Can Cryptocurrency Save The World?
Organisations involved in the pursuit of fighting poverty have come under increasing scrutiny over the past few years. And rightly so. It could be argued that any organisation seeking direct donations from the public have a greater responsibility for transparency and accountability than, say, a company like Nike?
The relationship between a non-profit and a donor isn’t so much transactional as it is relational. And relationships are based on trust.
This is where cryptocurrency comes in. You’ve surely heard of it? Bitcoin, Ethereum, Ripple, Dogecoin, EOS, Tether? At the time of writing there are 1,916 ‘cryptocurrencies’ registered on coinmarketcap.com, a website set up to track the volume of money invested in this most speculative of emerging digital assets.
The vast majority of them are bobbins, created to capitalise on the trend which, at its peak in January, had just shy of £800 billion rattling around in it.
It’s cooled since, stabilising between $200 and $300 billion.
Cryptocurrencies still come with something of a sinister label. For years Bitcoin and similar assets were smeared (primarily by banks) as being used exclusively for money laundering and value trading on the dark web. There’s definitely some truth to that. It’s a secretive realm, closed to us analogue folks who buy our milk at Co-op.
Have things changed? Honestly, I don’t know.
My personal view is that until cryptocurrencies actually posses any utility in the real world then they will remain a niche trend. Albeit one with potential.
And that potential actually lies in blockchain, the technology underpinning the whole cryptocurrency establishment.
In simple terms the blockchain is a digital ledger, keeping an account of all transactions that have ever happened on a given network. Since the first Bitcoin entered the world and transacted from one person to the next a record has been kept and stored. This ledger is updated in real time on every computer that the blockchain is connected to, simultaneously.
So what, you might ask? Well, so security and speed.
It is impossible to amend, edit or hide a transaction. Can the same be said about pounds and pence? Of course not. Any transaction is instant, traceable and recorded simultaneously on hundreds of thousands of computers. This is why people think things like Bitcoin have value. Or at least the technology underpinning it might do in the future.
Here’s where the saving the world part comes in.
Organisations like Christian Aid work all over the world - across borders and cultures, laws and language. Central to our ability to respond to need, particularly in an emergency response situation is the swift distribution of resources. Securely.
The Start Network is made up of 42 partnering NGOs across 5 continents. Christian Aid are a member. It’s effectively a coalition response network, helping these NGOs support each other and coordinate the distribution of aid.
It exists to solve the problem of getting money into a given situation quickly.
Consider that it takes the United Nations 90 days to distribute relief money to NGOs working on the ground after an emergency. Granted, they’re dealing with much larger scale, such as the international responses to the Indian Ocean Tsunami in 2004, but you get my point, it’s slow. Slower than can be achieved on a smaller, more nimble network.
The Start Network can currently distribute cash within 72 hours. And that’s before blockchain.
Back in February, Start Network partnered with a startup called Disberse to test an international NGO to NGO blockchain transaction. It was instant and a full record of the transfer was logged, never to be amended. No fees, no faff, every penny accounted for.
What blockchain can offer the development sector is the near instant, recorded transfer of resources to where it needs to be, quickly.
Can cryptocurrencies save the world? Doubtful.
Can blockchain help make organisations like Christian Aid as efficient and transparent as their donors demand? Absolutely.