By Joe Ware, originally published on Reaction
Much has been written about the potential of blockchain technology to transform the way the world works, from creating new currencies to how people vote. Now its transformative potential is being deployed to see if it can help save lives and improve how we respond to humanitarian disasters.
Blockchain uses cryptography to create distributed digital ledgers of recorded transactions. Last year Britain’s chief scientist, Sir Mark Walport, underlined just how fundamentally it could change society when he described it has having “the potential to redefine the relationship between government and the citizen in terms of data sharing, transparency and trust.”
Aid spending has come under increased scrutiny in recent months with calls for greater accountability and transparency. Further checks and balances to a system with already very high levels of reporting could add layers of bureaucracy and red tape, reducing efficiency and effectiveness. But blockchain may offer an elegant solution which not only makes the process more secure, transparent and accountable, but does so by actually speeding up response time rather than slowing it down.
A pilot scheme is being undertaken by the Start Fund, a rapid response operation run by 42 aid agencies within the Start Network, deploying UK aid money to small scale emergencies that often go unreported and receive little, if any funding. Since its inception in 2014 it has been activated more than 90 times, reaching 5.4 million people in 49 countries. One shortcoming of the current humanitarian system is how long it takes to get money to agencies working on the ground in a crisis. Central emergency response funds via the UN take an average of 90 days to reach an NGO. But the Start Fund disburses cash within 72 hours of being alerted. Projects must be up and running within seven days and are completed within 45. This makes it the fastest, collectively-owned, early response mechanism in the world.
Where speed is king, anything that can save time has value. Like the constant search for “marginal gains” by Sir Dave Brailsford’s Team Sky, blockchain offers a chance to streamline the Start Fund still further. First the technology will be tested in the peer review and decision-making process used by the Start Fund’s members. Currently the administrative process of exchanging letters, contracts and other paperwork needed to trigger a payment can take hours, sometimes longer. Blockchain should be able to speed this up, recording decisions and informing country level staff that funds are on their way.
Eventually the hope is that self-executing “smart contracts” made through blockchain, which trigger when certain criteria are met, will speed up transaction times and see resources reach emergencies even quicker. The pilot scheme has been backed by a £50,000 grant from the government of Estonia, one of the world’s early adopters of blockchain and the first to allow digital e-residency, allowing non-Estonians to open businesses and bank accounts in the country more easily.
Blockchain also promises unapparelled security, so much so it is already the basis of an entire digital currency, Bitcoin, and is being explored as a way of recording contracts and making wills. Its digital ledgers record every decision made, allowing all transactions to be traced from donor to recipient. The Start Fund has a decentralised decision making process in a bid to shift the power away from top-down bureaucrats thousands of miles away to locally based responders who decide where the money needs to go. Blockchain’s impeccable cryptographic memory should reduce fraud and give donors the assurances that funds are fully traceable with decision makers held accountable.
Humanitarian emergencies are on the rise with the number of people affected by crises around the world nearly doubling in the past decade. Only this week the spectre of famine was raised in Yemen, Nigeria, South Sudan and Somalia, and the capacity of NGOs to respond is being increasingly stretched as the gap between need and funding widens. The application of blockchain to the business of saving lives, couldn’t be more timely.
Joe Ware is a journalist and writer at ChristianAid.