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Blockchain for Aid

An article by the Tampa Bay Times outlines how blockchain, the underlying technology of cryptocurrencies such as bitcoin, has improved the efficiency of tracking and delivering aid; especially at the international level.

The UN’s World Food Programme (WFP) has experimented with blockchain technology since 2017, managing the aid for over 100,000 Syrian refugee camps in Jordan. There are about 740,000 refugees spread across these camps. The Tampa Bay Times states that the international aid organization aims to extend services through the blockchain to an additional 500,000 refugees.

One of the issues, pre-blockchain, that have long plagued international aid has been a lack of confidence that monetary donations or physical supplies will actually reach their intended target. Citing former UN Secretary General Ban Ki Moon, the Tampa Bay Times states that “some 30 percent of aid donations – around $40 billion, according to one estimate – failed to reach intended recipients because middlemen skimmed some off of top and corrupt officials often took a cut.”

With blockchain technology these concerns can be largely eliminated as aid can now be fully audited, offering a level of assurance never before possible that one’s donations are going to suffering people and not into the pockets of local officials.

Gustav Stromfelt, a project manager working for the World Food Programme, was quoted in the article as saying “We have this rapid ability to understand where our money is throughout the process…It improves the transparency, accountability, and communication across the board.”

In addition to the never before levels of transparency, there are large cost cuts by using a distributed network to transfer money rather than an expensive third party processing service like Western Union or Paypal. This means “the costs of transferring money are reduced by 98 percent for users like the WFP. That translates to savings of over $40,000 per month for the UN agency.”

The data produced on the blockchain has also been used to improve the ability to deliver aid more efficiently. Citing a project in Tanzania, the blockchain system could, for example, identify any irregularities and adjust to them. For example, it could show “that a particular woman regularly visited the local doctor once a week to buy medicine for her child. So when she missed an appointment, the charity, AidTech, had a social worker bring the medicine to her the following morning.”

“We’re able to show more data on the first two women using the platform than the organization could with over 10,000 women when they were using a paper-based system. That means we can be far more responsive,” said Joseph Thompson, founder of AidTech, in the Tampa Bay Times.

Of all the areas that blockchain has affected, the ability to facilitate donations in an accountable decentralized network may be one of the most under discussed ones. It is clear, however, that adoption of the revolutionary technology has shown massive potential from trial runs and the area of international givings are vying to fully adopt the new technology.