Five Ways Organizations Are Using Blockchain For Good

Blockchain isn't just a digital ledger for recording bitcoin or other cryptocurrency transactions. It can be used by aid organizations and donors to advance social impact. Take a look at the five ways organizations use blockchain to revolutionize social good.

By Elana Lyn Gross, Contributor

Blockchain technology is revolutionizing how social impact companies power their efforts. Although commonly used for monetary exchange, blockchain can also be used as a digital ledger for other types of transactions, for example, as a record for distributed aid to people affected by disasters or to report administered vaccinations and medical assistance.

Decentralized, publicly accessible, and secure, blockchain technology leaves an immutable record of transactions—an advantage for both aid organizations and donors. Available to anyone with access to an internet connection, perhaps those who have the most to gain from this technology are low-income individuals and people in fragile states at-risk of political or economic collapse.

As the individuals around the globe continue to explore blockchain’s capabilities, here are five ways organizations are using the technology for social good.

They’re Improving the Social Funding Model

The creators of the London-based Alice, a social funding and impact management platform, set out to use blockchain to fix the social funding model. According to CEO Raphaël Mazet, Alice uses blockchain to incentivize charities to be more transparent about their impact, helping investors to identify and scale social and environmental projects with a proven track record. The company chose to use blockchain technology to ensure that records of nonprofit organizations are transparent and auditable.

“The basic building block is a conditional donation platform, where charities only receive donations if they can prove that they have achieved their goals, as verified by an independent validator [via the blockchain],” Mazet said.

Donors, then, only make contributions if the charity achieves its goals.

“The basic building block is a conditional donation platform, where charities only receive donations if they can prove that they have achieved their goals, as verified by an independent validator [via the blockchain],”

– Raphaël Mazet, CEO at Alice

The platform also protects these charities. Mazet explained, “To mitigate the financial risk for charities—for example, if they spend money to run a project but they don’t achieve their goals and donations are returned—impact investors provide working capital and underwrite the risk of projects failing. If projects succeed, however, they are repaid, with interest, from the escrowed donations.”

They’re Issuing Much-Needed Digital Identities

More than 1.1 billion people in the world lack access to basic services because they are unable to prove their identity, according to 2017 statistics from the World Bank. However, governments, non-governmental organizations, and charities—such as the United Nations and Irish Red Cross—are using technology by the Dublin-based AID:Tech to provide people with digital identities. The end goal is to ensure that aid, including welfare and remittances, goes to the right individuals.

It works like this: When someone sets up a Digital Identity in the AID:Tech platform, they have a way to prove their identity and receive aid. Organizations set up an individual’s profile with a unique QR code and a photo of the recipient, who receives a plastic voucher with a specific QR code. The voucher entitles the person to the aid that is recorded in their blockchain account, such as an amount of food, clothing, or money.

Recipients bring their voucher to the aid distributor and when it’s scanned with a phone with the AID:Tech technology, the distributor sees the person’s “digital wallet” (which includes the recipient’s photo for verification purposes) and stipulates exactly what they are authorized to receive. Since the system operates on blockchain, AID:Tech can be sure each individual receives the specified amount and duplicate aid is not administered to the same individual; everything and everyone is accounted for within the chain.

Today, the company is helping governments and organizations to deliver monetary aid, track distribution, and control how that money is spent.

They’re Assisting the Homeless

Although many of us wish to assist the homeless, there are times we don’t either because we don’t have cash or feel uneasy about how that money will be spent. The Halifax-based company Hypergive aims to address this problem by enabling community members to crowdfund gift cards or “digital food wallets” through Ethereum blockchain technology.

With Hypergive, each card includes a QR code that contains the private key of an Ethereum smart contract and holds the card balance and the recipient’s picture. Partner organizations (unnamed) issue cards to those in need and participating stores can then scan the QR code, verify the user’s identity, and distribute goods. Blockchain technology makes it possible for community members to make tax-deductible, secure donations and also track exactly how the money has been spent.

They’re Bailing People Out of Jail

People who cannot afford cash bail are held in United States prisons before being convicted. The intention of cash bail is to make sure people show up to trial, but activists argue that it unfairly penalizes low-income individuals who can’t post bail.

Enter Bail Bloc, a cryptocurrency scheme that uses spare computer power to help get people out of jail. The app works by using people’s processing power to “mine” Monero—a secure, private, and untraceable cryptocurrency—through the energy used to download the Bail Bloc app. At the end of the month, Bail Bloc exchanges the Monero for U.S. dollars and donates the funds the Bronx Freedom Fund. From here, the Bronx Freedom Fund partners with the nationwide Bail Project to bail out low-income individuals.

“Just as the United States Treasury prints money to infuse into the economy, cryptocurrency is generated ‘out of nowhere’ through an arbitrary process. But where the United States Treasury needs a minting machine, all miners need is computing power,” Bail Bloc’s site explains. “Cryptocurrencies are generated through users running software to solve difficult computational problems, in a process known as mining.”

Keys to this process are the decentralized nature of cryptocurrency and the peer-to-peer function of blockchain. “Mining is an opt-in level of participation in maintaining a blockchain. Essentially, mining is the act of verifying transactions on the network, and as an incentive to that process users are rewarded with cryptocurrency,” Grayson Earle, Bail Bloc’s co-creator, said.

They’re Democratizing Property Ownership

People won’t invest in property if they can’t guarantee ownership, yet many developing nations don’t require land registration. Bitland uses blockchain technology to settle property disputes in Ghana by creating a virtual land registration platform that records payment transactions and includes photos of the property so that ownership is clear. The technology enables individuals and organizations to use Bitland Catastrals, a type of digital currency, as a digital token to record surveys and deeds into a secure BitShares blockchain.

Currently, Bitland is operating in Ghana, but the team hopes to expand globally within the next five years. “Given that the Lands Commission wants to solve transparency problems, utilizing blockchain-based solutions will bring the transparency and immutability that is needed to ensure the integrity of the public ledgers,” Larry Christopher Bates, Bitland’s chief security officer said during a Netexplo presentation in 2016.

If Bitland is any indication of the possibility for blockchain to address systemic problems, we can expect to continue to see diverse applications. As the technology develops and Internet access becomes more prevalent, blockchain will continue to democratize access to secure, inexpensive digital ledgers with an array of benefits for organizations and individuals alike.