Blockchain technology has the potential to disrupt the way that business and organisations operate. It uses user-to-user data transmission (as opposed to relying on a third party like a bank or webserver), and while there is a public ledger, no personable data is attached to the transaction.
Adapting Blockchain technology to your organisation opens a whole range of potential solutions to problems facing the NFP sector:
- Data transmitting to beneficiaries on the ground without interference from governments or other agencies
- Quicker secure payment and donations
- Anonymous donations via cryptocurrency
- Greater transparency for donors, seeing the results of their charity in real time
Blockchain is unique in that the private cryptographic data cannot be altered by a central power – all data transferral is peer to peer, meaning that data collected in humanitarian efforts can’t be altered, manipulated or censored by a government or other intermediary as it gets transmitted. The receiver sees what the sender sent. In addition to improving freedom of speech, this can also mean that aid, whether foreign or domestic, can be delivered exactly where it needs to be.
As all data is transferred peer-to-peer – you can get directly in touch with community centres and individuals to see exactly how much aid they require, without a higher agency or government altering the data for their own gain.
In 2017, the UN World Food Program did an experiment with Blockchain. Syrian refugees could use cryptocurrency vouchers at participating markets – the power was put in the hands of refugees directly, and instead of governments manipulating how much the aid cost, the World Food Program knew immediately how much was being spent and which markets to send the resources to.
Traditionally, banks have a transaction period of up to three days, but due to the peer-to-peer nature of Blockchain, transaction times are close to zero.
Blockchain data also has less security risks – as it is inter-connected with each other in a public ledger, altering one piece of data would require altering all others. In addition, Blockchain data isn’t stored centrally, so no single user can alter the data, and the bigger the Blockchain network, the larger the computing power required to successfully crack and alter the data stored within.
We expect to see more and more financial transaction services using Blockchain over the coming years because incoming and outgoing payments can be validated almost instantly. In addition, because there’ll be much more competition in the Blockchain solutions market, we will start to see transaction costs reduce.
Big financial services providers like Deutsche Bank, Goldman Sachs, JPMorgan and even our own ANZ have started experimenting with blockchain, so it won’t be long before companies and not-for-profit organisations are adapting Blockchain technology for themselves. Look at IBM’s Hyperledger Project and the Utility Settlement Coin to see where the future of banking and transactions are heading.
Accountability and Transparency:
Blockchain technology will be able to provide the social sector with increased transparency by showing the effects of their efforts in real-time. One Blockchain platform, GiveTrack, takes payment for non-profit organisations and provides real-time financial transparency and project outcomes to donors.
Increasing the avenues for donation is always beneficial. While it may still be a while before the payment of everyday items with cryptocurrency becomes mainstream, there are already some benefits for donors that NFPs should be considering. For example, if someone wanted to make an anonymous donation to your charity, cryptocurrency payment would be ideal for them – the payment is highly secure, yet anonymous.
Applications for Blockchain in the Social Sector:
These are just a few of the Blockchain applications that we can foresee becoming common practice for NFPs and social organisations. If you’re considering using Blockchain tech in your organisation or know of another organisation that’s already using it, we’d love to hear about it – let us know in the comments.