Using Blockchain for Impactful Giving
As Givers look for ways to be more impactful, we need to consider how technology can play an integral part in progressing social causes. Today there is an underlying feeling of uncertainty that philanthropists have when they donate to a cause, whether it be time, money or any other resource, these donations are difficult to track and account for. Items and funds can be lost in a system or be so targeted that the Giver is not able to see impact beyond the direct recipient. However, using technology such as blockchain can reshape this perspective and expand the ways in which we see contributions benefiting society.
Blockchain is a decentralized, distributed network of records or ledgers simultaneously posting un-editable transactions between unknown or known parties. Blockchains can be public (permissionless) where all transactions between parties are known, not only between the players themselves but also to anyone interested in viewing the actions that have occurred. Or they can be private (permissioned) where only the parties that have agreed to act together are privy to the details of the transactions. The former does not require trust between the participants while the latter requires a high degree of it. There are also hybrids of both public and private distributed ledgers which looks to leverage the best of both.
In any case, the immutable recording of transactions allows one to confidently track the flow of assets and actions. It is within this visible flow a Giver can see where or to whom her resources are flowing. For example, the UN’s World Food Program took a proof-of-concept live by designing and implementing a blockchain system that enabled 100,000 Syrian refugees in Jordan to buy food by simply scanning their eyes. This system has proven to be so effective in reducing costs and improving process efficiencies, the WFP is now looking to scale the program to 500,000 beneficiaries. The echo effects of this inspires the imagination. For example, could we track the food that is bought and come to some conclusions about how this might impact the health of the beneficiaries? How can we use the recording of blockchain transactions to help prevent or stem the outbreak of disease in crowded refugee camps and create even more of a positive impact to society?
While the opportunities for blockchain are encouraging, we must recognize there are gaps in public and private blockchain platforms. For public blockchains, gaps can arise due to the reliance on miners to validate every transaction that is presented for posting. This codependency consumes significant amounts of energy and limits scalability, resulting in slower completion times. However, these challenges are well known and solutions such as new validation methods to speed up processing and increase scalability are being modeled. For private blockchains, gaps can arise due to the fragmentation caused by entities using differing platforms to record transactions and due to the risk of impact associated with hackers breaking into the network. The first challenge could be solved if there is one private platform, however everyone would have to agree to which one and this could be up for debate for some time. The risk of a network hack could be mitigated by increasing the confirmation requirements for validating posted transactions or by limiting the rights of who can access information. Regardless, gaps and challenges inspire solutions and competition for solutions inspires innovation.
Blockchain gives us the opportunity to truly see where resources are improving a person’s life, family and community and this insight will create incentives for Givers to give more and create space for new Givers to participate. The social fabric of the future weaves transparency, authenticity and deeper connections together and blockchain can be one of the seamless technologies to help drive this.
Kim Martin is a Vice President and Liquidity Solutions Specialist at Bank of America who provides strategic advice to global enterprises. Being one to always question and search for truths, Kim became a believer of blockchain technology when researching its potential. She believes that blockchain, AI and other opportunistic technologies will externalize our consciousness and personalities in ways we have yet to fully understand and appreciate. She was born in Seoul, South Korea and has lived in several places across the United States. Kim enjoys anything that gives her a deeper connection to people, cultures and ideas.