When most people imagine sectors and industries disrupted by blockchain technology, typical uses come to mind: global currency, securities, and even a way to track goods in a non-combustible manner.
A good starting point for understanding what drives the adoption of new technologies is to take a close look at human psychology and understand what motivates the average person to participate in the cryptocurrency space. Currently, the lion’s share of space-sharing users do so in pursuit of wealth, just as they did during the gold rush. The creator of the hierarchy of needs, Abraham Maslow, wrote in his book:
“A man only needs to live in beauty, not ugliness, because he needs to eat food that is very painful for magic, or rest for a tired body.”
While this innate desire for wealth and prosperity is in itself a powerful human motivation, there are stronger human drives that the blockchain can satisfy. The potential synergy between blockchain technology and philanthropy is best illustrated in The Bottom Billion by Oxford University professor Paul Collier, who explores why poor countries are unable to thrive despite international support and support. Cooley found that 60 countries with a total population of 1 billion experienced little or no income growth in the 1980s and 1990s. While Collier explored the many “development traps” that could be offered to these countries, two in particular could be tackled with blockchain technology: mismanagement and the natural resource trap.
Natural resource fisheries
As a result of systematic repression, many of these bottom billion countries have governance problems that prevent them from thriving. The most obvious problem of governance in many of these countries is corruption. A complete lack of transparency on the part of authoritarian governments with little or no democratic value created by freedom of the press and expression, and a black hole consuming all the resources flowing into the country. In addition to blatant corruption, fiscal policy in some of these countries is poorly framed by regulators who have no experience or education to create and maintain a healthy economic environment.
Blockchain technology is a good solution to both of these problems. With an immutable record that no one can tamper with, regardless of power or influence, a country can have a transparent and reliable view of its resources and natural resources. Additionally, the use of blockchain technology protocols as a store of value can lead to economic stability in these types of countries, which often face massive inflation, banking operations, and strict exchange controls. Being able to have a source of value completely separate from the government’s reach and the country’s economic woes will help millions of people around the world fight poverty.
Related: The future of philanthropy lies in Blockchain technology
The association with corruption and governance is a natural resource trap. Ironically, resource-rich countries tend to be worse off than other countries. Natural resources make conflict nearly inevitable, as opaque government officials often use the profits to their advantage. Fortunately, blockchain technology, thanks to the recent wave of companies exploring asset coding, provides a practical solution to ensure the wealth is appropriately used for the benefit of all countries, not just banknotes.
Related: Your cryptocurrency can be donated to charity instead.
How does this relate to charitable work? The truth is, charitable efforts can only reach their true potential in a transparent and reliable system. Unfortunately, in recent decades, there have been many ugly stories of aid misuse or theft. All too often, the opacity of existing systems prevents philanthropic efforts from truly reaching people in need, with no one taking responsibility for how the aid is used or where the resources are directed. A good example of how blockchain technology directly affects the needs of philanthropy is what Mercy Corps and the humanitarian NGO Uganda do.
Related: What to read when handing over the cryptocurrency to charitable or other organizations
The ability of blockchain technology to provide unreliable, comparable, and scalable systems could be the catalyst that many charitable organizations await to advance further in their humanitarian efforts. These tools provide a way to ensure that resources ultimately reach the “bottom billion” struggling, and they can be a stepping stone to finding responsibility when resources run out.