Do you need to build a blockchain? The survival guide for NGOs and charities
It starts like this or something close to it.
It’s a working breakfast/conference lunch/networking event — you know the type of thing. Your ED is part of a ‘horizon scanning’ conversation, someone turns to them and says ‘well of course you’re developing a blockchain, right?’
10 minutes later this email comes through…
TO: [all staff]
SUBJECT: Blockchain project kick Mon 9AM — BE THERE!
Don’t worry, we’re here to help. Here’s a flash guide to blockchain specifically for NGO and charity teams who are thinking about working with it and wondering if that’s a good idea.
Contents:
- What is blockchain?
- What blockchain is not?
- What are NGOs doing with blockchain and what could you do?
- Assessment: Should you be working on blockchain?
What is blockchain? (or ‘find out how to bluff your way through 99% of conversations on blockchain in less than 1 minute’)
The Guardian have a nice, succinct summary:
Blockchain is a digital ledger that provides a secure way of making and recording transactions, agreements and contracts — anything that needs to be recorded and verified as having taken place.
It’s a public and decentralised record of any set of interactions. Its security comes from the chain being hashed (a form of encryption) and decentralised (stored across the network of participants), meaning that if someone wants to hack the system they have to hack the entire network at the same time which at scale is practically impossible.
As a simple concept — a record of interactions — blockchain has huge numbers of potential applications, which can sometimes confuse the conversation. In the simplicity lies the complexity. As Digital Leaders have said “Anyone can create a blockchain, and the use-case for them is almost endless” (in fact members of the DEV team have created blockchains over lunch!). Think of it like the early days of the internet, we’re not even close to imagining all the ways blockchain could be used in the future — so be suspicious of anyone making statements that are too definitive.
If you’d like to dip your toes a bit more in the water of how the tech works, this explainer video from IFTF (2 mins) and this from Deloitte (8 mins) are a good place to start and this interactive exploration and visualisation of a blockchain is a fun way to pass a few minutes.
What blockchain is not? (or ‘how to sound smart in those other 1% of conversations on blockchain in less than X words’)
Blockchain is not…
- Bitcoin: Cryptocurrencies are just one use for blockchain. Bitcoin is just one cryptocurrency.
- Public (in a typical understanding): Yes the ledger is publicly available but you need to know what you’re doing to access it. Don’t expect your uncle who struggles with his smartphone to be able to query a blockchain anytime soon.
- Environmentally friendly: Blockchains are enormously resource intensive at scale and require huge computing power. Bitcoin mining alone used as much energy as the Republic of Ireland in 2017.
- Easy to plan around: The emergence of blockchain is part of a complex and still uncertain transition to a more decentralised internet, we simply don’t know what that is going to look like in practice. (Earn bonus jargon points by liberally sprinkling the phrase Web 3.0 into all your conversations).
- Universally popular: Bill Gates and plenty of others have sounded notes of caution around the rush to mainstream blockchain and cryptocurrencies.
What are NGOs doing with blockchain and what could you do? (or what to say when you hear ‘everyone else is using blockchain, aren’t they?’)
Some groups are developing doing interesting things with blockchain but we’ve yet to see a truly breakthrough use case in the third sector. The World Food Programme has used Ethereum to deliver food vouchers via the use of iris recognition scanners in refugee camps with the main aim being the reduction of financial processing fees.
A recent UNICEF project tried to recruit supporters to mine Ethereum for them. A little over one month into the project just over €9,000 had been raised which is likely a small ROI for the project but it is an interesting trial at taking advantage of supporters unused processing power.
One area that is certainly worth researching further is how blockchain could be used for publicly documenting situations where large numbers of people interact and transparency is currently an issue such as land tenure, property rights, birth records, and advocacy initiatives from public consultations to mass petitions.
On top of that, there’s a whole range of other applications from voting to music distribution that could be transformed by blockchain but we’re yet to see mass application in these areas.
Assessment: Should you be working on blockchain? (or ‘our ED wants a shiny new project, what do I do?’)
Adam Hopkinson from Truth has a simple guide for companies considering getting involved in blockchain projects:
Ask yourself can the business operate without a blockchain and ask yourself to thoroughly investigate why blockchain makes the business work better. If you can show why, you’re in business.
In essence, that’s the the outline of a three step decision process that translates for NGOs into:
Step 1: Do you need to use blockchain to deliver on your mission?
Step 2: If you don’t need to but think it will help, are you clear on the added value of blockchain?
Step 3: If you are, can you make a strong case for it by outlining some specific, measurable and realistic objectives?
On top of that, here are a further 8 questions all charities and NGOs considering blockchain projects should ask themselves:
- What are the specific affordances (what this tech can do that previous tech couldn’t) that can add to your work?
- Is the idea of a new, sexy project with a lot of buzzwords driving this project? Even partly?
- Does your team have the technical expertise and experience to properly manage a complex technology project?
- Is your organisation best placed to trial new technologies in your field? Are there others doing this who you can observe and learn from first?
- What is your organisation’s tolerance for risk on new projects? Can you try it out and ‘fail fast’ or will you be locked in to this project for years to come?
- How much can you afford to spend on this and could that budget be spent on other digital work more a proven ROI like optimising your donation process?
- What are the opportunity costs of working on blockchain? Remember that pilot schemes, even without financial investment, cost you in time, staff costs, and in terms of the other work you don’t do in that time.
- Has your org worked with emerging technology before? Do you have an assessment of how that went and what the learnings from that were?
If you’re thinking about using blockchain, you’ve answered all of the above and you’re still enthusiastic then you’re probably in a good place to test out the tech. If not, then the best route through might be to check the excitement, let others invest in the high risk early stages of blockchain for social good development, and then take it up when you have a clearer use case. Definitely not the exciting answer but it might just be the right one for you.
And finally, in case you’re wondering, no, civil society does not need it’s own cryptocurrency :)
- John Dunford is the Campaigns Lead at The Developer Society, a not-for-profit digital agency, working with NGOs and groups with a progressive mission to help make the world we live in a better place.
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