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Giving Compass' Take:
• Although there is still more to learn about blockchain technology, here are five use cases that demonstrate how cryptocurrency can help strengthen philanthropy and the social sector.
• What are the significant barriers for introducing and sustaining blockchain in philanthropy?
• Read more about the risks and opportunities for blockchain in philanthropy.
The technology at the heart of bitcoin and other digital currencies (also called cryptocurrencies) may, in fact, have the potential to drive profound social impact and transform the social sector along the way.
These currencies are built on a breakthrough technology called “blockchain” which is essentially a digital ledger of online transactions linked and secured by cryptography. Updates occur in real-time—in blocks (or groups) of transactions—without interference from or control by a central authority.
Though many people associate blockchain technology solely with cryptocurrency transactions, it can be used to record any type of exchange. Blockchain can also enable automated governance or regulatory compliance—for example, it could allow people with solar panels to automatically sell electricity to their neighbors.
The application of blockchain and digital currencies in the social sector is just getting started, but at least five prominent use cases have already emerged:
- Philanthropy and international aid: To expand fundraising opportunities, a number of charities and foundations are accepting bitcoin and other cryptocurrency donations from donors directly.
- Remittances: Some organizations are using blockchain technology to reduce the cost of remittances transferred across borders by migrant workers, which total about $440 billion annually.
- Identity and land rights: The World Identity Network and Humanized Internet project can store identifiers such as birth certificates and university degrees on a blockchain, in the form of distributed digital lockboxes.
- Governance and democracy: Government and civil society can also leverage blockchain technology to strengthen democratic processes and participation.
- Environmental protection: In the environmental arena, new blockchain-supported supply chain management systems, which are transparent but cannot be tampered with, can track products from the farm to the table.
Read the full article about digital currencies help achieve social change by David Lehr and Paul Lamb at Stanford Social Innovation Review.