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When most people envision the problems solved and industries disrupted by blockchain technology, typical use cases come to mind: global currency, store of value, and even a way to track goods on an immutable ledger.
A good starting point for understanding what drives the adoption of new technologies is to take a deeper look at human psychology and understand what motivates the average person to participate in the cryptocurrency space. As of now, most of the users participating in the space do so in pursuit of wealth, not unlike that in the gold rush days. The creator of the Hierarchy of Needs Abraham Maslow wrote in his book:
“It is necessary for man to live in beauty rather than ugliness as it is necessary for him to have food for a sore belly or rest for a tired body.”
While this innate drive for wealth and prosperity is a strong human motivator in itself, there are even stronger human motivations that blockchain can appease. The possible synergies between blockchain technology and philanthropy are best illustrated in The billion dollars, a book written by Oxford University professor Paul Collier that explores the reasons why impoverished countries fail to progress despite international aid and support. In the book, Collier argues that there are 60 countries whose combined billion residents experienced little or no income growth in the 1980s and 1990s. While there are several “development traps” explored by Collier that these countries can fall victim to, two in particular can be broken using blockchain technology: poor governance and the natural resource trap.
The natural resource trap
As a result of systematic oppression, many of these countries in the last billion have governance problems that prevent countries from thriving. The most obvious governance problem in many of these countries is corruption. A complete lack of transparency of authoritarian governments with little or no democratic values such as freedom of the press and speech creates a black hole that absorbs all the resources entering the country. In addition to blatant corruption, fiscal policies in some of these countries are poorly formulated by regulators who lack the experience or educational background to develop and maintain a healthy business environment.
Blockchain technology is a good solution to both of these problems. By having an immutable record that cannot be manipulated by anyone, regardless of power or influence, a country can have a transparent and reliable view of its country’s natural resources and funds. Additionally, using blockchain technology protocols as a store of value could bring economic stability to these types of countries that often face massive inflation, bank runs and tight currency controls. The ability to have a source of value completely separate from the reach of one’s government and the economic difficulties of one’s country would help millions of people around the world to fight poverty.
Related: The future of philanthropy lies in blockchain technology
Binding with corruption and governance issues is the natural resource trap. Paradoxically, countries rich in natural resources are usually worse off than other countries. Natural resources make conflicts almost inevitable, as non-transparent government officials often use surpluses to their own advantage. Fortunately, blockchain technology, through the recent explosion of companies exploring resource tokenization, provides a viable solution to ensure that a country’s wealth is used correctly for the benefit of all, not just a few autocrats.
Related: Your crypto fees can instead be donated to charity
Philanthropy
How does this relate to philanthropy? The reality is that philanthropic efforts can only reach their true potential in a transparent and reliable system. Unfortunately, some pretty bad stories have emerged over the past few decades about forms of help being misused or stolen. Often, the opacity of the systems in place prevents philanthropic efforts from truly reaching the people in need, without anyone taking responsibility for how the aid was used or where the resources went. A great example of how blockchain technology can be used to directly impact philanthropic needs is the work done by Mercy Corps, a non-governmental humanitarian aid organization in Uganda.
Related: Things to consider when giving cryptocurrencies to charities or others
The ability of blockchain technology to deliver relatively cheap and scalable trustless systems may be the catalyst that many philanthropic organizations have been waiting for to make great strides in their humanitarian endeavors. These tools provide a way to ensure that resources actually end up reaching the “billion in funds” they are struggling with and could be a starting point for seeking accountability when resources disappear.
The views, thoughts and opinions expressed herein are solely the author’s and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Jarred Winn is a blockchain philanthropist, who has advised the nonprofit and philanthropic weapons of the world’s leading cryptocurrency exchanges, collectively raising millions towards blockchain philanthropy and COVID-19 initiatives. Previously, Winn co-founded and launched Winn.solutions, a strategic blockchain consulting and advisory firm. Additionally, Winn co-founded Mindful Miracle Schools, a nonprofit school in California, where he directs partnerships and business operations.
