine that your mom doesn’t have to do it. You have it somewhere on your phone in a car, in a device that keeps it for you. You can keep all your grades from all your exams in your pocket or with a single identifier, with your own private key, passphrase, whatever you used to sign in — single identity. You move from one school to another; they already know how you were faring. Then you go to university; they already know how you were faring. If you want a grant or anything like that, this is all in your card. If you graduate, if you have a diploma, this diploma can also be accessed from your single unique identity, meaning that it’s not a forgery and it’s proof. You can use it later to find a job or to change university or to do everything that actually requires the actual piece of paper. So this is already pretty powerful. It’s also good socially because schools can also accredit each other. If you have a good school with a good reputation that’s going to accredit a smaller school somewhere in a remote village, the accreditation is very valid. With a system like this, you know that it’s not a fraudulent accreditation.
Laks: What about for the coordination of resource distribution among refugees, homeless people, or any other group which requires extra help and care from society?
Danny: I think it also boils down to the portability of data. For instance, take Walmart that has already implemented blockchain solutions for traceability. When you actually have physical assets and resources that are circulating, it’s much easier, much more reliable, and much more auditable to track them with the blockchain solution. So at this point that could help with the distribution of resources among refugees.
As a refugee, you have certain rights, and you need to have an identity that sticks to this status. So that’s another thing that can be done with the blockchain — for instance, applying for the status of the refugee because you don’t just get into a country and get your refugee card. It’s actually a pretty lengthy and tiring process. At this point, this application could be made digitally in decentralized manners. So all the organizations that have something to say about this status and all the bodies where these status matters when you need to present this status could have a node on this blockchain so you can actually present yourself and everybody can be sure that you are you. So that’s another way it could help.
Laks: And lastly, to incentivize all kinds of sustainable practices among citizens such as recycling, proper waste management, decreasing electricity usage and so on.
Danny: You had me at recycling. There is one figure that is stuck in my mind. It’s an old figure from somewhere around 2010. We actually dump something like 350,000 cell phones per day. Right now if we were to start mining all used PCBs (circuit boards), it would be more profitable than actually mining the ground. But we are not doing it because the logistics behind that are very complicated. That’s the first reason. The second reason is that there is not enough incentive to actually start the recycling process. I’m pretty sure that in your drawer at home you have one used cell phone that’s going nowhere. And I’m pretty sure that whoever is reading this has this cell phone drawer or this cable drawer, or this all the dead electronic drawer and it’s not going anywhere. And the day it goes somewhere you don’t even have the insurance that everything is going to be recycled as it should. Because when you recycle something, you create an offer. But locally, there is not always a demand for this offer. So the PCB, it can be scrubbed for gold, for instance, but it can also be ground and transformed into ground PCB. You can make another type of plastic with it, but you can also make roads from recycled plastic. They are doing it in India if I’m not wrong.
But who is going to do it? If it’s not in your neighborhood, in your city or the next city, you’re going to have to ship it. But to ship it, you need to ship it in the right quantities. But if you can build a global market for reusable products, recycled plastic, recycle PCBs, all the old cables, copper, aluminum and the service for the treatment of dangerous materials like cobalt and so on, then you’re going to find that people are going to capitalize on this offer and demand on this marketplace. Market prices are going to start to appear, and they are going to attract players in this industry to say ‘I didn’t know there was such a demand for recycling in my city, I’m going to open a plant’.
But then again, the plants can be themselves in the blockchain to ensure traceability. If I buy your refurbished phone, I know that this company is refurbishing it and that this is actually a legit component that is not too old. Same goes for when you recycle something. ‘Okay, this is recycled plastic but I know it comes from that phone and all the hazardous material has been handled the proper way’. All this gives value to the recycled products. There is a whole industry to be rebuilt on recycling that could really use the blockchain.
Laks: Do you know any project which actually brought such a massive and socially impactful solution to life?
Danny: You’re not going to be happy with my answer. Not yet. Blockchain is already old. I mean not as old as the Internet but it’s ten years old. However, it’s ten years old for cryptocurrencies. Bitcoin is ten years old. It’s very well validated concept. But the blockchain for everything else, we’re just starting, and there are fantastic initiatives. A company called Building Blocks is doing something with refugee camps, for instance. There are several initiatives for smart grid and blockchain. But this is still at the POC stage. For a massive change, we still need to wait a couple more years.
Laks: The market for social good is very competitive. And I used the word market on purpose, as, let’s be honest, it is a business. Hundreds of NGOs and firms that work in international development compete with each other for public recognition, manpower, grants. And here is the inconvenient question: Is full transparency what they really want?
Danny: So if I were to talk around it, I’d say that in every market there is something that’s based on the asymmetry of information and of course secrecy in business is sometimes what makes the added value. It’s not because you are a doctor that you have to be sick. So it’s fine if they make profits. The truth is there are good actors, and there are bad actors everywhere. There are people who want to profit from every situation. Those people who want to profit from every situation, they don’t want transparency. That’s clear. Then again, we’re talking about the technology. The technology can make data and processes more transparent. It doesn’t make people more honest. So there is a change of behavior that’s to be expected when you talk about social causes. But I think, and this is why it brings us back to the startup thing, I think there is a new generation of entrepreneurs and social entrepreneurs that actually are starting to embrace the concept of philanthrocapitalism and all this new way to see money and to see empowerment. I’m very interested to see where it is going.
Laks: Well, the topic of Social Impact is so highlighted already, that there is a Blockchain for Social Impact Coalition (BSIC) with over 50 member organizations. Despite them joining forces, there is one big obstacle. Corruption is a major problem in development in many developing countries. How do you see Blockchain Technology overcoming it?
Danny: I don’t. To be honest, I see people changing. I see people seeing the need for change. I’m very much into giving people the agency they deserve in changing their lives, in changing their environment. Because – and it’s going to sound cheesy – but ‘together we can’. I’m French, just see what’s happening in France, right? So technology is what you make of it.
It’s like a knife. You can hold it by the handle and cook a beautiful and delicious meal for everyone to enjoy. Or you can just go around and stab people. Now, how we approach humanity as humans, that’s what is going to decide whether we approach technology as an enabler for Utopia or Dystopia. I think I’m going to have to keep my faith in mankind going for a little while longer if I want to keep on working with technology. But that’s a sacrifice I’m willing to make.
Laks: If you could pick one change which will occur in our societies in the nearest future because of the mass adoption of the blockchain what would it be?
Danny: I think the nearest one will be the start of true digitization. The start of the no paper approach to things. What I would like to see in the longer term is you never have to provide the same piece of information twice.
Laks: Okay. Well, this has been very interesting. Thank you for telling us about the social impact of blockchain technology. We do like to ask all our guests, how do you envision blockchain changing the world?
Danny: You will never have to input the same piece of information twice. I’m repeating it but think about it. If you’re somewhere lost in the mountain and you have a birth certificate, a marriage certificate or whatever certificate you need to apply for, you’ve given this information once. Then you can go to your nearest point of contact and never again have to go down to the city and all these offices and all the red tape providing the same information, again and again, going through the same processes, again and again. That is going to change your life as a person wherever you live. It’s going to make things fairer for people in a way that we are not even expecting yet. I do think so.
Laks: And how do you think the market for the blockchain-based solutions will evolve?
Danny: That’s very interesting. I think we’re going to see blockchains act as platforms. It is already starting, of course, with for instance Ethereum, with Dapps and MetaMask. I think this is the direction the technology could take. So blockchains as platforms, Dapps as apps with a single point of entry for all those apps, maybe even interoperable between these platforms. So one identity, many users. Later in many years, maybe even one currency. It would be fun or not depending on what your take is on it. But yes, you will have app stores for blockchains. That’s what I see.
Laks: All right. Well, it’s been great to have you here with us Danny. Thank you again for sharing your thoughts on blockchain and social impact of this technology.
BBH Guest: Jean-Daniel Gauthier, Co-Founder at Blockchain Zoo
Danny is one of the co-founders of Blockchain Zoo, advising on multiple projects and spearheading the development of Blockchain Zoo in the Jakarta area in Indonesia. Danny is a technology enthusiast and blockchain early adopter. With more than 15 years of experience in IT and managing the startups, he fathered the first legal music download website in Indonesia, one of the first crypto-crowdfunding whitepapers DeBuNe and became a co-founder of the award-winning startup Open Trade Docs.