CAMBRIDGE – The World Bank, one of the most powerful financial institutions on the planet, is experimenting with blockchain as a tool to track agricultural assets and raise capital.
Gideon Lichfield, editor-in-chief of MIT Technology Review, found a bit of an irony in this.
"This technology that was invented by someone whose true identity we do not yet know – Satoshi Nakamoto – in particular to take power from financial institutions and put the currency in the hands of the people is now used by the last , central financial institution, "Lichfield told the audience at EmTech 2018, a conference focused on big data, artificial intelligence and technology.
The crowd gathered at MIT's Media Lab had just heard from two thinkers in the increasingly mainstream field of blockchain, a method of distributed master books that can drastically change the way in which transactions are made and verified.
The books themselves date back to cuneiform incisions incised in tablets 7,000 years ago, at the dawn of civilization, said Michael Casey, senior author and consultant of the Digital Currency Initiative at Media Lab. If blockchain solutions decentralize the records in the future, this change could stop the flow of money in the financial hubs of the world. Using the version of the 21st century ledger, governments and other institutions could invest the money saved on funding for other causes.
Michael Casey senior advisor to the Digital Currency Initiative, MIT Media Lab
"If they could raise money cheaper, you would have a lot more money to spend on health education," Casey said. "Why should [the cost of financing] pass into the hands of a large investment bank when it could return to the poor?"
Blockchain solutions could also help the so-called underbanked and unbanked to access financial services. Distributed logs increase credibility by replicating transaction records on a computer network. Casey said that credibility could benefit people like Nairobi, Kenya, who have difficulty exploiting the value of their real estate because banks do not trust their property records.
"The lack of trust in the recording function has a huge impact on the world," he said.
World Bank experiments with blockchain solutions
The altruistic applications of the blockchain were at the center of Casey's EmTech interview with Prema Shrikrishna, who works on blockchain projects at the World Bank Group.
Working with the International Finance Corporation, The World Bank is currently designing a blockchain architecture to trace the oil palm from the farm to the mills, where it becomes palm oil – an agricultural staple throughout, from chocolate with candles. Tracing the origin of the raw material, most produced in Indonesia, the blockchain could reward farmers for sustainable practices, according to Shrikrishna.
Among other World Bank experiments with blockchain:
Education. The World Bank is developing a system to reward students who play an educational game called Evoke, designed to teach skills for success in modern society, Shrikrishna said.
Management of vaccines. In December, Oleg Kucheryavenko, a public health professional working with the World Bank, wrote on the blog of the institution that blockchain could provide an "economic solution" for the distribution of vaccines. Vaccines have a deadline, wrote Kucheryavenko, and the supply chain is "too complex to be taken for granted, with vaccines that change ownership from producers to distributors, re-packagers and wholesalers before reaching their destination."
financing. In August, the World Bank sold blockchain bonds through the Commonwealth Bank of Australia, which raised about $ 80.5 million, according to Reuters.
The best cases of use of Blockchain
Members of the public had different aspirations for blockchain
Rahul Panicker, chief innovation officer at the Wadhwani Institute for Artificial Intelligence, which focuses on technological solutions for large-scale social problems, believes that blockchain can be exploited for humanitarian reasons.
"It was very encouraging to see an organization like the World Bank is willing to look at these frontier technologies, and especially a technology like the blockchain that has the ability to reduce the friction in the financial system," he said Panicker, after participating in the speech. "The whole purpose of the blockchain is actually to minimize the burden of trust: the cost of trust is particularly high in developing countries, so the fact that organizations like the World Bank are willing to look at this it can mean great things for the weak. "
Tom Hennessey, a participant, postulated that the financial agreement was the most readily available application.
Tomas Jansen, of the Belgian Federal Agency for the reception of asylum seekers, said that many refugees arrive in Europe without identity documents because they belong to a marginalized group or have lost their documents. Jansen wanted to hear the ideas of blockchain experts on how to deal with these problems.
Shrikrishna has circumvented the political ramifications, but noted that the World Bank has a program called Identification for Development that is working on the integration of ID databases and the creation of an identity that would be "portable beyond the boundaries".
He said that the World Bank is "technology agnostic" in trying to solve problems all over the world and stressed that the approach of the financial institution with blockchain was both "very cautious" and " very experimental ". "
World Bank is by no means the only one to explore blockchain solutions to solve problems and change the way business is done, analysts expect the blockchain to have a significant impact on companies, who are evaluating the potential to manage supply chains, check documents and trade securities, Gartner estimates the blockchain will add $ 3.1 trillion to the global economy by 2030. Some industries have been faster of others to start experimenting
Describing the blockchain as an "inflection point", a recent report by the consulting firm Deloitte found that financial services executives are "paving the way for the use of blockchain to review processes and functions that have remained static for decades "and emerging players are using blockchain to challenge traditional business models wings.
In the meantime, the case of more developed use of blockchain – bitcoin – – is driving most of the interest in technology, while bringing those invested in cryptocurrency in a roller coaster ride.
So far, the development of a "stable currency" has been a "difficult to break", according to Casey, which covered the currencies for The Wall Street Journal .
To stabilize the supply, a currency could be anchored to other metrics, or it could be supported by a reserve of funds to try to create more stability, Casey said. In one way or another, he predicted, developers will find success.
"Something will work, something will break," Casey said.