Contributed By Till Wendler, Co-Founder of peaq network and Vineet Budki, CEO of Cypher Capital
In recent years, a growing number of aspiring entrepreneurs have embraced the concept of social entrepreneurship, driven by a desire to challenge the prevailing norms and create a more equitable and sustainable world. Coinciding with this trend is the emergence of the Web3 movement, which offers a compelling platform for these individuals to realize their vision. Currently, with many new technologies on rise, the enormous potential of blockchain has been highly accentuated, labelling it as a powerful tool that can impact entrepreneurs to disrupt traditional business paradigms and drive meaningful change.
Ending Surveillance Capitalism
For all its boons, companies currently seek to adopt a business model that Harvard professor Shoshana Zuboff has aptly called Surveillance Capitalism. The term encompasses the process of collecting and commodifying user data by businesses. It is an approach that allowed household names like Facebook and Google grow into the juggernauts they are today, while also having garnered significant criticisms over the years.
This concept essentially boils down to utilizing a user’s digital identity and the access to personal data that comes with it. As of today, our digital footprint is scattered across various services and siloed databases, which work as honeypots for hackers while also enabling intrusive hyper-personalized ads and other questionable tactics. By establishing a self-sovereign identity through blockchain, the technology offers an alternative approach to the status quo, enabling the users to take ownership of their online identities and personal data as well as protecting them by powerful cryptography. Some of the leading businesses, including Bosch, who is leading the EU-funded moveID project that will use decentralized IDs as the cornerstone of connected mobility, have realized the significance of this strategy and promotes its ethical use. Social entrepreneurs may use this model to build decentralized identity frameworks that empower people and develop a new paradigm where privacy, autonomy, and ownership are crucial.
From Corporations to Communities
Another paradigm shift in today’s business practices is that most blockchain initiatives enable users to take control of the process rather than viewing them as passive recipients of services at the provider’s discretion. This encourages greater diversity and eliminates the power disparities inherent in conventional corporate models. For example, in a Web2 ride-hailing app, both drivers and users are subject to the whims of the algorithm, which may significantly reduce or raises prices. On a Web3 stack, the ride-hailing dApp would operate at a significantly lower fee and the community would be able to vote on its policies and review the smart contracts that underpin its business logic.
Decentralised physical infrastructure networks (DePINs) using blockchain and tokens to crowd-source physical infrastructure, such as VPN servers or electric vehicle charging stations, take this concept even further into the real world. They enable communities to own the infrastructure that serves them and enter markets that a traditional provider would deem unfeasible. This pave way to a larger transition from corporations to communities, where economic relationships are formalised as executable code available for anyone to inspect and run in a ‘trustless’ manner, without the need for a central service provider to set the rules. Blockchain gives customers ownership over all infrastructure networks as well as services like food delivery and e-scooter sharing, regardless of whether the assets are digital or physical.
Transparency For All
Last but not least, as a technology, blockchain spearheads a push for an entire new level of observability and transparency. With every block linked to the previous one and every pseudonymous transaction recorded on an open ledger, you can trace the provenance of every coin down to the very moment of its creation, or minting. From complete transparency of its underlying algorithms and business logic that prevents unfair practices and abuse, to absolute clarity of cash flows, blockchain enables greater compliance and financial cleanliness. Verifiable supply chain management is the most obvious and frequently mentioned use case in this regard, where every step along the way would be cryptographically confirmed on an immutable ledger. However, there are other applications as well. Immutable carbon footprint tracking data paired with automatic on-chain offsets, verifiable use of charity funds, and other similar features substantially increases the transparency of a socially conscious business and make its impact visible, measurable, and verifiable.
In an era characterized by the rise of impact entrepreneurship, the Web3 movement and blockchain technology present unprecedented opportunities for those seeking to effect positive change. The potential benefits of blockchain for impact entrepreneurs extend beyond specific niches, enabling a broader transformation of the entire business paradigm. As impact entrepreneurs embark on their journey to reshape the world, they should recognize the potential of blockchain technology as a powerful tool to drive fairer and more sustainable change.
