How decentralized technologies are converting philanthropy and NGO work.
If you have any rente ter latest events, you can&rsquo,t help but notice bitcoin&rsquo,s meteoric rise ter value. Just overheen a year ago, on January 1, 2018, one bitcoin wasgoed worth about $1,000, by the end of December 2018, its value had soared to more than $14,000. The digital currency has also suffered from wild swings, however, losing a third of its value ter July 2018, then reaching a high of almost $20,000 ter late 2018, and then falling shortly below $Ten,000 on January 17, 2018. But the technology at the heart of bitcoin and other digital currencies (also called cryptocurrencies) may, te fact, have the potential to drive profound social influence and convert the social sector along the way.
Thesis currencies are built on a breakthrough technology called &ldquo,blockchain.&rdquo, A blockchain is essentially a digital ledger of online transactions linked and secured by cryptography, and stored on a peer-to-peer rekentuig network. Updates occur te real-time&mdash,ter blocks (or groups) of transactions&mdash,without interference from or control by a central authority. A blockchain doesn&rsquo,t permit users to switch ended transactions, and all users can see the transaction history. This technology is titillating, because the transparency and security of gegevens stored ter a blockchain facilitates trust and efficiency inbetween users te an unprecedented way.
However many people associate blockchain technology solely with cryptocurrency transactions, it can be used to record any type of exchange&mdash,for example, property sales, audit gegevens, voter identification, or supply chain origin. Blockchain can also enable automated governance or regulatory compliance&mdash,for example, it could permit people with solar panels to automatically sell tens unit to their neighbors. Te terms of its development, blockchain is te its early days. Only 0.Five procent of the world`s population is using blockchain, while more than 50 procent of the population has access to the Internet. And much like the Internet, wij expect to see an explosion of users and usages overheen time.
Using Blockchain ter the Social Sector
The application of blockchain and digital currencies te the social sector is just getting commenced, but at least five vooraanstaand use cases have already emerged:
1. Philanthropy and international aid
To expand fundraising opportunities, a number of charities and foundations are accepting bitcoin and other cryptocurrency donations from donors directly. They exchange cryptocurrency donations through an online wallet for dollars or other fiat currencies at the going exchange rate. Te addition, a handful of organizations have created customized &ldquo,charity coins&rdquo, to raise money for specific nonprofits or social influence projects. Donors can buy Clean Water Coins, for example, to help fund the work of the NGO Charity:Water. Other examples include Root tokens, issued to fund anti-poverty work projects, and impak coin, created spil an influence investing mechanism. To date, such specialized charity coin offerings have raised anywhere from a duo of thousand to more than a million dollars each.
Digital currencies and blockchain have also spurred a movement for greater transparency te aid. For example, the BitGive Foundation has launched an initiative called GiveTrack, which permits bitcoin donors and the public &ldquo,to trace nonprofit transactions on a public toneel ter real time to see how funds are spent, ensure they reach their final destination, and track the results generated from contributions.&rdquo, The United Nations World Food Program (WFP) conducted another proefneming ter aid transparency, providing Syrian refugees based te Jordan with digital currency vouchers to trade at selected markets. WFP used the verhoging to successfully transfer $1.Four million to more than Ten,000 people, eliminating the dangers of carrying specie, and talent the organization a more effective and less expensive method for distributing and tracking payments.
Thesis fresh applications are even supporting private sector charity donations and tracking. China&rsquo,s e-commerce conglomerate, Alibaba, has developed a unique blockchain donation system called Ant Love. Established last year, Ant Love can record the donations from any of Alibaba&rsquo,s 450 million users, permitting them to donate to various charitable groups and NGOs. The system also lets donors track their transaction histories, and better understand where and how the organizations they fund are using their money.
Some organizations are using blockchain technology to reduce the cost of remittances transferred across borders by migrant workers, which total about $440 billion annually&mdash,almost three times the amount of international aid provided to developing countries each year. Presently it is estimated that at least $32 billion te remittances is failing to reach recipients, due to high transaction fees associated with sending and receiving money internationally.
(Photo courtesy of the World Canap)
The remittance service Abra claims to lower transaction fees by 90 procent. Already active ter 155 countries, Abra converts money into bitcoin, transfers it across its blockchain toneel, and lodges it ter a local currency on the other end. Anyone&mdash,including the unbanked&mdash,can make a transfer via smartphone.
Other services like BitPesa and Rebit also use blockchain technology and bitcoin, creating affordable global remittance systems. Using BitPesa&rsquo,s remittance toneel, for example, transaction fees for individuals and businesses range from 1 to Trio procent, spil compared to the up to 20 procent charged by established money transfer companies. Ter addition, a transfer that might normally take up to a week can occur te one day.
Trio. Identity and land rights
According to the United Nations, one te every five people globally lacks a legal identity, and the rates may be even higher for refugees, who often have to flee all of a sudden. The World Identity Network and Humanized Internet project can store identifiers such spil birth certificates and university degrees on a blockchain, ter the form of distributed digital lockboxes. Users can keep their information private and secure, but also give permission for anyone to access it anywhere te the world.
Meantime, Project Amply is building a digital identity and subsidy management system on the blockchain for schoolchildren te South Africa to substitute an outdated paper system. Children (and their guardians) privately own and control their digital identity and private gegevens. The system tracks the delivery of development services, and investors and service providers can use the gegevens to better target their support. It also saves administration time and costs, and provides previously unavailable information about how and where schools and social service providers are delivering services.
Another groundbreaking use of the blockchain is for securing land ownership rights. Proof of land ownership is a challenge te many parts of the developing world, where inequalities ter wealth and power relations makes the rural poor and others less able to establish their property rights, and fend off land grabs by governments and corporations. One organization, Bitland, is piloting a project ter Ghana to provide services that permit individuals and groups to survey land and record title deeds on a blockchain, thus providing a voortdurend and auditable record. Bitland also acts spil a liefdesrelatie with the government to help resolve disputes.
Several governments, including those ter Dubai, Estonia, Georgia, and Sweden are making early forays into blockchain-based approaches to securing property rights.
Four. Governance and democracy
Government and civil society can also leverage blockchain technology to strengthen democratic processes and participation. Blockchain systems such spil Ballotchain can manage online elections with secure and anonymous voting that participants can verify at any time. The system ensures that voters cannot vote twice or commit electoral fraud, thus ensuring the integrity of election processes.
Another interesting application of blockchain te the governance space is peer-to-peer voting (not through governments) and the capability to transfer one&rsquo,s vote to another trusted party anywhere. A blockchain-based app called Sovereign, is one such enabler of so-called &ldquo,liquid democracy.&rdquo, The creators of the contraption, Democracy Earth, see blockchain spil an chance to establish a fresh form of global governance that transcends national borders and fully establishes democracy spil a universal human right. This wishful thinking is already te play through a blockchain-based nation state called Bitnation.
Go after My Vote is a startup using distributed ledgers to run voting processes and prevent identity theft. One of the significant advantages of voters using blockchains like the one underlying Go after My Vote is that users can verify voting choices at any point te time.
Ukraine is already experimenting with blockchain to support secure and verifiable local elections. Implementation has embarked te a duo of towns using E-vox, a blockchain toneelpodium designed specifically for local elections.
Five. Environmental protection
Ter the environmental kampplaats, fresh blockchain-supported supply chain management systems, which are semitransparent but cannot be tampered with, can track products from the farm to the table, and voorstelling whether or not a food product is organic or Fair Trade. The startup Everledger has uploaded unique gegevens on more than 1.6 million diamonds on a blockchain to determine the provenance of diamond products and help control the flow of &ldquo,blood diamonds.&rdquo,
Ter another example, work is underway to create a translucent global database on coral reefs. This would add to the figure of skill global scientists need to protect reefs from harm. Unlike a standard web-based database, the repository is fully secure and not managed by any organization or intermediary.
Challenges to Overcome
Despite the promising nature of blockchain, it is still a youthful technology and presents a number of challenges. For one, it relies on complicated authentication algorithms and cryptography. And while users do not need to be blockchain experts, ter the same way that browsers and applications help users engage with the Internet, implements based on the technology sorely need more human-friendly interfaces. Few are truly user-friendly and ready for large-scale adoption.
Te addition, the application of blockchain to social challenges is from time to time over-hyped, and solutions are sometimes pursuing problems, with technologists rather than sector representatives driving development. Spil a result, social influence organizations and those they serve are sometimes taking a back seat ter determining the relevancy and suitable application of the technology. Even when the social sector takes the lead, they may not have the resources or technical abilities to bring their ideas to fruition.
Another challenge comes from the immutable nature of blockchain. If a disagreement arises inbetween two parties involved ter a transaction, there is no way to go backward, modifications require that the network create an extra record (or block) to confirm a switch. If individuals cannot agree on a switch, they are stuck with the original agreement, forever. For example, what happens if a blockchain-based land deed transferred from a landowner to a poor farmer inadvertently fails to include a portion of the parcel being exchanged? If the landowner denies to make switches to the agreement, then there would be no recourse for the farmer. This is the downside of a lack of intermediaries, a clear governance structure, and a fully human-integrated system. Clearly there is a need for more standards, rules, and best practices.
Ultimately, for social sector organizations utilizing bitcoin and other digital currencies, the market is very volatile and largely unregulated. It is not unusual for cryptocurrencies to sway Ten procent or more te value ter a single day. Anyone active ter the cryptocurrency kampplaats needs to have a strong tummy for risk, particularly those relying on stable funding flows.
While wij would be well-served not to get too swept up by the hype, NGOs and philanthropies should start learning more about blockchain&rsquo,s unique capabilities and help form the field. There are many more potential opportunities than the ones mentioned above, including the use of blockchain for influence monitoring and measurement. Thesis applications and others could help remake the field and provide powerful fresh benefits to both organizations ter the social sector and their beneficiaries.
Wij already see significant investment of time and resources by a broad range of organizations. Thesis include the Bill and Melinda Gates Foundation, Unicef, the World Handelsbank, private companies like Consensys, and collaboratives like the Blockchain for Social Influence Coalition. The combination of large-scale rente and investment will drive further development and innovation te the sector.
One significant next step is the creation of a central figure to help surface fresh solutions, and guide blockchain and digital currency application ter the social influence sector. There are also many questions to response about how blockchain will intersect with the Internet of Things and artificial intelligence (a entire other conversation). While wij should encourage experimentation across the houtvezelplaat through the usual innovation labs, hackathons, investments te social entrepreneurs, field-based projects, and collaborative-building, the field could also benefit from a coordinating bod. Ultimately, wij need to devise fresh standards and best practices so that wij can better infuse the human factor into fresh technology solutions that hold tremendous potential to address social and environmental issues. Fortunately, the building blocks are already there.
David Lehr (@dlehr00) works with a diversity of organizations to maximize their social influence. He also trains innovation, finance, and entrepreneurship at the University of North Carolina and at Hult International Business Schoolgebouw.
Paul Lamb is the principal of Man on A Mission Consulting, and an entrepreneur with deep expertise ter business, nonprofit management, technology, and public policy. He has consulted to dozens of nonprofits, foundations, and companies on achieving their social influence goals.