2. Blockchain Technology

Blockchains can be designed either as private or public; while decentralization remains a common denominator to both forms, there is a key difference in the level of access granted to participants ^[6]. In the case of a public blockchain, participants are typically encouraged to join the network through an incentivizing mechanism, such as in the case of Bitcoin ^[7]; anyone can join the network and decentralization is pushed to the fullest extent ^[6]. On the other hand, private or permissioned blockchains are closed networks where participants face restrictions in terms of who can write data and who can read it. Hence, while public blockchains maximize the anonymity, permissioned blockchains know the identities of their participants and determine which information they should or should not have access to ^[8].

While perceptions suggest that public and permissioned blockchains are competing with each other, they have different offerings and could be rather complementary in terms of the solutions they offer ^[8]. Public blockchains offer high security, an open environment, anonymity, and no restrictions, whereas private blockchains prioritize privacy, high efficiency, and stability. We can argue that permissionless blockchains empower the user by pushing transparency and decentralization to their full extents, while permissioned blockchains empower enterprises instead of individual employees ^[8][9]. The convergence of public and private blockchains is expected to pave the way for virtual ecosystems where a wide range of players can collaborate in a secure and auditable way ^[10].

The question remains of which blockchain is better for which applications? Indeed, public and private blockchains have distinct use cases. In general terms, public blockchains address business-to-consumer scenarios, while private blockchains are more applicable to business-to-business relationships, with some shared infrastructure between businesses ^[9]. The transparency and security features of public blockchains make them more suitable for developing blockchain-enabled solutions serving larger communities where trust is a key concern ^[6]. They are a viable option in situations where all users should be treated equally and when the protection of users’ anonymity brings added value to the solution ^[9]. There are, however, some concerns about whether confidential data should be recorded on a public blockchain, assuming that the encryption could be hacked one day ^[6].

In the world of private blockchains, there are quite opposing concerns, since the players are reluctant to publicly share their business data. This is more appealing to financial institutions and corporations so they can know and predetermine who has access to what ^[6]. The downside though is that trust comes down to the credibility of the authorized nodes, as well as a relatively higher vulnerability to malicious attacks ^[6]. As blockchain technology keeps evolving, hybrid solutions could perhaps offer the best of both options by bringing together trust and security alongside efficiency and speed ^[6]. Given the current momentum in adopting blockchain applications across a large spectrum of industries, blockchain technology can only increase in popularity as the world enters the uncharted territories of the “new normal” in the post-COVID-19 era, where technologies are poised to play an extremely important role in redefining “business as usual”.

3. Tokenization

Special importance is given to “impact tokens”, which represent a group of tokens designed to unlock investments for projects with positive social and environmental impacts ^[11]. The deployment of these impact tokens in blockchain offers new mechanisms to improve ESG ratings, as it offers proof that a particular investment has delivered a positive impact ^[12]. A key advantage of tokenization is that it offers traceability across the supply chain ecosystem. In this regard, token-based incentive schemes should further broaden the accessibility of blockchain-based solutions for sustainable development, in alignment with UN SDGs. Furthermore, as suggested by Uzsoki and Guerdat ^[11], the UN or other international bodies could facilitate the adoption of impact tokens by setting common standards that set out both their characteristics and achievement of SDGs.

Supported by UN World Food Program, Fishcoin is a blockchain-based data-sharing platform that incentivizes catch registration and data-sharing across the seafood supply chain ^[13]. Data contribution to the blockchain platform is rewarded by tokens, which can be exchanged for mobile phone credit. Amply, a pilot project in South Africa that has been funded by UNICEF Innovation Fund and Innovation Edge, tracks school attendance by providing children with self-sovereign digital identities on the blockchain. When a teacher confirms attendance on a mobile application, a token is generated that the school can redeem for further subsidies. Moeda is a blockchain-based cooperative banking system that leverages on a fiat-pegged digital token. The Moeda initiative facilitates access to finance to unbanked and underbanked entrepreneurs, whereas impact investors are able to keep track of their investments.