Looking Past the Buzz: Here’s How to Make Blockchain a Pragmatic Force for Good
Editor’s note: This post is part of NextBillion’s series, “High Tech Buzzwords: Hype or Real Impact,” — one of several topic areas we’ll be covering through special series this year. Click here for more details on our 2018 series.
Can blockchain technology paired with a custom cryptocurrency enrich millions of struggling farmers and incentivize rebuilding earth’s ecosystems? Blockchain may not be the ultimate solution, but we are designing a new tool to do just this.
According to the Food and Agriculture Organization of the United Nations, as of 2014, there are at least 570 million farms globally, over four fifths of which are under two hectares in size. And according to the World Bank, over a quarter of the global population was employed by the agricultural sector in 2017. Agriculture also has the highest poverty rates of any economic sector.
The blockchain community is often associated with extreme wealth and a sense of disregard for environmental realities, such as electricity use. What could blockchain possibly have to do with the next billion? Aside from use cases of remittances, hedging against hyperinflation, and financial inclusion, what does blockchain have to offer the global poor?
Blockchain: A Primer
To back up a little, it might be useful to generalize the evolution of blockchain over its decade-long history. The first generation of blockchain was about units of account, or, in essence, extremely simple decentralized ledgers. The archetype of this era is Bitcoin, which premiered in 2009. By 2014, a second generation of blockchain was emerging, which enabled new capabilities—most notably the ability to run code via a decentralized network, such as smart contracts. The third era of blockchain is still emerging, but I would argue that this third generation might be about blockchains that tangibly link the digital and physical worlds.
In blockchain parlance, an “oracle” is an entity that bridges the technosphere and “meatspace” (the real world), as cyberpunks might refer to it. Blockchain aspires to offer resilient security and information immutability, but these features are worthless if the data coming into a blockchain is of poor quality to begin with. This challenge is at the crux of this third generation of blockchain technology.
For the past year I’ve been part of the team at Regen Network. With the help of blockchain, we’re focused on reinventing the economics of agriculture by aligning short-term interests with long-term ecological health.
Digital Innovation with Real-World Impact
Our system will have two core components. On the scientific and oracle side, we have Ecological State Protocols—algorithms tasked with verifying ecosystem health, such as soil carbon, erosion or air quality. On the blockchain side (Regen Ledger), we have Ecological Contracts, which enable parties to structure smart contracts based on increases in the health of a specific ecosystem. You can learn more specifics about these features in our whitepaper, protocols paper, and system architecture.
Regen Network has been incubated by a regenerative supply consultancy serving natural products companies—Terra Genesis International, founded by our CEO Gregory Landua and COO Christian Shearer a decade back. Our initial focus with Regen Network is in the field of regenerative agriculture. What if making ecologically-beneficial choices were aligned with financial incentives as opposed to at odds with them? This is the world we’re looking to create at Regen Network.
What could this look like in practice? Our partners at the Savory Institute, with their global network of ranchers and graziers, are developing the first outcomes-driven certification: Land to Market. You may have heard of Savory from their founder’s TED talk on reversing climate change and desertification via Holistic Management. Utilizing our Grasslands Health and Grazing Patterns Protocol (currently under development), Savory could track ecological outcomes across land under management by their member farmers, and communicate these outcomes to consumers with a per-product granularity. Additionally, Savory could structure Ecological Contracts that incentivize ranchers to meet certain benchmarks. This would result in a superior and more transparent product to consumers, a stronger margin to farmers, rivers with less nutrient runoff, and an atmosphere with less carbon.
Along the way, we’ve met a handful of other impressive blockchain startups with similar endeavors leveraging technology in service to the health of people and the planet. One example is Nori, a carbon removal marketplace based in Seattle. Whereas conventional carbon markets are focused on carbon offsets, such as installing solar panels to make up for released greenhouse emissions elsewhere, Nori will only list certificates that correspond to carbon removed from the atmosphere. Their blockchain will enable meticulous accounting around the tracking, sale and decommissioning of these credits (something conventional carbon markets have failed to do).
“Like the Internet in the ’90s”
What does this have to do with agriculture and improving the lives of subsistence farmers? According to the research of perennial agriculture scholar Eric Toensmeier, it turns out that good land management and agriculture practices actually hold the largest potential for carbon drawdown. Drawdown, a term popularized by Paul Hawken, refers to the point when carbon emissions move into the net-negative range. When adequately monitored and packaged, funds from the sale of carbon credits could be a significant boon to the livelihoods of farmers using responsible practices.
Where will all of this go? As many are saying, blockchain today is like the internet in the ‘90s; we have yet to witness its transformative potential. Regen Network, Nori and Terrafina are part of a growing movement to push the development of blockchain, in the words of Buckminster Fuller, “To make the world work for 100 percent of humanity, in the shortest possible time, through spontaneous cooperation without ecological offense or disadvantage of anyone.”
Image provided by author.