Blockchain revolution comes to world of humanitarian aid
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Blockchain, the technology behind the cryptocurrency Bitcoin, is taking root in a sector far from finance: the world of humanitarian aid.
By offering refugees a virtual identity, reassuring donors that their money is being well spent, or rushing funds where they are needed most, aid charities are experimenting with the technology in the hope that it can improve their work.
“We are at the very beginning. There is a lot of hype,” said Christopher Fabian, leader of Unicef’s Ventures Fund, which invests in open source technology solutions.
At the end of 2017, Unicef – the UN agency dedicated to protecting children – brought together Russian-speaking blockchain experts in a meeting in Kazakhstan.
The goal? To develop a “smart contract” that would facilitate transactions between the organisation and its numerous partners for deliveries and payments, if certain conditions were met.
“It totally failed, but we learned a lot from that and will do the same challenge this year in Mexico,” Fabian admitted, adding that he could envision a host of future projects using blockchain for the “social good” – even if most of them will fail.
But the UN gency is thirsty for innovation.
Its French office has also launched an operation dubbed “Game Chaingers” (for blockchain), which challenges tech geeks and gaming enthusiasts to install on their computers software aimed at creating Ethereum, a virtual currency, to help Syrian children.
“There is a lot of hype,” said Christopher Fabian, leader of Unicef’s Ventures Fund, which invests in open source technology solutions.”
Blockchain allows users to create and spread information across a large network of computers, which its proponents say lends it both transparency and security. And the applications for the technology are multiplying quickly.
For aid and development groups, blockchain can come in all shapes and sizes.
Aid donors could, for example, trace their contributions as they spread across an organisation. The platform Disberse, supported by a network of 42 humanitarian groups, already road-tested this application by tracking money sent by a British association to four schools in Swaziland.
In theory, the technique can reduce transaction costs, fight corruption by making everything transparent, and allow a better record of where food aid is directed, or make sure that medicines are not counterfeited.
Those in charge of programmes that directly send money to people in need also see it as a way of more easily controlling the disbursement of funds or avoiding use of financial intermediaries such as banks, which might also take a cut.
“In the old days, we were delivering aid at the back of the truck,” said Alex Sloan, a consultant at the World Food Programme’s Innovation Accelerator, which works with startups and others to help fight hunger.
“Now, we are moving towards distributing cash to our beneficiaries, in the form of actual cash, through vouchers, e-cards, etc.”
Questions & Answers
Q.What primary benefits could blockchain offer aid charities and donors?
What primary benefits could blockchain offer aid charities and donors?
Blockchain could help by providing refugees with virtual identities, reassuring donors that funds are used appropriately, and swiftly directing money where it is most needed. It can also enhance transparency and security for all transactions and information.
Q.Which organisations are experimenting with blockchain technology for humanitarian aid?
Which organisations are experimenting with blockchain technology for humanitarian aid?
Unicef, specifically its Ventures Fund and French office, is experimenting with blockchain. The World Food Programme's Innovation Accelerator is also involved, and the platform Disberse is supported by a network of 42 humanitarian groups.
Q.What was the outcome of Unicef's initial attempt to use blockchain for transactions with partners?
What was the outcome of Unicef's initial attempt to use blockchain for transactions with partners?
Unicef's attempt in Kazakhstan to develop a 'smart contract' for transactions completely failed. However, the organisation gained valuable lessons from this experience and plans to try a similar challenge again this year in Mexico.
Q.How could blockchain specifically improve the process of distributing money to aid recipients?
How could blockchain specifically improve the process of distributing money to aid recipients?
Blockchain could allow for easier control over fund disbursement and help avoid financial intermediaries like banks, which often take a cut. This moves away from traditional aid delivery towards more direct cash or e-card distribution to beneficiaries.
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