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ConsenSys puts up $50 million to hunt for blockchain solutions to global challenges

Blockchain, meet the 2030 global goals.

ConsenSys, an ambitious Brooklyn software company founded by blockchain guru Joseph Lubin, has launched a $50 million in-house venture capital fund to back startups turning the distributed-ledger technology on global challenges like refugee assistance, distributed energy, and supply-chain tracing.

Click for more from 2030 Finance

The firm employs more than 150 former bankers, management consultants, mathematicians, engineers and techies to build and support ventures developing new services and business models built on the blockchain. The new venture fund signals the firm’s intention to demonstrate the potential of the emerging digital transaction architecture to transform the lives of world’s poor.

“I believe resolutely in the 100-year mission of blockchain: to completely change the way society functions through decentralized technologies,” says Kavita Gupta, who was tapped to head the fund. A former World Banker and previously an impact investor at the family foundation of Alphabet’s executive chairman Eric Schmidt, Gupta told ImpactAlpha, “Blockchain is going to revolutionize the way we do business and use and share data.”

Blockchain already is opening up entire new avenues for social and environmental impact, says Gupta. Think about a Syrian family preparing to flee their home as war approaches. They’d have little time to collect their birth certificates and IDs, property deeds, education credentials and financial accounts. “If you lived in a country that used blockchain from birth, you’d have all of that information accessible and instantly verifiable when needed,” Gupta said.

Gupta says there are blockchain applications for nearly all of the 17 Sustainable Development Goals adopted by the United Nations, which aim to end poverty, guarantee universal education and much more, by 2030. “I’m a huge believer in the SDGs and have worked with the U.N. to boost them,” Gupta told me. “Blockchain is an architecture. It can enable solutions to almost any SDG.”

The potential of blockchain for good, and Gupta, will be center stage at the TBLI, for Triple Bottom Line Investing, conference in Stockholm September 28–29.

Distributed ledgers

Blockchain allows two parties to make safe and transparent digital transactions, without the need for a middleman. It’s often described as “a digital ledger” or decentralized database that records exchanges of digital assets like money, goods or property.

Just as email is one particular use of the internet, currency, Bitcoin for example, is one particular use of blockchain. Other applications developers are building for blockchain include digital identifications such as birth certificates, property records, education documents, electronic voting and a range of financial services including remittances. Roughly $20 billion, or 0.025% of global GDP, is held in blockchain.

Blockchain-enabled transactions reduce time and costs, ensure accountability and reduce fraud. Where distrust of governments, banks and companies is real and founded, and where people are in transit, Blockchain can be revolutionary.

“When I speak about it in the West, people say they trust Google, Facebook, or their banks,” says Vitalik Buterin, a Russian-Canadian programmer and co-founder of Ethereum, an open software platform that has allowed developers to build applications beyond currencies on blockchain. “But the rest of the world doesn’t trust organizations and corporations that much — I mean Africa, India, the Eastern Europe, or Russia.”

It’s not about the places where people are really rich, he says. “Blockchain’s opportunities are the highest in the countries that haven’t reached that level yet.”

Finance idealists

Lubin, a Goldman Sachs alum, has “a particular talent for peeling idealists away from their jobs in traditional finance,” according to Wired’s Morgen Peck.

The Consensys team page includes talent from Bank of America and Capital One, UBS, Deutsche Bank and JPMorganChase and other venture capital and hedge funds.

The latest to join up is Gupta, who has worked at the International Finance Corp, HSBC, and the World Bank, where she helped create the bank’s first green bond. Her most recent gig was investing part of the fortune of Alphabet’s Eric Schmidt in climate and human rights solutions through the Schmidt Family Foundation.

“Few people in the world understand, as Kavita does, what it takes not only to innovate, but to do so in a way that propels society forward,” said Lubin in statement.

An alum of MIT and the Media Lab, Gupta was awarded the awarded the UN Social Finance Innovator Award of the Year in 2015. Of blockchain, one of the latest financial innovations, she says, “We haven’t even begun to tap the depth of its social impact potential.”

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