Blockchain and cryptocurrencies are a hot topic of great interest in the financial and economic world. However, aside from the financial speculation that surrounds it, what are other possible use cases for this technology?
Blockchain: basic principle
We all know what blockchain is, but let’s remember its basics. Blockchain is a new technology that allows you to create decentralized networks consisting of different computers to securely record transactions made in them. In other words, each computer has access to all the data contained in this network, and can make changes to them if it has the authorization of other users (or minors). This system allows us to avoid centralized control of everything – a single point of failure – and protect our data from hackers or attempts at corruption.
It is also worth mentioning that Bitcoin (the first cryptocurrency) was born from a similar idea: to create an alternative currency based on peer-to-peer payments without the need for a central authority such as banks or governments; but there are many other possible blockchain applications that are beyond the scope of knowledge how much is bitcoin or, more generally, the use of cryptocurrencies!
Solve some NGO problems?
Blockchain will solve some of the problems of existing NGOs, such as their unreliability or lack of transparency. It is decentralized, which means that no single organization controls it and that this database is not stored on a centralized server. This makes it harder to hack and therefore more secure than traditional databases. It is invariable: as soon as something
has been stored on the blockchain, it cannot be changed or deleted (the only way to do this is to create a completely new version of the database). Finally, since there is no need for a central authority to control access or change records in the database (like in a bank), everything will be automatically logged by everyone who participates in this peer-to-peer network (making them all witnesses). ).
NGOs discover this potential market
The NGOs themselves have also discovered this potential market. Some of them, such as UNICEF or the World Food Programme, already experimenting with blockchain to improve their transparency. Others, like Greenpeace or Oxfam, use it to raise funds, manage donations, and track the flow of goods and services they receive through their network of partners.
In November 2018, during the G20 meeting in Buenos Aires, Argentina, a group of countries, led by France, called on international development organizations to make better use of technology at all levels, from fundraising to aid distribution and monitoring. Blockchain technology can serve as a solution to the three problems mentioned above: transparency will be increased by eliminating intermediaries; fundraising will be made easier with better tools for finding donors; finally and above all, distribution of aid can be improved with automated tracking systems that enable NGOs working together under a common platform (such as UBS) to reduce costs while being more efficient and effective.
Can blockchain change the face of charities?
When we talk about blockchain, we often forget that not all of its applications are for finance and cryptocurrencies. Blockchain technology is a decentralized system of trust that can also be used to store data and make it available to everyone.
This is the case for NGOs who are beginning to see the potential benefits of this technology: it provides transparency in donations, avoiding financial fraud or misuse of funds by organizations. However, in order to decide whether you should use blockchain, you need to understand how it can help your organization operate more efficiently and whether these benefits outweigh the disadvantages, such as increased costs or reduced efficiency.
In conclusion, it can be said that blockchain technology offers many opportunities for the future of philanthropy. This is not a new technology, but it has grown in popularity recently due to its decentralized nature and encryption capabilities. The main benefit of this system is that it allows users to transact anonymously, which means there is less risk of fraud or identity theft when making online donations.
Published on 24.01.23 17:32