Blockchain 01 - Can we create self-governing Charities?
Blockchain is quite a buzz nowadays. And being a technopreneur, I spend considerable amount of time studying it. And while Bitcoin is well and good, I am not enamoured by the world of crytocurrencies/virtual currencies. It is a heavily regulated industry (and rightfully so). It may take a while to adapt or adopt these new concepts. The World has bailed out the financial industry several times over the last few decades just because it is so powerful. And its incumbent strength will give tough resistance to any new technology trying to disrupt it.
However, Blockchain will disrupt those which are less regulated, much faster. One such candidate is the world of charity!
Problem - Is my money being used for what I gave it for?
This is the crux of why Philanthropy is ripe for disruption. By its very nature, most charity is directed towards the underprivileged and the less fortunate. Bulk of such residents are in the developing or the underdeveloped world - sub-saharan Africa, parts of India, parts of middle East, South America, Central America and such. In most such places, the central authorities are systematically corrupt. Even the NGOs (non-government organizations), charities and private institutions trying to fill the gap end up with human exposures of bribery, incorrect performance reporting and fund diversions to personal expenses.
Solution - You can give direct to the one in need (Peer to Peer)
This is where Blockchain comes in handy. It can facilitate the peer-to-peer (P2P) transactions between the one who wants to give and the one who needs without the need of any central administrator. It is kind of like Grameen Bank meeting mPesa - a fusion of personalized micro-lending with last mile delivery enabled by technology. With Blockchain (and I don't mean Bitcoin), a P2P network can be created between the stakeholders of the philanthropy world. There are already companies like Abra, Cashaa and several others in many parts of the world, who are working on moving real money from one part to another. The same rationale applies here. Imagine, you decide to donate money to education of children in Kenya. On the Blockchain, you can choose which kids in which village do you want to work with, you can connect directly to the schools they attend, you can directly pay fees to the schools, schools in turn can directly inform you of the grades of children that you are supporting along with receipts of payments. You can track the progress of the kids, you can pay for their meals in school cafe, their internet bills, for their electricity supply, for their stationary, laptops, regular medical check-ups, whatever else you may choose to. You can get bills directly from the service provider. Over time you can build confidence in the reliability and honesty of service providers and of the kids that you support. There is direct trust building between all parties.
Similarly imagine if you want to pay for vaccination of kids in a village in India. Again, once all stakeholders are on the Blockchain, a similar network of trust is built where each transaction can be authenticated by multiple parties to establish its reliability.
Call it "Personalized Philanthropy"...
Innovation - Smart Contracts for crowdfunding
Other than building a network of trust, another innovation that Blockchain offers is its ability to execute smart contracts. So if there is a village in Mexico which is trying to build its own School, it can put its project on the "Personalized Philanthropy" Blockchain with request for cash, supplies and services. And people can make relevant pledges. A cement and bricks supplier can pledge building material while a wealthy housewife can pledge her financial support. Once all the required components are pledged,the construction work can start, payments can automatically be released on completion of milestones. All the while being secure and trusted.
Disruption - Self Regulated Peer-to-Peer Charity
And this where the disruption potential is!
With the combination of peer-to-peer network facilitated by mobile penetration, trust establishment and Smart Contracts using Blockchain, there is a new potential being created - the possibility for creating a "Self-Regulated Peer-to-Peer Charity". It is a new value that could change the way the world of "giving" works.
And I am sure people are already working on make it happen. If you have interest in creating such a venture, please feel free to reach out to us. We are actively working on creating new "value propositions" powered by Blockchain and we would love to collaborate with partners.
Disruption in next 10 years is going to be even faster than the last 10. The best is yet to come!!
Series of ideas...
I plan to pen my thoughts in a series of blogs over the next upcoming months as and when I read or think of potential disruptions to industries. This is the first of the series. More to come.
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Product & Business Leader | Google | ex-Microsoft | Duke MBA
6 年Nicely written!