Blockchain and sustainability

I have a new article out from the sustainable blockchain technologies SBT project, lead by Susanne Köhler who also carried out the largest chunk of the empirical analysis, with supervision and contribution from me and Prof. Joseph Sarkis.

First of all, the SBT project was about investigating the sustainability of blockchain tech with a critical lens and attitude, trying to cut through all the hype (and scam) that is around it.

The project had a broad scope and you find the details and outputs here.

One of the aspects about blockchain is that…everybody working on it claims it’s “good” and many go one step further to say it will contribute to a sustainable development.

But will it?

Firstly, there are a lot of projects out there on blockchain for sustainable supply chains and similar who are only a facade with no real substance.

Additionally, research on sustainability of and from blockchain-based technologies in supply chains is currently underdeveloped.

Existing studies explore and identify what potential benefits blockchain technology in supply chains could bring, they do not address in-depth how such positive impact will be reached. And this is what we tried to figure out in this study.

Problem is, there is no data about the performance of blockchain applications in supply chains. Most of them are in early stages. So we selected a number of actual real-life projects and talked to their developers.

The main results are:

  1. We introduce and define the concept of a blockchain-enabled system: a system of technologies that uses a blockchain platform to securely manage supply chain data and connect supply chain actors. This is a direct follow up of a previous study of ours showing how blokchain technologies are in fact a system of interconnected technologies.

  2. We derived several possible impact pathways for a blockchain-enabled system to create positive impact and identified four main mechanisms underlying the impact pathways: (voluntary) market mechanisms, plausibility checks, smart contracts and tokenisation, and peer-to-peer trust.

This is important because shows exactly HOW blockchain techs create positive impact. This is also what developers should focus on - if they care about materialising this impact.

What we were not able to answer:

  • We did not measure these impacts. For most developers, it is too early to do that. The problem is that the same developers have no or vague plans to implement system to measure the impact of their (blockchain-enabled)systems . We argue they need to start.

  • As I mention above, blockchain is only one element in a system of technologies. How can we separate and single out its contribution to the positive impact from the impact of the other techs? We could not in this study, so it has to be for further research.

And that is also why we titled the paper “Unfinished paths”, because there is still much to do to understand the impact pathways of blockchain techs.