The Future Of Social Impact Is...Blockchain
By David Hessekiel, Forbes
Last week, cryptocurrency startup Ripple made the equivalent of a $29 million donation in XRP, the digital coin that it uses in transactions, fully funding all projects on DonorsChoose.org. As evidenced by this unprecedented charitable donation, Bitcoin and cryptocurrency certainly have a place in the future of social impact, but this is merely the very tip of a much bigger iceberg.
It feels like everyone is talking about bitcoin and blockchain technologies, but most folks have a gossamer thin grasp of what it is. That is certainly true in the social impact sector.
Fortunately Mercy Corps’ Ric Shreves has been studying distributed ledger technology and offered our community a primer on it during a recent webinar.
Here are highlights of his message:
Imagine a technology that could:
- Improve the graduation rates of Nigerian girls by automatically generating cash payments to families when their daughter achieves a 90% attendance rate.
- Enable a musician to automatically donate 50% of royalties from a specific song to their charity of choice.
- Coordinate what resources (financial, medical, etc.) have already been provided to a refugee by a variety of aid organizations that have historically not been able to 'compare notes' in this way.
- Help homeowners conserve electricity with a ‘smart’ refrigerator and then automatically donate the money saved to charity.
These are all increasingly possible thanks to the emergence of blockchain technology. While still in the ‘early adopter’ phase, blockchain has huge potential for social impact programs around the globe.
Depending on your sector, your company may already be watching or experimenting with technologies like blockchain and bitcoin, but this is one advance you’re going to need to understand if you plan to be involved in 21st century social impact programs.
Let’s first get our vernacular straight: blockchain and bitcoin are merely types of what’s known as distributed ledger technology(DLT).
According to Shreves, “a distributed ledger is a distributed database that maintains a continuously growing list of ordered records. Each participant in the network maintains a copy of the database, and as the database is updated, changes are propagated across the network in near real time. Throughout the process, security is maintained by the use of encryption and digital signatures.”
So instead of one central actor maintaining a copy of a particular ledger (e.g. a bank), there are thousands of copies being continually updated by distributed “nodes”, providing for greater transparency and resilience for the ledger and effectively eliminating the middle man in a peer to peer network.