How cryptocurrencies can make transparent disaster relief really work
Telcoin is partnering with mobile money platforms to enable efficient “airdrop” of cryptocurrency relief to geo-fenced disaster areas.
With three months remaining, 2017 has already seen unprecedented damage wrought by a seemingly endless stream of natural disasters. From hurricanes in the Caribbean to flooding and landslides in South Asia, thousands of lives have been lost and thousands more have been displaced without adequate food or shelter. Millions of dollars have already been pledged to Hurricane Harvey relief efforts in Texas, for example, but it’s difficult for those compassionate enough to donate even a small amount of money to know exactly where it goes and how it’s helping those in need.
Take the American Red Cross (ARC) — a popular outlet for disaster relief donations — which raised a staggering US$488 million for the 2010 Haiti earthquake. After taking a nine percent “administrative cut,” the organization was ill-equipped to provide more than blankets, hygiene kits, and temporary shelters — certainly needed in the immediate aftermath, but not to the tune of half a billion dollars’ worth. Two years after the disaster in Haiti, which claimed between 100,000 and 300,000 lives, the ARC struggled to explain why it had spent less than a third of Haiti donations on actual relief efforts in the stricken country.
The immediate and transparent nature of blockchain-based transactions using cryptocurrencies could change the way disaster relief efforts support vulnerable populations across the globe. Bitcoin and Ethereum are already being used to aid Syrian refugees and Texas hurricane victims.
For all of the benefits that cryptocurrencies can offer for humanitarian relief, questions remain around how to distribute the coins and how recipients can easily spend them. Blockchain startup Bitnation is helping distribute aid to refugees by issuing blockchain relief IDs and visa cards. While this is feasible in a refugee camp setting, it’s difficult to know where the next natural disaster will strike.
Telcoin is offering an innovation solution to the distribution and usability problem by partnering with existing mobile money platforms. As it turns out, a huge percentage of those most vulnerable to natural disasters are living in countries which actively use mobile money.
Individuals and organizations would be able to buy and donate Telcoin online for immediate distribution to the mobile money accounts of everyone with a mobile phone in a geo-fenced disaster area. Even in the poorest corners of the world, the vast majority of adults today have mobile phones, and almost all mobile money platforms support even basic phones using text message and USSD transactions (smartphones not required).
To prevent fraud, distribution could easily be limited to mobile users who had activity in the geo-fenced area within the month prior to the disaster. Telcoin has already developed the geo-fencing and fraud prevention software, and has pledged to waive transaction fees for disaster relief transfers to allow 100 percent of donated funds to reach those in need.
In the world of cryptocurrency, the concept of “airdropping” coins generally refers to equally distributing coin to all members of a particular set — for example, everyone in a particular geography or everyone possessing a particular crypto-asset. For the Telcoin disaster relief case, airdrops would occur to anyone with a mobile phone that was active in the geo-fenced disaster area both before and after the disaster event.
By airdropping, for example, one dollar a day to everyone with a mobile phone in an acutely affected area, immediate relief can be provided while traditional aid is in transit. The basic premise is that friends and family in neighboring areas can help deliver food and water faster than relief organizations. After instantly receiving a Telcoin donation into mobile money, a user could transfer money by text to someone in a nearby area with access to goods that can be delivered to the stricken area.
Even if electricity is knocked out in the disaster area, almost all mobile tower base stations have backup battery and diesel generators, particularly in poorer areas with unreliable electric grids. Mobile networks have proven highly capable in maintaining and restoring network coverage during disasters, by manually delivering generator fuel until the power grid can be restored. In the most serious conditions, where mobile infrastructure is destroyed, a remote base station can be quickly deployed and connected by microwave or satellite, presumably faster than international aid could be delivered from outside.
By adding telecoms and mobile money ecosystems to the mix, Telcoin can provide a powerful use case with a straightforward implementation. Instead of sending fiat-based donations to a disaster relief charity, good samaritans with cryptocurrencies could leverage blockchain technology to cut out intermediaries, with the digital ledger transparently showing exactly who receives the money. For donors without access to cryptocurrency, Telcoin plans to provide an easy way to purchase Telcoin for disaster relief via credit card or bank transfer.
Telcoin is in ongoing discussions with mobile network operators globally regarding connecting to mobile money platforms and supporting the disaster relief use case. “Cryptocurrency acceptance faces obvious regulatory hurdles, but the disaster use case has generated important, timely discussions about helping vulnerable people via tokens like Telcoin,” explains Telcoin co-founder Paul Neuner. “Every telecom I have spoken with about it so far has been excited about the prospect of getting involved in a more efficient way of providing urgent relief to those in need.”
In 2005, when social media was just beginning, the Z Smith Reynolds Foundation said, “Disasters tend to happen quickly and with overwhelming force. The same holds true for fundraising in the aftermath of a disaster. The more planning you do in advance of the disaster, the better equipped you will be to handle the outpouring of support that immediately follows such devastation.” Today this statement is even more applicable, as news of disasters spread ever faster, and relief efforts can coalesce over social media in realtime. Telcoin believes that if a transparent, efficient, and instantaneous method to send money directly to people in disaster areas exists, international donors will flock to the better alternative.
Telcoin Website: telco.in
Firstpost. “Mexico earthquake is latest among several major disasters across the globe this year: A list.” Firstpost. Sept. 21, 2017. http://www.firstpost.com/world/mexico-earthquake-is-latest-among-several-major-disasters-across-the-globe-this-year-a-list-4065721.html
GSMA Disaster Response. “Nepal Earthquake Response and Recovery Overview.” GSMA. Oct. 2015. https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2015/12/GSMA_Disaster-Response_Nepal_Workshop.pdf
GSMA Mobile Money Programme. “State of the Industry Report on Mobile Money, Decade Edition: 2006–2016.” GSMA. March, 2017. https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2017/03/GSMA_State-of-the-Industry-Report-on-Mobile-Money_2016.pdf
Hanouch, Michel. “What is USSD & Why Does it Matter for Mobile Financial Services?” CGAP. Feb. 17, 2015. http://www.cgap.org/blog/what-ussd-why-does-it-matter-mobile-financial-services
Katz, Jonathan M. “The Red Cross Won’t Save Houston.” Slate. Aug. 28, 2017. http://www.slate.com/articles/business/metropolis/2017/08/don_t_give_money_to_the_red_cross_we_need_a_new_way.html
Millwood, Joseph. “A few words on cryptocurrencies, hurricanes, disaster relief, blockchains and e-wallets.” Medium. Sept. 11, 2017. https://medium.com/breathe-publication/a-few-words-on-cryptocurrencies-hurricanes-disaster-relief-blockchains-and-e-wallets-4340f98d1136
The Mind Unleashed. ”As Harvey and Irma Destroy Whole Communities, Bitcoin Saves Victims Left Behind.” The Mind Unleashed. Sept. 8, 2017. http://themindunleashed.com/2017/09/as-harvey-and-irma-destroy-whole-communities-bitcoin-saves-victims.html
Parker, Luke. “Blockchain Company Helping Syrian Refugees, Delivering On The United Nations Vision.” Brave New Coin. Oct. 4, 2015. https://bravenewcoin.com/news/blockchain-company-helping-syrian-refugees-delivering-on-the-united-nations-vision/
Ward, Tom. “A New Trial Proves that BlockChain Could Help Us Feed the World.” Futurism. June 14, 2017. https://futurism.com/a-new-trial-proves-that-blockchain-could-help-us-feed-the-world/
Z. Smith Reynolds. “Reaching Out to Those in Need. A Guide to Establishing a Successful Disaster Relief Fund.” Z Smith Reynolds Foundation. Aug. 27, 2005. https://ncdps.s3.amazonaws.com/s3fs-public/div/EM/Publications/DisasterReliefFundGuide.pdf