Blockchain for Social Impact (1)
This series of articles are for professionals and social entrepreneurs who work in the #humanitarian and social development fields with limited or inexistent knowledge of #blockchain and #decentralized ledger technologies (DLTs) .
If you are one of these people, just like me, you are surely acquainted with the lack of efficiency that affects many aspects of the international relief and development sector. These issues were addressed by the Humanitarian Grand Bargain agreement in 2016 that took place between some of the largest #donors and humanitarian organizations in the world committing to improve the effectiveness and efficiency of the humanitarian action to promote #transparency , collaboration and reduce duplication and increased cash-based programming for the humanitarian sector.
Six years have passed and nothing has changed mainly because most aid organizations still do business as usual.
Blockchain and other Decentralized Ledger Technologies have the potential to efficiently support these goals. A good example of their utility is the #UN World Food Program’s (WFP) pilot project in which it successfully implemented the technology to provide cash distribution for over 10,000 Syrian #refugees in #Jordan. By going around traditional financial intermediaries, using blockchain provided the WFP a 98% saving on costs of money transfer. We could only imagine the millions in savings that the organization would secure if it could scale-up those costs of money transfer.
What is Blockchain? Blockchain was first introduced in 2008 as the distributed ledger behind #bitcoin transactions. A blockchain is a type of database that is a #public ledger for recording transactions without needing a third party to validate each one. It is made up of data blocks that are linked together to form a continuous chain of immutable records. Each computer in the network maintains a copy of the ledger to avoid a single point of failure. Blocks are added in sequential order and are permanent and tamperproof.
Being distributed across a peer-to-peer (P2P) #network , blockchain and DLTs hold an advantage over traditional databases by democratizing data control and creating a decentralized and transparent alternative to traditional data management. This is because data cannot be overwritten or altered once validated and consigned to the blockchain, removing the need (and costs) for reconciliation checks and the risk of data loss.
Blockchain-based records can provide full traceability of duns and assets which would eventual conflict between parties that do not enjoy a big deal of trust.
Utility for Humanitarian interventions There is a wide range of opportunities for blockchain systems to improve humanitarian interventions. These include (but not limited to):
1- Cash and voucher distribution.
2- Innovative financing and funding.
3- Community currencies.
4- Audibility and monitoring & evaluations
5- Identity services.
6- Increasing data security, portability, and interoperability.
7- Natural capital and carbon tracking.
In the next article of this series we will have a closer look at each of the above utilities for the humanitarian field.