Transformation Design In Blockchain

Dominik Olech
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We live in truly fascinating times. We have access to almost infinite goods, and the world finally seems to be within reach of our hands. But is it really so perfect?

Bitcoin, an initial implementation of the blockchain, was intended to overthrow the old, centralized monetary systems. However, the idealistic vision proposed by Satoshi Nakamoto is still far from being realized. Why hasn’t this mythical adoption of the cryptocurrencies come yet? And does blockchain have a chance to change our lives?

Modern problems

We all probably agree that blockchain technology was a revolution in many fields. The potential of decentralized chains of information is tremendous, and potential usages may change our lives forever. However, no matter how brilliant blockchain looks, it is only a tool after all. The way how this tool is being used depends on the person who holds it. As for now, the primary usage of the blockchain lies in financial technology. Around the world, it is mostly associated with cryptocurrencies.

Instead of changing the old, centralized financial system, cryptocurrencies became just another element of it. Perceived mainly as an investment target, they are far from being used in the way Satoshi designed the Bitcoin. But they aren’t the only aspect of blockchain. And it appears that this technology still has many things to say in the context of resolving our life problems.

Design a better future

The approach which may change the perspective for the blockchain industry is called a transformation design. This term refers to a more human-centered process of developing new solutions for society instead of the classical capitalistic approach oriented on financial profit.

This name may seem unfamiliar to you, but it has widespread use around the world. Every attempt to resolve social problems or change undesirable behaviors might be considered as the transformation design. And since it is a strongly interdisciplinary process, the blockchain technology also takes part in it. Let’s look at some examples.

Venezuela’s case

The first example of using blockchain in a human-centered way that I want to share with you comes from Venezuela. This crisis-struggling country has already an infamous history card linked to blockchain, called Petro. This governmental-issued cryptocurrency was intended to attract foreign capital, and eventually, become widely accepted money in the country. But it has failed, and the Venezuelan crisis only grows stronger.

A profit-oriented Petro isn’t a solution designed for people struggling with crisis. The cryptocurrency exists mostly on paper and is far behind the reach of everyday citizens. And the list of their problems is still expanding. The most significant one is galloping inflation, which was the reason why Venezuelans opened up to Bitcoin and other cryptocurrencies. For them, Petro was just another symptom of government failure.

However, using Bitcoin as an actual currency depends on one thing: electricity. Unfortunately, Venezuela is running out of this resource too. To overcome this problem, Venezuelan Randy Brito designed a solution that allows conducting payment without an Internet connection. Hardware designed by Brito’s Locha Mesh initiative enables commerce shops to receive transactions even during a blackout.

The solution is still being tested, but its potential is huge in the Venezuelan situation. It also shows how different should be human-oriented approach from the governmental one.

Eco mining

This topic of Bitcoin energy efficiency was raised already on Blockchain24.co a few weeks ago, but it is still very actual. Although it’s hard to tell how much energy is Bitcoin network using, the scale of the mining process is big enough to consider this as a problem. One could talk about energy consumption in other industries, but the Bitcoin case is still an important subject to discuss. It is also most suitable for the transformation design process since it concerns the ecological issue.

In this particular case, it is necessary to find a way to decrease the amount of energy needed to maintain growing cryptocurrency networks (maybe the Bitcoin is the most prominent example, but we shouldn’t forget about other coins’ blockchains). The solution proposed by the industry was changing the consensus mechanism. Widely used proof of work might be replaced by more energy-saving solutions that don’t depend on computing power.

But since blockchain exists only online, it will always need some sort of energy to be maintained. The natural candidates for resolving this issue are renewable energy sources. An excellent example of this approach is the Layer1 company, focused on providing wind-powered mining in West Texas. However, such sources of energy are still underrated by society, and full adoption of them is maybe an even further future than the crypto adoption.

Smarter city

The last example where blockchain technology could contribute to resolving social problems is related to the idea of the “Internet of things.” This concept mostly refers to an environment in which every electronic device is interconnected and can react in an intelligent way. 

The idea is mostly associated with the smart home concept, but some designers go even further and try to introduce it into urban areas. Blockchain technology is an excellent addition to this concept. The decentralized network provided by this technology may shorten the reaction time between the system elements to an absolute minimum. 

Such implementation was proposed by the Ford company, which installed the blockchain-based system in their hybrid vehicles in Cologne. Whenever the car enters low-emission zones, the installed plug-in will switch to electric-drive. With this solution, Ford became an official partner of the SmartCity Cologne project. 

These are just a few examples of how a blockchain can be used to solve people’s problems. This technology provides wide possibilities for improving our lives. Let’s hope that crypto industry will follow the idea of transformation design more frequently.

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