blockchain technology - arizona state university technology: implications for development 4...

BLOCKCHAIN TECHNOLOGY IMPLICATIONS FOR DEVELOPMENT

Kevin D. Johnson Arizona State University

This report is based on work toward the Master of Global Technology Development in the ASU School for the Future of Innovation in Society

Risk Innovation Lab Arizona State University January 22 2018

riskinnovation.asu.edu/blockchain-innovation-nexus/

BLOCKCHAIN TECHNOLOGY: IMPLICATIONS FOR DEVELOPMENT 2

CONTENTSABSTRACT .............................................................................................................................................. 3INTRODUCTION .................................................................................................................................... 4KNOWN RESEARCH CATEGORIES .................................................................................................... 5HOW BLOCKCHAIN IS CURRENTLY BEING APPLIED .................................................................. 5HOW BLOCKCHAIN MIGHT BE APPLIED ....................................................................................... 8HOW BLOCKCHAIN WORKS .............................................................................................................. 8THE HYPERLEDGER MODEL ............................................................................................................ 14BLOCKCHAIN POSSIBILITIES: HYPERLEDGER AND INTERNATIONAL DEVELOPMENT .. 16SOLAR POWER IN DEVELOPING COUNTRIES WITH BLOCKCHAIN: A POTENTIAL EXAMPLE .............................................................................................................................................. 17

SCALING OUT THROUGH DECENTRALIZATION ..................................................................... 19LOWERING STAKEHOLDER RISK ............................................................................................... 20

CONCLUDING THOUGHTS ................................................................................................................ 22DEFINITIONS ........................................................................................................................................ 24REFERENCES ........................................................................................................................................ 25


ABSTRACT

Blockchain technology is being explored in several places around the world to solve problems

and make systems of record more efficient. This paper outlines and provides a review of blockchain

technology and includes potential implications for international development in private, government,

and non-profit sectors. This research defines blockchain and other terms important to an understanding

of the technology, discusses how blockchain is currently being applied, how it might be applied,

explains how the technology works, reviews Hyperledger as a potential platform for use in a

development context, supplies an example of how the technology might be used in a solar power grid,

and provides concluding thoughts as to the positive and negative effects of implementing blockchain

technology in the developing world.


INTRODUCTION

In June 2017 IBM CEO Ginni Rometty remarked, “What the internet did for communications, I

think blockchain will do for trusted transactions.” (Rapier, 2017) Though blockchain technology is

typically associated with Bitcoin and other virtual currency platforms, the underlying innovation of

blockchain is likely how societal disruption will occur (Knight, 2017). According to Brian Behlendorf,

blockchain has the potential to rewire the way the world works (Ibid.). Blockchain carries within it the

potential to transform international trade, taxation, real estate, and even healthcare (Alexis, 2017).

Almost any system of record and the processes built around it can be replaced by blockchain. Federal

Reserve Governor Lael Brainard made clear in a meeting of the Institute of International Finance in

October 2016 that blockchain has the potential to disrupt and transform the way financial market

participants transfer, store, and maintain ownership records (Price, 2016). Of course, not everyone

agrees that blockchain carries with it such potential. Even still, given Hernando De Soto’s claim that

better recordkeeping spurs economic prosperity in developing nations blockchain also has potential

uses in the developing world (De Soto, 2007). Of course, governments aren’t far behind in seeing the

revolution blockchain may have for immediate and indisputable tax collection (Schwanke, 2017).

China has recently announced that it will use blockchain for taxation and has been busy implementing

blockchain in local and provincial governments (Lant, 2017). Blockchain may represent a fundamental

change in the way economies work and may create new socioeconomic opportunities and problems

(Cohen, et al., 2017). As such, blockchain technology and its eventual implementation is an important

topic that likely has comprehensive implications for societal innovation and human flourishing.


KNOWNRESEARCHCATEGORIES Some areas of research regarding blockchain are well-defined. Blockchain research on Bitcoin,

privacy and security, the nature of the technology itself, and basic implications are areas that are easily

identified in research. A recent literature review on blockchain technology focused on Bitcoin,

privacy, and security concerns (Yii-Huumo, Ko, Choi, Park, & Smolander, 2016). No mention of

blockchain in or concerning developing regions was provided in the review. 80% of the research

surveyed dealt directly with Bitcoin and 20% focused in the main on privacy or security concerns

(Ibid.). Blockchain research also typically lacks concrete quantitative evaluations of actual

implementations of blockchain technology (Ibid.). Other articles see blockchain primarily as a

potential platform for business (A Global Conversation About Blockchain, 2016). However,

blockchain is also being explored for governmental and other use and some even see socialist

principles at work in its design or implementation due to its distributed nature (Huckle & White, 2016).

In fact, little research exists of blockchain in the context of international development beyond the very

occasional article and the best research is still highly theoretical (Lemieux, 2016, p. 112). Strict

comparative or quantitative studies detailing the use of blockchain in actual societies remain elusive for

the time being since blockchain technology is so new and there is little if any data to assess and analyze

its effectiveness, outcomes, or impacts.

HOWBLOCKCHAINISCURRENTLYBEINGAPPLIED As noted above, blockchain technology is already in use in various types of applications around

the world or at least being proposed for use. IBM and Walmart, for example, are working on a

blockchain proof of concept that will provide end-to-end food traceability that tracks the life cycle of


food from its origin to purchase by a consumer (Gregor, 2017, p. 6). As a result, Walmart will be able

to pinpoint where and when compromised food has an issue and can track its source in the event of a

problem with the product. Blockchain will enable Walmart to avoid broad recalls and only pull back

the actual food that was tainted from the source (Ibid.). The global shipping company Maersk and

IBM are collaborating as well to also provide an end-to-end supply chain solution that uses blockchain

to track the many millions of shipping containers it uses to move goods across the oceans. This

solution aims to reduce paperwork, speed the movement and tracking of shipped goods, and lower

transaction costs to do so (Gupta, Keen, Shah, & Verdier, 2017, p. 187).

Of course, the financial markets are also very interested in blockchain and several companies

are previewing blockchain technology in conjunction with IBM and other vendors. CLS Group is

working on a blockchain that will standardize its payment processing while allowing external parties to

participate in the project without having to run a complete copy of the digital ledger (Gregor, 2017, p.

5). The Bank of Tokyo-Mitsubishi UFJ is also using blockchain to consolidate and manage the

lifecycle of complex contracts involving projects, service-level agreements, and payments under one

master agreement. The common denominator among all of them will be a blockchain ledger that tracks

the contract process from start to finish.

However, blockchain technology is not only being applied in the private sector. Samsung was

recently awarded a contract with the government of Seoul to provide blockchain solutions for

maintaining and tracking citizen data for public safety and transport (Hebblethwaite, 2017). The U.S.

Federal government through the GSA has launched an initiative to study and explore blockchain

technology usage for procurement, IT asset and supply chain management, smart contracts, patents and

trademarks, personnel workforce data, and many other items where digital ledger technology could

help optimize efficiency (GSA). Dubai Customs is planning to use blockchain to check and record the


import and export of goods going in and out of Dubai and has the additional advantage of using a

cloud-based system in conjunction with IBM to do so. Dubai will replace current paper contracts with

smart contracts and sensor devices to track goods from end-to-end (Gupta, Keen, Shah, & Verdier,

2017, p. 187).

Blockchain technology is also being explored by organizations involved in international

development. The United Nations World Food Programme has developed a pilot program that uses

blockchain and iris scanning technology to verify and monitor the food purchases of Syrian refugees in

Jordan (UN WFP, 2016). Positive Women, an organization that works with families in Swaziland, is

using a system to transfer funds between the United Kingdom and schools in Swaziland through

blockchain technology. The project ensures that the money goes where it should and makes sure funds

are used for their intended use as a result. Money saved from the project has resulted in three

additional students being able to attend school (Nyamadzawo, 2017).

Some African nations have been ahead of the technology curve of developed countries like the

United States in adopting advanced national payment systems (Gupta, Keen, Shah, & Verdier, 2017, p.

186). In Tunisia, over three million citizens have no bank account and yet they have access to digital

currency through cell phones and blockchain-based accounts that are available in the Tunisian National

Post Office (Ibid.). As a result, Tunisian citizens can use this digital national currency to pay for goods

and services, make mobile money transfers, pay bills, and manage government identification

documents (Ibid.). Behind Tunisia, Senegal has also become the second nation to adopt a digital

blockchain solution for its national currency (Hojgaard, 2017, p. 2).


HOWBLOCKCHAINMIGHTBEAPPLIED Blockchain represents an exciting new technological resource that has potential in international

development—taxation, economic growth, currency, asset recording, and non-traditional banking

services among others. Blockchain could also be used in ways that could be problematic for society

including establishing a clear and near indisputable record for governments to use in oppressing

citizens, the extension of ruling class power to digitally dominate other classes through automation,

and commoditizing the way entire societies function through application of blockchain technology. At

least one researcher is concerned that blockchain will commoditize everything in an economy and

presents the world with a dystopian future where the power of capital reigns supreme once

technologies like blockchain and Internet of things measure, automate, and influence even the most

minute details of normal life for humanity (Garrod, 2016). Other researchers are conversely asking the

question whether blockchain will aid in ridding the world of poverty (Kshetri, 2017). Blockchain has

the potential to eliminate or circumvent traditional banking resources and free up dead money in the

developing world that isn’t part of the world’s international economy (Smilansky, 2016). Common

ownership of resources like land that prohibit its transfer using normal economic means could also be

solved through blockchain in the developing world while reducing government corruption and

unnecessary bureaucracy (Murray, 2015).

HOWBLOCKCHAINWORKS Blockchain technology is essentially a series of encrypted records chained together over a

distributed environment that greatly minimize the potential for fraud. In other words, blockchain

provides a unique and verifiable record for any transaction in a system of record through secure


cryptography and a decentralized approach that enables the system to verify transactions across

multiple nodes. The cryptography is linked and built on each of the previous records so that duplicate

or fraudulent transactions on the blockchain are exceptionally difficult to achieve. Majority consensus

between nodes in the decentralized system provide a secure way to implement the blockchain across

the network. Of course, no system is ever 100% secure and various situations and efforts could

compromise the system (Li, Jiang, Chen, Luo, & Wen, 2017). If attackers gained access to a majority

of the nodes used in providing consensus when recording a blockchain, the system could be

compromised (Ibid.). Aside from difficulties like this, a blockchain enables separate parties to

participate together in a value exchange as illustrated in table 1 below.

Table Characteristics of blockchain applications. (Source: Capgemini Group, 2016)

DecentralizedInformation CryptographicSecurity

Dataisstoredinnodesondistributednetwork Builtonpublic-keyinfrastructure

CryptographicrecordIDmatchedwithanyaccompanyingdata

Cryptographicstrengthcanbevaried

Eachentryischainedtothenext Eachtransactioniscryptographicallylinkedtothelast,reducingfraud

ProcessAutomation ValueTransfer

Smartcontracts Cantransferdigitalvalue

Modularbusinessrules Cansimplyrecordassetordatainsteadoftransfervalue

Automationbuiltintoblockchainfunction Anydigitalrepresentationofasset


A blockchain network is a series of member nodes that substantiate the legitimacy of the

transaction and assign a new entry on the blockchain. This is a decentralized and distributed model

that allows for highly heterogenous application models in terms of how the blockchain might be

applied. One key example of an application model is a distributed ledger. In fact, blockchain is often

described as distributed ledger technology (Meola, 2017).

As an example, most companies today operate with their own private accounting ledgers and

employ standard double-entry bookkeeping. Security contexts are all separate for any environment and

risks to data are individualized to each party where fraud or other issues may occur. Any sharing of

data between companies is a challenge and can become a highly complex mix of programmable

interfaces between systems and companies (Figure 1).

Figure 1. Existing Accounting Infrastructure (IBM, 2016)

A distributed ledger with blockchain enables the transactions between various parties to be shared and

greatly simplifies an already complex series of transactions in any given supply chain (Figure 2).

Security is enhanced because each environment relies on the same distributed network setup and


cryptographic approach to secure the record data for the distributed ledger via blockchain. Once

entered, a blockchain record becomes immutable and therefore less subject to fraud. This provides an

independent level of trust between disparate parties to a transaction. Each party to the transaction gets

their own copy of the ledger and all ledgers remain constant across the blockchain network. As

transactions from various parties come into the network, the blockchain system cryptographically adds

them to all copies of the ledger once consensus across a majority of the nodes is provided. This

process leads to a consistent model of trust and legitimacy because a majority of nodes vote on the

legitimacy of the transactions while the cryptographic nature of the blockchain ensures that the record

being added is unique and added to the chain of previously encrypted records. Because the

cryptography of every added record is based on the encryption of records before it, inserting fraudulant

records remains extremely difficult. In this way, blockchain ledgers provide both trust and legitimacy.

Figure 2. Blockchain Accounting Infrastructure (IBM, 2016)

The value of blockchain, however, is extended once smart contracts and decentralized

autonomous organizations (DAO) are added to a basic blockchain ledger. Smart contracts and DAO


enable blockchain to minimize a great deal of bureaucracy involved in traditional transaction

counterparts. One example relevant to developing economies is the recording of a land title. The

process even in some of the most developed countries can be highly complicated, inefficient, and

plagued with roadblocks. A smart contract in conjunction with a blockchain ledger would automate,

speed resolution, and minimize potential difficulties in the sale or transfer of land. (Figure 3).

Figure 3. Before/After Smart Contract (Smart Contracts Alliance, 2016, p. 30)

From an accounting perspective, a blockchain ledger could be set up to finally enable triple-entry

momentum accounting instead the double-entry bookkeeping so popular today. Triple-entry

momentum accounting as envisioned originally by Yuji Ijiri enables companies to forecast the force at

which wealth accrues in a company (Ijiri, 1986). “Force” means the factors that are responsible for

judging the changes in earning rates and signifies the momentum of a company in terms of wealth

generation (Ibid., p. 745). The faster a company generates wealth is directly related to the earnings it

either accomplishes or expects. Income and balance sheets today only present a view of a company’s

health from historical data and accountants and investors use that historical data to forecast future

results with varying success. Conceptually, this is like driving a car down the road by looking in the


rear window (Henke, 1995). However, triple entry accounting would allow for a view which in

addition to the historical data also considers both present and even future information. The immediate

value add for blockchain is that information shared between various parties could provide triple-entry

accounting entries for companies, an entire industry, or even an entire economy.

Triple-entry momentum accounting uses statistical techniques like the Pearson correlation

coefficient in conjunction with known values to calculate the force at which a company is moving

financially (Melse, 2008). Owner’s equity is found in a company with the formula Owner’s Equity =

Assets – Liabilities. That can also be expressed Present = Past (traditional double-entry accounting).

Triple-entry accounting adds Present = Past = Future, or Capital = Wealth = Budget. Some items in

accounting like expected rent and hiring an employee imply future obligations and can be used via

predictive analytics to observe the momentum at which a company generates capital (Henke, 1995).

Double-entry accounting was not designed to function in this way and so an additional entry is needed

to provide the necessary input to the statistical analysis to enable better models in probability for the

financial momentum a company may experience.

Additionally, blockchain digital ledger technology combined with smart contracts and DAO

implementations means that better and more transparent forecasting of the growth and momentum of

companies, industries, communities, and even entire economies could take place in a way never

envisioned. Blockchain technology could provide more accuracy, more speed, more transparency, and

more efficiency in monitoring and managing economies and things like the Gross Domestic Product of

developing nations. These potentialities are why blockchain has also been looked at for cryptocurrency

use and there are even firms that are attempting to peg blockchain currencies to the International

Monetary Fund’s Special Drawing Rights in creating a global digital currency (Balvers & McDonald,

2017, p. 3).


So far, many cryptocurrency platforms are public, open, and permissionless. Bitcoin and

Ethereum are blockchain systems that are open for anyone and use a consensus protocol for

submissions or participation in the blockchain (Smart Contracts Alliance, 2016, p. 11). A consensus

protocol is a set of rules that governs how submissions are made and processed by the blockchain

(Ibid.). An additional issue with permissionless cryptocurrency is scalability. Given that anyone can

work with a platform like Bitcoin and it has become increasingly popular, scalability is a problem

inherent in the system. Bitcoin’s ever-growing use is creating difficulties in terms of handling

transactions and this design issue is a problem for any permissionless system that attempts to scale out

far beyond their original use (Marshall, 2017).

Private companies like banks, however, require a blockchain that is scalable, private, and

permissioned for use by clients or internal departments. Identity management and consensus protocols

in place can only be done with an administrative capability that is present with permissioned

blockchains (Ibid.). This is one reason why the open source Hyperledger blockchain environment was

created.

THEHYPERLEDGERMODEL Hyperledger started as an open source initiative to provide cross-industry support for

blockchain technologies that are secure, scalable, and enterprise grade. 183 companies sponsor the

effort worldwide including the Linux Foundation and IBM as well as industry leaders in finance,

banking, and supply chain management (Linux Foundation, 2017). The first release of the Hyperledger

environment took place in July of 2017 (Irrera, 2017). Although other blockchain efforts with similar


goals exist, Hyperledger is offered here as a model of blockchain technology that is supported by a

wide consortium of companies and organizations that may have more potential than strict business use.

Hyperledger offers a variety of open source frameworks and tools to fully implement

enterprise-grade blockchain digital ledger technologies (Linux Foundation). Several different types of

environments are made available to make Hyperledger a sort of Swiss Army Knife for blockchain

implementations. Nine different frameworks and tools already exist:

Hyperledger Sawtooth – A platform for developing and deploying distributed ledgers with a

consensus algorithm and proof of elapsed time built for large distributed platforms

Hyperledger Iroha – A business blockchain framework that emphasizes simplicity and ease in

adapting to existing infrastructure projects requiring distributed ledger technology

Hyperledger Fabric – An application foundation framework designed to develop modular

applications and solutions

Hyperledger Burrow – A permissible smart contract machine with a modular blockchain client

and built in line with the Ethereum Virtual Machine specification

Hyperledger Indy – A toolset providing libraries and reusable components for digital identities

for blockchain to allow for interoperability across administrative domains and applications

Hyperledger Cello – A platform designed to provide blockchain services on-demand to reduce

setup and management of blockchain environments

Hyperledger Composer – A collaboration tool for building blockchain networks to accelerate

the implementation of smart contracts

Hyperledger Explorer – A tool designed to view and deploy query blocks, transactions, and

associated data stored in the blockchain ledger


Hyperledger Quilt – A tool that provides interoperability between ledger systems for the

transfer of value between them (Linux Foundation)

In essence, a comprehensive permissioned blockchain environment can be built using the above

tools from Hyperledger or other similar platforms.1 While Hyperledger was originally envisioned as a

business blockchain environment, the technology itself is open and could be adapted for international

development, governmental, or other non-profit use (Strange, 2016).

BLOCKCHAINPOSSIBILITIES:HYPERLEDGERANDINTERNATIONALDEVELOPMENT An open source blockchain platform like Hyperledger is ideal when international development

is carried out with models like Asset-Based Community Development. Asset-Based Community

Development emphasizes that communities and organizations working together and with the

capabilities and assets of individuals, associations, and local institutions in mind. Relationships are

built among community members for mutually beneficial problem-solving that mobilize a

community’s assets for economic development and information sharing (Tamarack Institute). Once a

broadly representative group of a community is formed, a blockchain platform like Hyperledger could

be implemented to support asset-based local development in conjunction with outside partners and

international organizations wanting to help make a difference in a community.

1 Stellar (stellar.org) is a non-profit company that is also developing open source distributed ledger technology to facilitate financial inclusion for underbanked and unbanked people worldwide. Stellar is working on partnerships in Nigeria (Strange, 2016). However, the difference between Hyperledger and Stellar is that Hyperledger provides a complete open source platform design that is vendor and network independent, while Stellar requires use of their service platform and design for any co-development and use.


SOLARPOWERINDEVELOPINGCOUNTRIESWITHBLOCKCHAIN:APOTENTIALEXAMPLE For example, a blockchain platform like Hyperledger could leverage Asset-Based Community

Development to provide sustainable grassroots solar power in developing countries. The blockchain

solution could provide energy credits as blockchain transaction units through both paying an electric

bill and/or using the electricity. Some companies in the developing world are already providing a

similar technology through peer-to-peer networks that even allow for the trading of solar power

between individual customers (Thomason, 2017). In this instance, power usage would be tracked both

in a home and through business activity in the community regardless as to whether the consumer pays

the bill. Through tracking both use and payment, blockchain contracts and their accounting

information would provide a verifiable record of legitimate power capability back to the sponsoring

foundation and support organizations. An illustration of this potential project is provided below

(Figure 4).


Figure 4. How blockchain could be used in a solar power implementation. Blockchain measures and tracks power

generated, bills for use, and the social value across the organizations involved.

Just as airlines provide reward miles, social value could be tracked and seen in terms of all sorts

of measurable social impacts made possible by the energy supply of solar in the developing world.

Attaching the blockchain to achievements such as the number of women working in the community on

an ongoing basis or the number of children in full-time school could also serve to provide a cost-based

system to the economic and social benefits provided by the energy supply not previously measured.

This information would be very valuable for fundraising and accountability purposes in terms

of how the sponsoring foundation could provide verifiable proof for the good it was doing in providing

solar power in the developing world region. While narratives of success stories are certainly valuable

and help to raise money, having the social value quantified in a more sophisticated and socially

relevant way for funding partners via the blockchain would only strengthen the foundation’s capability

to raise money and operate an open source model for solar power in the developing world.

Foundation Special Purpose Entity

Support Org

Solar Installation

Metered Use Blockchain

Smart Contract

Home Power Usage

Business Power Usage

Service Blockchain

Social Value

Market Value


Having measurable and verifiable social value through blockchain technology could also be

attractive to its use by international organizations that might want to expand the work in the developing

world where energy services are needed and social value needs to be measured. The potential for

expansion and use is only limited by the extent to which social value can be mapped, quantified,

measured, and applied to the blockchain.

Blockchain technology could also potentially mitigate any currency risk that an energy provider

might have in a conflict region since the system could be set up to be valid only for communities.

Providing a decentralized implementation on a community by community basis makes it possible to

record use with blockchain systems of record until such time that a centralized monetary supply could

be reinitiated once peace in a conflict region is more permanent. Once a conflict is over and the

national government stabilizes, the blockchain could provide a record of use and the company could be

reimbursed through national insurance or some other method provided by the new government while

the people and communities retain their ability to use the solar power in the interim.

SCALINGOUTTHROUGHDECENTRALIZATION

Scaling up or replicating the efforts of this general design would look somewhat like the

Powerhive model though without the for-profit emphasis and without a need to adopt a company’s

proprietary platform due to the open source nature of Hyperledger (Powerhive, 2017). Powerhive

provides off-grid proprietary solar platforms in the developing world for rural homes and businesses

that enables financing, monetization, and management of these systems (Ibid.). In conflict regions,

there would be no reason to scale up in terms of making this project like a public utility since a

distributed, decentralized off-grid implementation of community by community would be preferred


instead of a nationalized solution. Replication could occur on a case-by-case basis using widely

available or easily manufactured parts and a service model developed by the support organization

referred to in Figure 4 above. Non-profit funding could occur on a case-by-case basis as each

community is targeted for solar services and that community could be highlighted in funding

campaigns in the United States and wherever else funding for such development activity might be

available. International development organization assistance may also be required to capably deal with

any political or other unforeseeable risks in implementing repeated projects in the developing world.

Potential "on-the-ground" partnerships with institutions like local universities would also provide a

potential link between project leaders and communities.

LOWERINGSTAKEHOLDERRISK

Stakeholder risk would be lowered by maintaining a non-profit transparent implementation

process of blockchain-based solar power where the interests of end-users are involved from start to

finish. Following Sovacool, the planning and implementation will be inclusive and community wide,

the program will be closely monitored with regular feedback intervals, accountability will be in place

for both local end-users and corporate stakeholders, training provided, and parallel systems should be

available through local and remote access to enable sustainability for the project overall (Sovacool,

2014, p. 27). An equitable division of both ownership and implementation costs could be handled by

allowing community businesses to pay for the bulk of the blockchain power services while maintaining

free access for individual consumers and homes. Training would also be paramount in providing a

local support matrix in the case that remote support is unavailable due to the challenges of living and

providing energy services the developing world (Ibid.).


The open source design and implementation process for a blockchain solution using a platform

like Hyperledger provides significant opportunity for local and remote stakeholders to contribute both

to the design and the implementation of the solar project on a community by community basis. The

distributed design of the solar project makes it more difficult for parties in a conflict region to

destabilize or work against the effort to provide energy to a community. Staged development offers the

region the ability to incrementally focus on building energy access across communities through local

and remote efforts at design and implementation of the blockchain solution.

The enterprise model gives the blockchain solar project the capability to appeal to a wide

variety of potential financing through non-profit giving and other non-financial contributions (like the

creative work of software developers). The socially responsible model of making sure funding does not

adversely affect poor users or stakeholders keeps the project from becoming a burden to the

community and thus exponentially increases its social value. Noting and dealing with the obvious or

foreseeable risks of any design and implementation makes the blockchain solar project stable overall.

Maximizing the project’s impact for social and economic value is accomplished through

providing blockchain technology to monitor usage of the system, provide for any potential billing, and

tracking measurable social value. Overall, the plan provided above details significant capabilities in

terms of providing a blockchain solar power solution to communities to increase the reliability and

usability of energy in the developing world. In this way, the blockchain solar project remains a

potential grassroots energy project that could be implemented with a platform like Hyperledger once

the above criteria, risks, and capabilities of stakeholders and communities are considered.


CONCLUDINGTHOUGHTS Like any new technology, blockchain provides new opportunities, great challenges, and even

unintended consequences (Healy). Already, some are grappling with the fact that one Bitcoin

transaction alone uses as much electricity as the average American household in a week’s time

(Malmo, 2017). In fact, Bitcoin miners use 24 terawatt-hours annually as they compete to produce

more Bitcoins. This creates a serious question in terms of the environmental and sustainability impacts

of blockchain technology and this is just one instance of a blockchain platform in view. In addition to

electricity consumption, Bitcoin is also responsible for excessive carbon emissions especially when

coal-based power is used to generate the computer calculations. Malmo indicates that every hour of

mining Bitcoin in Mongolia using coal for power results in the CO2 equivalent of driving a car over

125,000 miles (Ibid.). Bitcoin’s situation is somewhat unique due to its architecture because new

blockchain units come about through processing extremely compute intensive mathematical problems.

This is also why Bitcoin will have difficulty scaling to a national or international level were it to do

something like provide support for a national currency of any large size.

Other platforms like Hyperledger would use much less electricity and scale better overall since

they don’t generate blockchain units in the same way. Hyperledger doesn’t require highly compute

intensive mining of mathematical problems to generate a blockchain. For Hyperledger and business

systems in general, blockchain units will be cryptographically generated by accounting or other

business transactions without the need for mining. At scale, however, even platforms like Hyperledger

face potential performance issues and this is one reason why companies like IBM are focusing on the

use of mainframe computers to handle the load they foresee in using these platforms on a wide scale

(IBM, 2017). Mainframe computers provide performance advantages both for the encryption and the


transactional volume envisioned through wide-scale adoption of blockchain technology (Ibid.). So,

regardless of the kind of blockchain technology implemented, computer usage and power requirements

at scale should be a major concern of any future development using blockchain technology.

Overall, this paper has defined and illustrated blockchain technology and its current and future

use around the world. From the national currencies of Tunisia and Senegal to the shipping and supply

chain platforms of giants like Walmart and Maersk, blockchain is already being proposed or

implemented to provide technology services in a highly efficient and capable manner. Open source

platforms like Hyperledger will enable international organizations and communities to extend their

development in ways not previously thought possible. The ability of blockchain technology to change

the world for the better carries great potential and as a result remains an area of investigation and

research as the technology continues to mature.


DEFINITIONSBlockchain – a distributed digital ledger technology with a unique encrypted record identification that

allows for secure transactions on a computer network (Morrison, et al., 2016).

Distributed or Digital Ledger Technology – A database that is updated and held independently by

each node participating in a network. The data is created and distributed to the network independently

of the other nodes but each node on the network verifies and processes the new data. Once most nodes

accept the new data, it is added to the ledger as valid (Bauerle, 2017).

Smart Contracts – automated sets of rules that govern blockchain transactions and enable the

functionality of Decentralized Autonomous Organizations (2017).

Decentralized Autonomous Organizations (DAO) – an autonomous organization that exists to run

smart contracts as rules and functions as a single economic entity virtually independent of any

governmental organization (Bannon, 2016).

Hyperledger – an open source implementation of blockchain that is being developed by leading

companies for business to enable privacy, identity services, and a modular architecture that can

implement the technology in many different ways (2017).

Cryptocurrency – blockchain is used today in platforms like Bitcoin and Ethereum to enable virtual

currency and transactions online. This technology is typically what many people today think

blockchain is or is used for but blockchain’s potential goes well beyond applications like

cryptocurrency (Morrison, et al., 2016).


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