Blockchain is best known as the technology that powers cryptocurrencies, but its potential extends much farther. It’s the perfect platform for social improvement applications that can truly impact the lives of millions and dilute social inequality.
What is Blockchain?
We can think of Blockchain as a Book Swapping Club that you host online with your friends. To track all the book swaps, new book entries, and book ownership, all the club transactions are documented on a shared book (ledger) that everyone owns a copy of. Every page of that book is numbered, following a sequence, and once a new book or swap transaction is written on a page, it would be almost impossible to edit or remove it. This way, if one of your friends would try to cheat and remove a page or insert a new one with false information, claiming that he didn’t receive a book or had already swapped it with another member, the number sequence would not match, and the system would detect the tampering and reject it.
As every member of the club owns a shared updated copy and can access and monitor all transactions throughout the years, it’s easy to track a book from its first swap until its most recent one and see who was involved and read the book. For a new entry to take place, there needs to be a consensus amongst the members that must agree and validate the information.
To facilitate and enforce some rules, the club would allow smart contracts. These predefined clauses all members agreed upon, would help manage the club. For example, every time a member keeps a book past its swapping due date, the system would automatically debit a daily fine from his bank account and deposit the money into a club fund to buy more books. This would eliminate the need for someone to monitor these transactions and guarantees that every member is accountable, respects the club rules and gets a new book each month.
4 Key Benefits of Using Blockchain
Here are four great advantages of using Blockchain.
- Decentralization — data is stored in a public shared ledger that is not controlled by a single party but is hosted by numerous computers at once, making it more secure and almost impossible for hackers to tamper with.
- Transparency — because it works on a distributed and public ledger that records every transaction, the process is transparent and trustable. Any attempt to change data would be visible and easily detectable.
- No need for a middle-man — As it does not require any trust between intermediaries, every user can transact information directly and almost instantaneously.
- Costs reduction — without the need for a mediator in transactions, operational costs decrease significantly.
A Social Impact Revolution
With so many unprecedented benefits, this tool for change has the power to truly revolutionize the charity and social economy sector and help millions of people living in poverty-stricken communities.
But how can Blockchain be used to solve social problems? Here are some of the most impactful ways.
Improving Charities and Donations — One of the biggest issues that charities face is the lack of transparency and the inability for donors to efficiently track their donations. Many organizations have even been exposed as fraudulent or poorly handling the donations they were given. According to the Charities Aid Foundation, 70% of potential donors agreed they would be more inclined to give to charity if they knew how money was directly helping. The poor reach, slow speed and inefficiency of their operations are also frowned upon and very criticized. Blockchain technology enables an unprecedented transparent process, with lower fees, the possibility to track the flow of donations and reach people in crisis faster. This will democratize giving, generate accountability and provide better grounds for charities to raise money for causes and help improve education and healthcare in poverty-stricken communities, and even create emergency funds for natural catastrophes, or sponsor the construction of basic infrastructures.
Revolutionizing the financial sector — There are still over 2.5 billion unbanked adults worldwide. Currently, it is very difficult for people with low income to open a bank account, protect their savings or have access to a loan or credit to start a small business. Banks require credit history, regular income or assets and fees that are hard to provide. With Blockchain technology, we can overcome many of these limitations. With no need for intermediaries, banks can be removed from the equation and people can transfer and receive money using cryptocurrency without the costly fees and validations of the traditional financial system. Blockchain’s smart business exchanges will be faster, more efficient, accountable and affordable for everyone.
Fighting corruption and tax evasion — Corruption and fraud are still major problems in many countries around the world and an important reason for the increasing gap between rich and poor. Because blockchain provides an unprecedented level of security, transparency, and integrity of records in a decentralized web, it could greatly benefit democracy by helping to stop electoral fraud or manipulation. Governmental institutions could become more transparent in their interactions, breaking ground for an unbiased system. In the same way, if this technology is disseminated and largely used by governments and people, it can be very efficient in terms of tax collection and even possibly end the informal economy. There would be a substantial increase in money available to fund welfare, universal medical care or even scientific investigation.
Being Part of the Solution
Blockchain is more than new hyped technology. This affordable, safe and transparent means of transaction can truly be a paradigm shift for the underprivileged and a vehicle for social change. It can transform unlimited sectors and pave the way for a fair and egalitarian world.
To help make this a reality we are launching impactMarket — a blockchain based financial infrastructure where funders can manage and measure their giving, engage with change makers, and support impact-driven projects/causes, in a transparent, borderless and autonomous way.
To learn more about impactMarket and how it will leverage social impact with blockchain, please visit www.impactmarket.com