by Shailee Adinolfi
By now you’ve read at least one article on the potential of blockchain, as well as the challenges in its current form. USAID recently published a Primer on Blockchain: How to assess the relevance of distributed ledger technology to international development, which explains that distributed ledgers are “a type of shared computer database that enables participants to agree on the state of a set of facts or events (frequently described as an “authoritative shared truth”) in a peer-to-peer fashion without needing to rely on a single, centralized, or fully trusted party”.
Explained differently, the blockchain introduces cost savings and resource efficiencies by allowing data to be entered, stored and shared in an immutable fashion by substituting the need for a trusted third party with algorithms and cryptography.
The blockchain/Distributed Ledger Technology (DLT) industry is evolving quickly, as are the definitions and terminology. Blockchain may not solve world hunger, but the core promises are agreed upon by many – transparency, auditability, resiliency, and streamlining. The challenges, which companies are racing to be the first to address, include scale (speed of transactions), security, and governance.
It’s not time to sit back wait and see what happens. It’s time to deepen our understanding. Many have already begun pilots across sectors. As this McKinsey article points out, early data from pilots shows strong potential in the Agriculture and Government sectors, amongst others. The article indicates that scale may be as little as 3-5 years away, and that’s not far out.
The Center for Global Development’s Michael Pisa argues that the potential benefits of blockchain do not outweigh the associated costs and complexities right now. He suggests that the development community focus its energies and resources on bringing down barriers to actual implementation, such as standards, interoperability, de-siloing data, and legal and regulatory rules around data storage, privacy and protection.
One area where blockchain may be useful is Monitoring, Evaluation, Research and Learning (MERL). But we need to dig in and understand better what the potentials and pitfalls are.
Join us on September 5th for a one-day workshop on Blockchain and MERL at Chemonics International where we will discuss what blockchain offers to MERL.
Register here, and stay tuned for a series of posts introducing some of the topics that we will cover.