SAN FRANCISCO — As development professionals consider ways technology can help scale their impact, blockchain often comes up. But while it is widely discussed, it is poorly understood, said experts in a recent Devex webinar. The potential of the much-hyped technology is yet to be observed — but experts urge that now is the time for the global development community to understand how the technology works, the potential use cases, and if it could add value to their work.
Sheila Warren, head of blockchain and distributed ledger technology at the World Economic Forum, and Ric Shreves, senior advisor for technology for development at Mercy Corps, joined Devex for “A Practitioner’s Guide to Blockchain” on March 20.
Blockchain is a “distributed ledger technology,” or in other words, a decentralized system of record keeping for a series of transactions. It’s often conflated with bitcoin, the digital currency, in which it plays a role, but it can bring trust to transactions of all kinds. The data that is stored can be seen and verified by all parties, in a system that is hard to hack, so participants can transact directly and securely with a trusted system that removes the need for third-party intermediaries.
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Blockchain is a foundational technology, much like the internet, with bitcoin being the best-known application built upon the technology. “It’s pretty easy to understand at a basic level, but the deeper you get, the harder it is,” Warren said. “The good news is, it’s a bit like the internet.” While most people do not understand how email renders on their screen, they can still use their email, and similarly as more applications are built upon the blockchain over time, the conversation will shift toward those applications rather than blockchain itself.
Donors and NGOs are poised for disruption with the rise of DLT because of the way this technology serves as a guarantor of trust, Shreves said. “Why should we in this space care about this tech, aside from the fact that there’s a lot of buzz about it?” he asked. “There is a potential for this technology to disintermediate certain functions, typically third-party trusted intermediaries, for example banks.” Given the critical role that trust plays in international development and humanitarian response — trust, for example, that funds are used for their stated purpose — it is critical that donors and NGOs, just as with the financial services industry, pay close attention to this technology, he said.
The webinar went over potential use cases for blockchain, from authentication to supply chain management to improved onboarding of beneficiaries. Both Warren and Shreves emphasized there are barriers that stand in the way — first and foremost, that it remains in the early adopter phase, as well as challenges such as robust networks and adequate data infrastructure. Many of the questions centered on practical tips for practitioners, including how to experiment with this technology without rushing into it; ways to hire the right talent for the transition; and options to continue the conversation through working groups.
You can watch the full recording here and view the webinar slides here.