When the internet was brand new, not many people understood what it was. This was the internet pre-Google, pre-email—pre-websites!—when computer scientists tried, excitedly, and not always well, to explain the potential of the “internet protocol suit,” the protocols that made it possible to build a network of networks—a “world wide web” of information. Few, then, really grasped how transformative this technology would become. And today, two decades later, we again have a brand new, poorly understood technology—a platform upon which enormous changes to the way we live our lives will be built. This platform is blockchain, and its potential has just begun.
So, what is blockchain? In the same way you can think of the internet as a network of networks, and a means to transmit information, you can think of blockchain as a network of databases, and a means to transmit value—even trust. Blockchain consists of a series of databases—the “blocks”—that are saved in an unalterable series—the “chain.” Blockchains aren’t saved in one place, rather, they’re saved on many computers, across an entire network. And each object saved as blockchain carries with it its entire ledger history—the history of every transaction associated with that object, be it currency, like Bitcoin, or identification verification, or even the titles to land, capital, or a business contract. And because every blockchain carries with it its entire transaction history in an unalterable format—and saved as duplicates throughout a decentralized network—blockchain is both much more difficult to hack than a centralized database (like a bank), and there are no intermediaries between parties—so for the first time, finite assets, like money, can be transferred electronically person-to-person, without a transactional middle man, like a bank or PayPal.
But why should we care? And what difference does this mean for farmers, agribusiness, and agricultural development?
Across the world, 70 percent of the world’s people lack proper title to land holdings. In countries from Honduras to Greece, records about who owns what are hard to come by, and in some places, corruption can play an outsized role in how those incomplete records are interpreted. But if those records were kept on blockchain, those records would be clear, easily accessed by all parties, and kept in numerous, dispersed digital duplicates, making tampering all but impossible. The full ledger of that title’s history would be baked-in to that land title, with full transparency. It wouldn’t matter if you were wealthy or poor—what was yours would be unequivocally yours, no matter the capacities or trustworthiness of local or regional record keepers.
So what does that mean?
It means even the smallest of smallholders would have title to their assets that would be recognizable across borders and to any financial institution. Those assets could be leveraged as collateral towards loans and payments. Loans and payments could be synced to individuals, who could have a blockchain financial ID: a verified, tamperproof financial identity. With a mobile phone—and access to the wider world—that ID would automatically be valid to anyone, anywhere; your net assets would be clearly deeded to you, your net capital value clearly defined.
The ramification for this kind of baseline transparency is beyond giving bank accounts to the unbanked. Blockchain can turn the unbanked into lendees, into entrepreneurs, into business owners, and even investors. Products, food, and medicine could be verified as authentic—and since each blockchain contains the full ledger of its entire history, it would become exponentially more difficult to counterfeit medications and agricultural inputs. Small and medium enterprises the world over would have access to capital like never before, while simultaneously receiving the kind of universal recognition needed to operate within national, regional, and global markets.
All of this, made possible by establishing a universal, tamperproof baseline; a baseline of trust, and of facts, that cannot be altered by interlopers, governments, or outside interests.
But these are examples about what blockchain could accomplish. For some services, like money transfers, blockchain is already upending the market.
By some estimates, remittances—money sent back home to developing countries by family members working abroad—are the single largest flow of money from the developed to the developing world: some $600 billion dollars are transferred as remittances annually. Often this money is sent through a company like Western Union. A significant percentage of the money sent is kept as a service fee—think 10, even 25 percent—and the money arrives days later. One company, Abra, is reinventing the way this works using blockchain. With Abra, you can use your bank account to buy blockchain-backed money. This blockchained money can then be sent, over your phone, from you to someone else, anywhere in the world, with no intermediary. If you’re sending money to the Philippines, where Abra does most of its work, the recipient can even hail a “mobile ATM”—people working for Abra who drive around major cities in the Philippines—who will exchanged the blockchain money on your phone for actual cash. The service fee is about 2 percent, and happens within minutes.
On remittances alone, lowering the service fee from 10 to 2 percent puts an extra $48 billion in cash into the hands of those on who need it. And that’s just remittances—imagine the impact this can have on aid, business investment, and the financial services sectors of developing countries. It’s a change to the way things work, in par with the invention of the internet. It’s no hyperbole to say blockchain is poised to change everything.