Blockchain technology and SDGs

Blockchain technology was developed by Satoshi Nakamoto in 2008. It is one of the emerging technologies that organisations are trying to implement into their systems and workplaces. At its core, blockchain is a decentralised ledger of all transactions across a peer-to-peer network without a need for a central clearing authority confirming transactions. Blockchain has many advantages over current database systems, such as increased efficiency and transparency, reduced costs, and immutability.

Organisations can build blockchain systems together and share information that does not need to be stored multiple times in separate databases. Data is stored in nodes that are cryptographically encoded, so they cannot be hacked, and can only be accessed with the use of a private key that works to decode the information. Blockchains add nodes, containing transaction data, to the chain constantly, through computing power. It allows digital identities to exist in a safe, convenient, secure, and practical manner. One of the areas where this technology could be used is sustainable development. The current conceptualisation of sustainable development has extended more widely to the needs of society. With its original focus being economic growth only, it has expanded to be economically viable, environmentally friendly, and socially equitable.

Personal identity

The United Nations-led process, involving civil society, national governments, and other actors, adopted 17 sustainable development goals (SDGs) and 169 targets in 2015 with an expectation of achieving those targets by 2030. Hunger, poverty, inequality and environmental degradation continue to affect millions of people globally. Many people are also affected by a lack of personal identity, lack of access to healthcare or quality of healthcare, and lack of quality education.

People in the developed countries do not need to worry about being able to prove their identity. At birth, their names with the required information are documented and associated with national identity numbers, such as social security numbers. However, some less fortunate people, mostly in the developing countries, do not have this kind of privilege. More than 1 billion people in the world do not have proof of identity. When people cannot prove their identity, this creates difficulties in multiple areas throughout an individual’s lifespan. Some examples of those difficulties include creating and owning a bank account, purchasing property, getting social services and government subsidies and participating in global markets. Not having proper identity limits what individuals can do throughout their lifetime. That is why identification management could be the first step of achieving the SDGs.

Burdensome paperwork, expenses and lack of accessibility prevent many people from being able to partake in traditional identity systems, such as those run by centralised governments. Blockchain technology brings a new level of efficiency, trust and accessibility to the concept of identity management. Since about 50 percent of the world population already has smartphones, they can participate in digital identity systems using their own devices. In the near future, a majority of people in the world will have access to smartphones or such kinds of digital devices. If some people do not have access to such devices, governments may provide some assistance to those individuals. Thus, the implementation of blockchain technology may not be difficult from the technical standpoint in identity management.

We can use blockchain technology to achieve most of the SDGs. First, it could make a significant change to the health and wellbeing of citizens by improving the distribution of medications and other health-related supplies. In the case of the developing countries, problems exist in the quality of medical products. Additionally, supply chain security is a big challenge. The nature of blockchain can offer significant benefits where parties can ship and monitor health-related products relying on blockchain’s immutability and transactional integrity to assure improvements in health and wellbeing.

Second, the attributes of blockchain could also deliver benefits in the areas of quality of education, gender equality and reduced income inequality. Financial and logistical commitments to quality education, gender equality and reducing inequality from public and private authorities would be nested within smart contracts between all parties. Third, contracts relating to the development of infrastructure required to assure clean water, sanitation and energy. It could be managed via blockchain technology ensuring fraud is minimised and higher levels of trust is developed between the parties. These factors can lead to greater levels of sustainability in cities and communities where blockchain-based contracts can integrate sustainability requirements as an integral contractual component.

Fourth, low-paid workers and migrant labourers are exploited by middlemen and third-party suppliers globally. The immutable nature of blockchain and transparency of transactions can cause wage protection and reduce exploitation amongst workers. This transparent and trusted approach could accelerate ethical moves toward industry innovation and fairness to exploited workers. Fifth, peace, justice and strong institutions can also be strengthened by blockchain technology where the integrity of institutions and their directions can be absorbed within blockchain solutions. The benefit of this is enhancing trust by affected parties and impacted citizens due to the immutability and disintermediation aspects of blockchain. These aspects could reinforce faith in public institutions and directly impact peace and justice within communities.

Some challenges

Finally, partnerships for the goals can be achieved by utilising the smart contract elements of blockchain. Any agreements in the determination of the SDGs between all parties can be managed effectively. All incentives and partnerships developed between countries and organisations can be achieved via blockchain technology. However, there are some challenges in the use of blockchain technology. It requires digital infrastructure that leads to a huge amount of investment. Likewise, it requires a cultural shift from paperwork to digital work. To do that, gaining trust or confidentiality from citizens may take time. Lack of skilled manpower could be another challenge, at least in the short run. Finally, the use of blockchain technology demands the change of many existing laws, regulations and policies. It might take time to address those issues and bring desirable changes.

Overall, blockchain technology supports achieving the SDGs by reducing economic inequality, gender inequality and poverty; promoting peace, justice and strong institutions; and increasing partnerships for the SDGs. In the context of Nepal, the use of blockchain technology could be a game-changer attribute not only in the case of achieving the SDGs, but also in reducing corruption and increasing transparency and accountability, mainly in the public sector.