Blockchain is one of the leading topics globally, partly because it enables peer-to-peer transactions, anonymity, lower costs, and transparency, and partly because of its ability to make an impact in several industries. Increasingly, big companies are forming alliances and consortiums, committing significant resources to research and development, including the Hyperledger consortium, which comprises nearly 170 members, including IBM, Hitachi, Microsoft, FedEx, Intel, and JP Morgan.
Several countries are using and exploring blockchain technology in banking and financial services, supply chains, healthcare, agriculture, and more. In this article, we highlight the current landscape and future potential of blockchain technology in socioeconomics.
What is Socio-economics?
Socioeconomics or social economics is the amalgamation of economic activity and social behavior. In social economics, social factors are explained by using information from philosophy, history, politics, and sociology, and how economic activity affects social behavior and norms.
Some socioeconomic factors include social status, occupational background, family and local support, and education. Such factors determine the quality and longevity of our lives. For instance, employment and growth opportunities affect our lifestyles, housing, child care, and medical care.
Impact of Blockchain on Socioeconomic Factors
In recent years, blockchain technology and distributed database technologies have become the key technologies for distributed transactions, asset ownership, collaboration, and trustless economic transactions, creating economic systems that operate without people. It provides trust through technology and algorithms that decentralize the storage of information and are publicly verifiable, making it secure, immutable, and programmable to enforce business logic.
Here are some ways blockchain can make an impact on socioeconomics:
Better Privacy and Data Sharing
Business processes and costs are improved by using blockchain technology, mainly due to transparency in data sharing and efficiency. A key feature of blockchain is decentralization which enables data sharing between organizations and departments irrespective of their sizes using peer-to-peer networks and immutable digital signatures to facilitate easy, swift, and secure data exchange.
The technology also promotes self-sovereign identity, where individuals have control over their identities and who can have access to them. This opens up endless possibilities for improved operational efficiencies, better collaborations, and expanded revenue.
Achieving Trust in Social Business
Blockchain time stamps and hash functions help provide verifiable proofs and guarantee that these proofs are computationally secure, respectively. The algorithm-based trust model in blockchains can help companies in building trust with key investors to avoid legitimacy and governance challenges, leading to sustained business and sponsorships. The underlying cryptography ensures the authentication and integrity of data in the blockchain network without the involvement of any financial intermediary.
Innovative Business Models
The use of smart contracts can help settle compliance issues, improve business processes, and help make strategic decisions. Companies can experiment with different business models, based on insights from data stored in blockchain. This has the potential to improve customer engagement and boost revenue.
Further, the technology can also help improve marketing campaigns by tracking customer behavior and client information and building trust.
One of the sustainable development goals (SDGs) includes responsible sourcing and consumption. The use of blockchain technology can help trace materials and resources in a supply chain. This can assess the reusability or re-manufacturing of goods within its operations, which can bring forth new sources of revenue and reduce waste.
It can also facilitate a circular economy through the identification and monitoring of materials and components by leaving a trail of dynamically-updated information in the electronic ledger.
Let’s look at some companies that are already implementing blockchain technology in various aspects of socioeconomics.
Blockchain and Socioeconomics: Examples
Can future education happen on a blockchain? Definitely! A number of institutions use blockchain to store and share credentials and academic records, utilizing its record-keeping capabilities to help educators and administrators verify and share certificates when students transfer between schools.
The use of smart contracts, which are self-executing codes, helps create opportunities for learning, provides greater teaching efficiencies for educators, and assists students with ownership of their academic records.
For instance, Blockcerts is a blockchain-backed open standard that was developed jointly by Learning Machine and the MIT Media Lab to create, view, issue, and verify blockchain-based certificates. The platform can review the credibility of documents and detect falsified information via blockchain records and can also be used for storing academic achievements like grades, transcripts, and diplomas.
Data sharing among doctors, patients, and insurers is one of the biggest obstacles to healthcare. Blockchain technology, with its low-cost and decentralized way of managing information, can provide simultaneous access to a single source of highly encrypted data that is accessible by all parties involved in healthcare provision, and upon alteration of data, an audit trail is generated to ensure authenticity and accuracy.
For instance, MedicalChain manages patient records while ensuring there is a single true version of the data. It also lets people build applications on its platform to improve user experience.
Read more: How Blockchain is Impacting Healthcare
Blockchain implementation in food supply chains could have a significant impact on agriculture and food safety, which comprises actors such as food suppliers, aggregators, retailers, and the people who make the final sales of food in the market. Blockchain can assist in tracking inventory, provide an additional layer of security to farm management software, and provide a fair price to farmers through a blockchain-based marketplace.
The decentralized and immutable nature of blockchain helps facilitate the shift of power from central authorities to the participants, which includes vulnerable members of society. For instance, IBM’s IBM Food Trust maintains food supply chains through blockchain, helping it meet food safety protocols, temperature, and real-time data of food procurement.
As we witness blockchain technology transition from a cryptocurrency novelty to being used in different industries, we can say blockchain truly has the potential to transform our economic and social systems.