The commercial begins with a man walking down the street, throwing cash into a garbage bin. Dollar bills are shown washing down a gutter, into a storm drain, and there’s even a beach clean-up scene, where volunteers are picking up stray bills and stuffing them into garbage bags. “What if we could turn trash into money?” the narrator’s voice says, before explaining that is exactly what the IBM Blockchain-based platform called Plastic Bank is doing, monetizing plastic trash by making it “…redeemable for everything from food to education.”
Plastic Bank is a non-profit company that has established “plastic offset” program that pays people in poorer countries — Haiti, the Philippines, and soon Brazil, Indonesia, South Africa, Panama, and India — to collect plastic trash and be paid for it. Originally, the program paid only in cash, but last year Plastic Bank began partnering with IBM to create a Blockchain “hyper ledger” that not only tracks what trash they’ve collected but also provides a digital wallet in which collectors can store their earnings.
Thus begins the fulfillment one of the promises that blockchain technology held since its inception but has never before delivered on so broadly: a way for people in poorer countries who have never been a part of the banking system and who live in places where it’s dangerous to hold sums of money in a safe and secure way and hence save. Collectors can receive their payment in cash, but Plastic Bank also enables them to use credit — something few have ever experienced before — to buy anything from cookstoves to school tuition. Plastic Bank calls its digital currency Social Plastic.
“If a family making $1,000 a year gets $60 from plastic, it’s a profound change in their lives,” Plastic Bank co-founder David Katz told Forbes magazine.
As impressive as this is, it gets downright mind-blowing when one considers its implications environmentally — a powerful, promising aspect of the Plastic Bank idea is what it reveals about the environmentally positive potentials of Blockchain.
“By enabling the exchange of plastic for money, items or Blockchain secured digital tokens, we reveal the value in plastic,” Plastic Bank’s website says. “This empowers recycling ecosystems around the world and stops the flow of plastic into our oceans. All while helping people living in poverty build better futures.”
Consider the implications of this. There is an economic term called “externalities” that represents, essentially, the black hole of capitalism. An externality is a cost or a benefit that is not accounted for by a market; put another way, it is a cost or benefit that affects a party that did not choose to incur that cost or benefit. In environmental terms, almost every negative impact of industrialism is an externality — from the loss of biodiversity to climate change to any kind of pollution at all.
These are costs not accounted for in the workings of markets (kind the marketplace’s way of saying, “Oops, didn’t see that one coming.”). In recent years, governments have tried to address this with ways of incentivizing positive environmental behaviour — gas taxes and pollution credits being the two most utilized methods. But these kinds of measures don’t really have the power to bring environmental externalities into the realm of supply and demand in a way that impacts the global marketplace and thus human behaviour on a large scale.
Blockchain does, and the Plastic Bank gives us how a very hopeful indicator of how this can play out. Cryptocurrency could represent capitalism’s missing link. Our children’s children’s children could very well look back at the days before currency became digitized as simple and rather dim-witted time — those days before the real costs and actual benefits of things were truly taken into account.