Reading Notes
Development projects conduct measuring, reporting and verification (MRV) processes measure the outcome and impact of projects.
Distributed ledger technology stores data batches in blocks on the network, and the need for independent verification from the network’s users makes the records transparent, secure, verifiable, and immutable, thus improving data auditability and reducing misreporting/fraud of data.
If we must identify the precise activity of a typical development project where blockchain technology can be leveraged, then it would collect and time-stamp project-level data for monitoring purposes.
The challenge is many resource-crunched development projects, especially in developing countries, still collect field data by hand, which can lead to inaccuracies, mistakes and fraud.
Local institutions in the developing countries that implement such projects often lack the systems to ensure the data they report is verifiable.
Blockchain can
- reduce the data risks of local-level institutions,
- improve the validity of the data they report for impact, and
- instill confidence in foreign private donors/investors to fund such development projects.
What this implies is more financing flow can be committed to the local level.
With blockchain enabling local projects to report verifiable performance as part of their MRV processes, local development institutions can gain a greater supply of capital.
The Amazon in Brazil is an example.
The Rainforest project uses blockchain and the Internet of Things to record and transfer data from electrical meters, robotic appliances and emission monitors on the environmental impact. Remote sensing satellites independently verify the status of patches, upon which blockchain smart contracts directly reward the farmers who preserve their rainforest patches. The outcome data is verifiable, and the exclusion of intermediaries while transferring incentives minimizes administrative costs and the siphoning of funds.
Blockchain-enabled MRV processes help disintermediate the intermediaries in a social or sustainability bond issuance, thus reducing issuance costs and making it possible for small enterprises to access the bond market or aggregate smaller assets into bonds.
Limitations: internet capacity and technology literacy.
Summary:
Blockchain’s revolutionary role in improving the MRV processes around data can mobilize more private capital investments for development projects executed by local-level institutions in developing countries.
Excerpt from article “Blockchain tech makes sustainable development goals more achievable” by Sourajit Aiyer and Jae-Hoon Kwak published on CoinTelegraph.