I’ll just come right out and say it. If someone ever asks you, “Can I tackle that problem without a blockchain?” just give them a confident “Yes!” At its core, blockchain is like a fresh take on maintaining and exchanging data—simple yet innovative! There are a bunch of clever ways to stash and swap data around! So, what’s the deal with blockchain, and what’s the connection to tackling climate change or making equitable transactions?
To kick things off, I like to think of a blockchain as just a special list, as I explain in this article. If you’re a CS geek picture a Linked List at the back of your mind. If you are an artist, consider it similar to a string of beads. The twist here is that you can only add to this list. So, in CS-speak, you can only have insert operations, i.e., unlike a normal LinkedList, there aren’t any delete or modify operations. In art-speak, you can only add beads to the chain; you cannot remove or change beads that have already been added.
In other words, once something is added to a blockchain, it cannot be removed. This data can be anything we want it to be. It could be a contract or a friendly agreement between two individuals like us! Or a record-keeping tabs on transactions like swapping something valuable, be it goods or even money.
The standout feature of blockchain is its knack for enabling direct transactions, cutting out the intermediary who usually acts as an official transaction facilitator. Let’s say you want to send $20 to someone outside the United States - in Asia or Africa. My own experience has shown me that this is one of the most challenging endeavors. The US bank that issued the check might not have terms of engagement with banks in Africa or Asia. Even if it does, both the US bank and the recipient bank will slap on extra fees that are way more than $20. This whole deal is a head-scratcher – why fork over $50 in fees for a $20 transaction?
However, such transactions are made feasible without needing an intermediary like a bank thanks to blockchain-based alternative currencies like bitcoins. However, it need not be restricted to bitcoins. Remember, we said anything of value. So, it could be carbon credits or incentive points to turbocharge sustainable behavior— all of which can race ahead without the hassle of agreements, paperwork, or those cumbersome intermediary fees!
In a future article, we will explore the world of fintech enabled climate change!
References:
Goldberg, M. (2024, August 1). How much are wire transfer fees? Bankrate. https://www.bankrate.com/banking/wire-transfer-fees/
Hayes, A. (2024, October 6). 10 Important Cryptocurrencies Other Than Bitcoin. Investopedia. https://www.investopedia.com/tech/most-important-cryptocurrencies-other-than-bitcoin
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