By Dr. Tauni Lanier
Originally published on LinkedIn
When thinking about the #SDGs and cryptocurrencies, one immediately thinks of ‘value’. What value? What is value? Do the SDGs attract their own value proposition? Can cryptocurrencies be used to get to the billions needed, for example, to fund Mumbai’s clean water systems? There is an institutional investor play as they have the billions! But, another way for the thesis to work; can a bridge be built between consumers, citizens, and institutional investors? There would need a lot of faith in digital currency to get there, but it is worth the endeavour.
I have written about the fundamental disruptive activities of a system entrepreneur on the SDGs, but what about funding the SDGs? Now to scratch below the surface, how to use Cryptocurrencies to fund the SDGs – the ultimate funding disruptor.
The international agreement that construes the SDGs, introduced the perfect storm, for innovators; financial markets, creatives, international philosophy, and political platforms. The structure of the SDGs gives tacit and explicit approval to do things differently – disrupt and innovate. This must be explored by the financial markets… up to and including the disruption of third parties intermediaries.
Disruptive financial modelling based on the SDGs is the perfect opportunity to disrupt and develop financial specific opportunities for the SDGs on the regional, international and city levels. The United Smart Cities is looking to explore every innovative financial corner to effectively fund the SDGs at the city level and guide the UN to a more innovative way of funding, which the SDG requires from all of us. If ‘no one is to be left behind,’ then we all must lead.
How about introducing a bridge between consumers citizens and institutional investors by encouraging the UN to explore an opportunity to develop a disruptive autonomic corporation supported by the robust capabilities of established UN agencies: group of investors intent on addressing the SDGs, business logic and using the UN as an original pool of capital. The UN, thus becomes a digital #token supplier. These tokens can flow to direct effects supporting collective projects.
The UN can thus also use its immense credibility to issue in prosperity and successfully support addressing the SDGs.
The data underpinning the SDGs and its’ targets is derived from credible and robust asset ledgers. These smart contracts can be mined to ensure and illustrate value which can back an SDG #cryptoasset. The UN data gathered by the #UNSD should be incentivised by the host, the UN, to track assets and debts. The UN is already set up to build and check the ledgers, suppling the robust background to the technology which would back a #cryptocurrency, removing corruption by an initial single ledger funnelled through the UN, ergo, adding to the trustworthiness of the asset.
This trustworthiness goes a long way to addressing the question; what is value? Transactions are peer to peer, trust based on collaboration. A notion that is central to the SDG, most notably SDG17.
The technology behind cryptocurrencies can transform the economy, the beauty of block-chains. On a very basic level, blockchains are swift, flexible, cheap, granular, efficient, have low transaction costs and are unhackable. It reduces uncertainty, facilities economic activity and links intrinsic value without a custodian. To be more clear:
1/ Lowering of uncertainty by exploring the identity of who is the counter-party: a technology solution of reviews/ratings/kite marks will aid in this endeavour. The cons focus on the technology, which is seen as fragmented and uses large amounts of energy. On the plus side, it is on a open global platform, any individual can be involved from any source, and it is user controlled to facilitate trade.
2/ Asset tracking, both of data and product, is an easy way to avoid tampering. This asset tracking can fit seamlessly into the UN statistics division [UNSD] current remit. The cryptocurrency aid in managing vendors across many supply chains; illustrating a shared reality across many non-trusting entities. Indeed, cryptocurrencies are robust enough to complete complex trades with added transparency.
3/ If there is reneging on a contract, there is automated intervention; as the smart contracts are binding and are guaranteed without the use of a third party enforcer. Bad actors will be collapsed and fall under automatic enforcement.
4/ Ending the custodian monopoly means ending remittance rip-offs, essentially disrupt the domination of third party organisations and the power of intermediaries – forcing banks and other financial institutions to develop new ways of supplying capital and liquidity. The value of cryptocurrencies is to easily solve the ‘leaky bucket’ issue; reducing costs, solve inefficiencies and eliminate corruption.
The reach of cryptocurrencies are ideally suited to raise funds for the SDGs. As regions that are not well connected to financial markets and in regions that have the resources, motivation, discipline but have no funding harvesting these resources to a mega-machine, the UN. Financially supporting the message of ‘leave no one behind.’ Essentially recording human exchange in a totally new disruptive way.