The Pando Tree, Blockchain Technology, and a Shared Core

In my previous article, I explored the fascinating (at least to me) connections between evolutionary strategy, entropy, and the cooperative business model. Just as the molecules that sustain life work to reduce entropy—preventing systems from descending into disorder—so too do cooperatives and credit unions. I’d like to take that idea further—a lot further—using the metaphor of the Pando tree to illustrate the potential future of credit unions and cooperatives on a shared core banking system.

The Pando tree, a single organism made up of over 40,000 individual aspen trees connected by a vast underground root system, is a living testament to resilience and cooperation. Its survival for tens of thousands of years is not due to standing as a solitary tree, but through the shared strength and resources of its interconnected roots. This concept of shared resources and mutual growth parallels what the cooperative movement could achieve in the future—especially with the implementation of technologies like blockchain. Credit unions aren't just businesses; they’re ecosystems of people working toward collective well-being of their communities. Yet, if we look around today, many still view this model as niche or even antiquated.

But, what if we’re simply at the beginning of a longer evolutionary arc?

A Vision of Credit Unions' Futures with a Shared Core

Imagine a future—perhaps beyond the next decade, or even our lifetimes—where credit unions and cooperatives are not just independent entities but are connected by a “shared core.” This core system is not managed by a central authority, but rather takes form as a decentralized, distributed system powered by blockchain technology, which facilitates trust, transparency, and resource sharing across a network.

And to clarify, this isn’t about cryptocurrency. While blockchain often gets associated with digital currencies, its potential goes far beyond that. Blockchain provides a secure and transparent way to share information, manage transactions, and maintain trust across a distributed network—without needing a central intermediary. For more information and knowledge about blockchain technology, I highly recommend that you check out the work of Lamont Black .

Think of blockchain as the Pando’s root system—a robust, invisible infrastructure that connects each individual tree while supporting the organism as a whole. In this vision, every credit union operates as a node within a blockchain-based system, capable of sharing resources, data, and innovations securely. Yet, importantly, each credit union remains highly responsive to the unique needs of its local members. Just as each tree in the Pando responds to its specific microenvironment, each credit union would be empowered to react and adapt to the specific needs of its local community, while still benefiting from the collective strength of the network.

Reducing Entropy with Blockchain Technology

In my previous article, I discussed how cooperatives are uniquely equipped to reduce entropy—combatting the inefficiencies and disorder that can undermine traditional business models. A shared blockchain core would elevate this strength by removing many of the inefficiencies that currently exist in the credit union system. Today, each credit union operates its own core banking system, manages its own data, and maintains separate processes. This fragmentation creates redundancy and limits the ability to scale innovative solutions.

However, it’s important to recognize that credit unions are already collaborating in powerful ways. Whether through loan participations, investments in CUSOs (Credit Union Service Organizations), or sharing strategies through networks like CUES , credit unions are no strangers to working together. They also frequently advocate on behalf of their members through America's Credit Unions and engage in forward-thinking research through the Filene Research Institute .

These existing collaborations are already laying the groundwork for a more interconnected future. But imagine the next level of cooperation, where instead of working together on individual projects, credit unions are connected through a common infrastructure. By embracing a shared blockchain core, credit unions could radically transform their operations while still maintaining their ability to uniquely serve their communities. Here’s how:

• Transparency and Trust: Blockchain technology creates an immutable, transparent record of transactions and interactions across the entire network. This shared ledger fosters trust among credit unions and their members, reducing the need for costly audits and third-party verifications.
• Shared Innovations, Local Adaptation: Blockchain would allow innovations to flow rapidly across the network. For example, a credit union that develops a new member service could share it instantly with others. But here’s the key—each credit union can choose to adopt, modify, or reject those innovations based on the specific needs of their local members. Just as each Pando tree responds to its local environment, credit unions in different regions could respond differently to market conditions, member preferences, or regulatory requirements, all while benefiting from shared insights.
• Security and Privacy: With blockchain, data is decentralized, meaning no single entity controls the entire system. This provides enhanced security and privacy for credit unions and their members, reducing the risk of cyberattacks and breaches.
• Scalability and Efficiency: By sharing a blockchain-based infrastructure, credit unions could significantly reduce operational costs and complexity. Rather than each credit union maintaining its own core system, they would all be connected to a shared, decentralized core—much like how Pando’s roots nourish each individual tree. This would allow credit unions to scale innovations and resources efficiently, while still retaining their local autonomy to serve their members effectively.

The Pando Metaphor: A Model for the Future

The Pando tree thrives not because it is a collection of isolated trees, but because it is connected at its core. Similarly, credit unions, by connecting through a shared blockchain infrastructure, could operate as a unified system while still maintaining their unique identity and mission to serve their local members. This interconnectedness would allow cooperatives not only to survive in a highly competitive global economy but also to thrive by offering a superior alternative to traditional, profit-driven business models.

Much like molecular biology reveals the interdependence of life at the microscopic level, blockchain technology has the potential to reveal the interdependence of economies on a macro scale. It’s a system built on contribution, not extraction—where resources are shared for the common good, rather than extracted and distributed to a few shareholders. Just as Pando’s root system provides nutrients to each tree, even in times of drought and stress, a blockchain core would distribute benefits across the entire cooperative network, allowing each credit union to focus on its own members’ unique needs while drawing from the collective strength of the network.

Challenges and Evolution: A Long-Term Vision

Of course, we must recognize that such a transformation will take time. It may be decades—perhaps even beyond our lifetimes—before this vision becomes a reality. Just as Pando has survived for millennia, weathering wildfires, droughts, and changing climates, credit unions will face their own challenges as they evolve toward this interconnected future.

Critics may argue that the cooperative model—and blockchain technology—are too idealistic, too complex, or too slow-moving to compete in today’s fast-paced, profit-driven world. But just as Pando’s survival depends on adaptability and resilience, so too does the cooperative model. By leveraging blockchain, cooperatives can create an adaptable, transparent, and secure system that reduces inefficiencies and withstands the unpredictability of the modern economy.

And critically, blockchain’s decentralized nature means that while credit unions will be connected, they will still have the flexibility to respond dynamically to their specific environments. Just like the Pando tree adapts to the specific conditions of each tree's location, credit unions will remain nimble and responsive to their members’ local needs.

While I may not live to see this vision in its fully realized form, I believe that the seeds have already been planted. Much like the Pando tree began with a single root, the cooperative movement is on a steady path of growth. Blockchain technology represents the next step in this evolutionary journey—a tool to connect, protect, and empower cooperatives worldwide while allowing them to maintain their unique strengths in serving their communities.

A Call to Action: Nurturing the Roots of the Cooperative Future

So, what can we do today to ensure this cooperative future takes root?

1. Invest in Blockchain Infrastructure: Credit unions must begin exploring and investing in blockchain technology—not for cryptocurrency, but for building a shared, decentralized core that connects and strengthens all cooperatives, while still allowing each to serve its community in a personalized way.
2. Collaborate Across Borders: Just as Pando’s roots stretch across miles, credit unions must collaborate across geographic and industry boundaries, sharing resources, knowledge, and innovations through a common blockchain system that supports unique local responses.
3. Embrace the Long View: Understand that this transformation will not happen overnight. It’s a generational project, but every step we take today adds to the root system, laying the groundwork for future generations to build a sustainable economic model.

Conclusion: Strength Through Connection and Local Adaptation

While the full potential of this vision may seem distant, the metaphor of the Pando tree reminds us that systems built on cooperation, shared resources, and resilience endure. Blockchain technology offers a way to create a shared core that connects credit unions and cooperatives, just like the Pando’s roots sustain its forest. However, the decentralized nature of blockchain ensures that each credit union, like each tree, can respond uniquely to its environment and members.

Together, we can build a cooperative ecosystem that reduces entropy, fosters resilience, and creates a more sustainable future—one that, while perhaps beyond our immediate reach, is well worth striving for.