WHAT YOU WILL READ: What is blockchain, where it came from, is being used and what is its connection with impact solutions.
I need to confess that a few weeks ago I had no idea what blockchain was about. No, I’m not a specialist in this field and subject, after all, my business is to support and manage impact solutions to ensure they happen, multiply and bear fruits in real world! And believe me, this is no small thing (lots of work I mean)! But after all, why did I get into this story then? Because in the past few weeks we have been covered, bombarded with information about crypto-coins and how these transactions have been made without the presence of a central bank (or any equivalent organization), how they are changing the world, that people are investing making and loosing money, how its currency is similar to a rolercoster in a short period of time, how financial and monetary authorities in Brazil and elsewhere have been trying to organize this ” Mad Hatter´s tea party” situation… So, inevitably, I would had to bump into this blockchain “guy”- which at first glance sounds more like a new super special homemade beer or a brand of a medicine for intestinal tract … Why inevitably, my dear reader? Because it is through the blockchain that the transactions of the criptocoins happens! But calm down! Take a deep breath and do not despair that I’ll start this story from the beginning.
ONCE UPON A TIME
It was once in the not so distant year of 2009 (to be much more exact, on January 3 of that year) was officially born Bitcoin, a totally digital currency (without availability in paper), of global reach and that is not controlled by governments or institutions. There is no central bank, mint, private money funds, in short, no entity behind Bitcoin’s negotiations or transactions. She had been presented the world in an article published in 2008 by Satoshi Nakamoto with the title “Bitcoin: The Peer-to-Peer Electronic Cash System – and to make this story even madder, you know what the author it looks like it’s an Avatar, a code name that hides either a person or a group of people! “You’re going to say you did not give a movie script!” (stay tooned Holi/Bollywood guys!)
It turns out that Bitcoin is a Peer-to-Peer (P2P) network. This means that all the transactions are managed by each one of the users who are part of the system, in a “together we will prevail” style! Thus, when a user makes transactions the computer (or any other mobile device he/she is using) that is used for this task starts to participate in a network through their cryptocoin portfolio. If a “node” or trouble exits from that network (no matter the reason), other users continue to keep the system running. If there were central control, it would suffice if it was dropped for the system to fall to everyone.
If there is no centralized system, how is the distribution of cryptocoins made? How are transactions performed and validated? This is where our main character, the blockchain comes in! A public record that gathers all the information needed to process and protect the transactions you made – now you understand why listening to cryptocoins would lead you to discover blockchain!
The blockchain is a database, but not like any other regular database: it is a system that works with a tamper-proof and very efficient information record . It is, moreover, a distributed database that does not have a central manager nor intermediaries of any kind
The blockchain is a database, but not like any other regular database: it is a system that works with a tamper-proof and very efficient information record . It is, moreover, a distributed database that does not have a central manager nor intermediaries of any kind. Therefore, it is a system that needs to be trusted exactly so that it can securely allow transactions made directly – without the central authority, without the middleman. Briefly and simply the blockchain is a chain of information blocks and records of any and all transactions, records made on a system, both the previous and the subsequent.
To add to that, these blocks of information are also public: all network users and system participants have access to the information, all of them! However, when processed, the blocks can not be deleted or changed. In addition, new registrations can only be made through a validation process. This block system, being distributed, is on thousands of computers, so when a (legitimate) update is made, all copies are synchronized in a matter of seconds. It may even be that one or two computers fanish from the network, but this will not affect the system because all other users are inside the network, as well as all the information.
THE FINANCIAL SECTOR AND BEYOND!
With these characteristics all our beloved blockchain character, who began to be thought of with focus in the financial sector and in monetary transactions by the criptomoedas, of so interesting, caught the attention of other sectors and companies. After all, it was clear to everyone that they were following its emergence and use, that it can be used in other types of systems: commercial, governmental, electoral, copyright, international cooperation and so on. It is no wonder that banks, insurance companies, stock brokers, security companies, governments, development banks, NGOs, government agencies, networks, political parties and so many other institutions have become “blockchain-groupies” and are following our friend more than Brazilian when they are watching primetime soup opera!
(…) helping to develop solutions and ways to use blockchain for other purposes: those conncected with impact solution to deal with social and environmental challenges and opportunities of the world! – after all, the impact curation has been an incredible task of connecting the dots, people, organizations with the main purpose of making Ideia de Impacto solutions and partners to happen in the real world!
But what, after all, does a person who works with curating, mentoring, and deploying impact solutions has to do with bitcoins, criptocoins and blockchain? First of all, I need to state that my purpose and focus stays the same: find and get in contact with the people who are experts and are helping to develop solutions and ways to use blockchain for other purposes: those of the impact solution helping to develop solutions and ways to use blockchain to deal with social and environmental challenges and opportunities of the world! – after all, the impact curation has been an incredible task of connecting the dots, people, organizations with the main purpose of making Ideia de Impacto solutions and partners to happen in the real world!
Assim, caros leitores, termino esse primeiro texto com alguns exemplos do uso potencial do blockchain como uma ferramenta de impacto – ou blockchain de impacto como chamei no último Programa Ideia de Impacto dessa semana na Radio Geek (checkout YouTube Ideia de Impacto channel to watch last week Program broadcasted by Radio Geek – subtitles in English available):
Social Investment Business: social impact investment can be open to a broader public, including private funds and resources with high investment capacity (including publicly traded and listed on the stock exchanges). Something like financing or collective kitty, but with smart contracts that bring more security and can generate the payment of profits to the investors.
Demonstrating results and impacts of projects and initiatives: Increasing data collection through blockchain would also help in measuring and accurately assessing investment outcomes – one of the biggest challenges facing companies, foundations, institutes and organizations in Brazil (and in other regions of the world as well)
Exchange and sale of renewable energies: Generation and exchange of surplus energy produced are already being used increasingly in several countries (Australia, South Africa, Lithuania, USA, among others) where companies realize block-based solar energy exchange allowing owners of solar panels to sell and exchange their surplus with their neighbors, generating income and moving the economy.
Safe Use of Personal Data: Blockchain allows secure and private data storage in distributed and decentralized applications that, at the discretion of the user, could instantly be transferred to financial institutions, insurance companies or healthcare professionals.
Data collection (Big data): Our ability and capacity to generate, collect and process data has grown exponentially, generating the well known”big data”. This process has led to issues related to data privacy, responsible use of information, human rights issues. By having a platform for trading and exchange (whether by currencies, tokens or other incentives) organizations, entities, companies will have to create mechanisms and incentives to ensure the continuous collection of information from their customers or key audiences for their business, research actions, etc. .
These are just a few early examples of the impact blockchain. In the coming weeks I will share with you more information and examples of impact blockchain from a report published by an important American university. Wait for the scenes and emotions of the next chapters – or posts to be more precise!