Blockchain Lab: Innovative Solutions for Sustainable Development

Project description

Title: Blockchain Lab
Commissioned by: GIZ-financed measure
Country: Global
Overall term: 2018 to 2019

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Context

There is a confusing new vibe surrounding Distributed Ledger Technologies (DLT), commonly referred to as blockchain. Having emerged rapidly, these technologies are driven by startup pioneers and hold the potential to transform the fundamental mechanisms of how society, economy and governmental institutions collaborate. Considering that these new forms of distributed governance are still at a very early stage of their development, it is not yet clear which framework conditions and design decisions are best suited to align DLT‘s new mechanisms with broader societal benefit.

A number of existing blockchain applications have demonstrated direct or indirect impact on the achievement of the United Nations Sustainable Development Goals (SDGs). For example, transferring remittances has become cheaper than ever before, and responsibly mined diamonds are now traceable on digital ledgers thus giving consumers the certainty that they are not purchasing blood diamonds.

In a nutshell, the advantages of blockchain are to reduce transaction costs, avoid counterparty risks, and provide an audit trail of interactions between individuals, companies, governments, or even things. Given that transaction costs, trust, and consensus mechanisms are fundamental to our economy and society, the fields of application are virtually limitless, opening up new avenues for the achievement of the 2030 Agenda which explicitly links economic, social and environmental development goals and combines poverty alleviation and sustainability.

Objective

The project taps into the transformative potential of DLT applications with a view to the United Nations’ Sustainable Development Goals (SDGs).

Blockchain use cases

Approach

The GIZ Blockchain Lab focuses on examining a subset of the most promising blockchain applications, which outline clear added value in terms of societal benefit as expressed by the SDGs. For example:

  • Connecting millions of unbanked businesses or citizens to financial or other basic services, thereby reducing poverty and enabling economic growth (SDG 1 and 8).
  •  Decentralising energy markets in form of microgrids and thus giving energy access to remote communities while increasing the reliance on renewables, for instance, by incentivising the installation of solar panels (SDG 7 and 13).
  • Creating transparent and trackable supply chains, allowing consumers to view details at each step, including workers’ wages, sustainable production methods, and environmental impact (SDG 8, 12 and 13).

By engaging with the startup ecosystem, governmental institutions, academia, and the business sector, the Lab works on an interdisciplinary basis and considers blockchain use cases from an economic, legal and institutional perspective. This means that in a first step, the Lab examines technical solutions from DLT startups to determine their relevance to the SDGs. In a second step, demand and feasibility analyses are performed on promising applications. These analyses are then developed into detailed operational and governance concepts that include legal and economic aspects. Hereby, the Lab uses an agile, interdisciplinary, and innovation management approach, which relies, among others, on co-creative workshops, design thinking and hackathons.

Finally, the focus always being on practical implementation, the Blockchain Lab is geared towards users and target groups as well as development-policy objectives as illustrated by the Principles for Digital Development.

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