Nicole Hahn and Josh Hallwright from Oxfam Australia explain why they are excited about the possibilities which blockchain systems offer to improve the effectiveness of aid to the poorest people.
It seems as though everyone is talking about cryptocurrencies and blockchain these days and the humanitarian sector is no different. Plenty of people say the whole thing is over-hyped, only good for currency speculation and making fast, but seriously risky, money. Others take a cautious route, agreeing that there is a lot of hype but that there is also underlying value in blockchain, the technology that underpins cryptocurrencies.
We see that this technology could have dramatic impacts on all societies, both positive and negative. Our goal is to maximise the value of blockchain for vulnerable communities around the globe.At Oxfam Australia we have an Innovation Lab exploring blockchain which sits squarely in the second camp, looking in to blockchain rather than cryptocurrencies. We see that this technology could have dramatic impacts on all societies, both positive and negative. Our goal is to maximise the value of blockchain for vulnerable communities around the globe.
Simply put, blockchain is a way of recording transaction data. What’s different is that these records, let’s call them a ledger, are not held in just one place but distributed across hundreds or thousands of computers. Hence, blockchain is referred to as a type of Distributed Ledger Technology (DLT). The rules governing how this data is recorded and distributed means that the records are impossible to change, transparent, and traceable.
This technology is being applied for social good. For example in logistics, Oxfam is currently testing in Cambodia the use of a transparent, smart-contract enabled blockchain, so that people purchasing organic rice will be able to see exactly where the rice came from and how it got to them. It also enables pre-agreed rates to be securely and automatically paid to the small-scale rice farmers through money held in escrow accounts. The reliability of fast payments gives these farmers more options to grow their business.
Another example is the recording of land title ownership on an immutable blockchain, so that people can be sure that once ownership is established, they’ll have control about what happens to that record. This means that records won’t go missing, bribes to prove ownership won’t have to be paid, and transferring titles is both more secure and transparent. The revolutionary potential of blockchain is that it enables significant shifts in power through changing how people interact with institutions and each other.
At Oxfam, we are applying this technology for social good by partnering with the private sector technical blockchain experts to augment our strengths in working with vulnerable communities. We offer the tech firms the Oxfam brand and networks, community perspective, community reach and a real-world use case of significance. In return for partnering in this early stage, Oxfam has the opportunity to influence from the inside, shape the beginning of the journey, keep project costs low and advocate for the needs and rights of the communities in which we work.
We want to understand how vulnerable communities engage with the technology, the value it adds to their lives, if it’s easy to use and what fears they have.We want to understand how vulnerable communities engage with the technology, the value it adds to their lives, if it’s easy to use and what fears they have when using applications built on blockchain technology. We want to be able to ensure the privacy and safety of all people involved, ensuring all data is treated responsibly and ethically. We want to look at the system challenges the technology may assist in addressing and understand how power dynamics shift as a result of using DLTs.
We are putting these questions in to practice by running a pilot test of a cash transfer platform built on a blockchain in Vanuatu and then the Pacific. We are working with a private sector partner to test a platform built on the blockchain that enables donors (be they institutions or individuals) to directly transfer electronic tokens, representing real money, to people affected by disasters in Vanuatu. This platform works with identified vendors to enable recipients to spend the electronic tokens at their stores. The value of this platform being on a blockchain is that the transactions are transparent, records can’t be changed, monitoring is simplified and more efficient. Thus this platform should also help tackle fraud and corruption.
We believe that by using Blockchain for cash transfer programming we can make it cheaper, quicker and more transparent for all involved. If we are right – this will revolutionise the industry, and shift power dynamics which in turn will get more aid money into the hands of people who need it, allowing them to make their own choices.
Read more about our approach to using ICTs in programme