The Charities Aid Foundation (CAF)has launched a new discussion paper, “Giving Unchained: Philanthropy and the Blockchain”, which looks at the potential impact of new technologies on charitable giving and social action
This follows on from their Giving a Bit(Coin) paper earlier this year, which explored the possibilities of harnessing new forms of digital ‘cryptocurrency’ for philanthropy. The blockchain is a decentralised, shared public ledger that records ownership and transactions and is best known at the moment as the technology underpinning Bitcoin. However, many experts believe that the blockchain has far wider-reaching applications that could fundamentally affect the way we all live our lives. And the question at the heart of this paper is “what does that mean for philanthropy in the future?”
So what will this mean for philanthropy and for charities? They explore this question in more detail in the paper, but here are three intriguing possibilities from Rhodri Davies:
1. Enhanced trust
Trust is one of the most important commodities for any charitable organisation, as they rely heavily on the trust and goodwill of their supporters and the wider public in order to raise funds and carry out their work. The blockchain offers real opportunities to bolster this trust.
The removal of the need for third parties means that charities and non-profits would no longer have to rely on other institutions such as banks, lawyers and government bodies in the same way.
Not only would this reduce their outgoings in terms of paying for transaction costs, but it could also help to avoid contamination when those other institutions are no trusted. For example, an international development charity operating in a part of the world where governance is poor and corruption is rife would surely welcome the possibility of being able to operate without having to deal with corrupt officials and organisations, as this is a major cause for concern amongst donors and supporters who fear that their money is being lost through corruption.
The far greater degree of transparency offered by the Blockchain could also play a key role in boosting trust. If people can see exactly where their donations are going, and exactly what an organisation is spending money on, then there is little room to hide. For those charities that are able to use this ‘radical transparency’ to demonstrate that they spend money relatively effectively, this could lead to increased support. However, there are also risks. As we pointed out in our report on cryptocurrency, the danger of such radical transparency is that without further efforts to educate donors about the way charities operate, it could simply lead to people making unreasonable demands about the way that their own donations are used.
2. New types of assets for philanthropy
As highlighted above, the Blockchain could act as a framework for a vast “Internet of Everything”, encompassing physical objects and intangible digital assets. On the assumption that any of these assets could be given away for charitable purposes, this opens up a potentially vast new array of resources for philanthropy. Coming back to the music IP example mentioned above, it might be possible to specify that a fraction of the IP for a particular piece of music could go to charity. This is a bit like the existing idea of a charity single, only the power of the blockchain in this instance is that it makes automated micro-payments on a vast scale feasible, and thus potentially overcomes the challenges presented by the rise of streaming services and the like.
When it comes to physical assets, an intriguing thought occurs: the advent of an internet of things may spell the end of traditional notions of ownership because it makes more sense simply to share objects when temporary ownership can be transferred seamlessly via the blockchain. Hence people might start owning far less stuff. Could this be a problem for philanthropy, as donations of unwanted goods continue to be an important source of income for charitable organisations. Or, more radically, will it result in a shift of focus away from donations of spare objects towards donations of spare capacity in objects. i.e. Rather than donating a property to charity, you might donate use of the property during periods when it would otherwise be empty.
3. The birth of AI-philanthropy?
The introduction of the idea of the Internet of Things and the value of spare capacity leads us to perhaps the most science fiction-like possibility: that in the future, smart appliances could emerge as an important new donor class.
As well as physical capacity, spare processing capacity will also a valuable commodity within a blockchain-enabled Internet of Things. This means that any time your smart washing machine is not in use, for instance, it could be earning its keep by offering up its processing capacity either for the general maintenance of the system, or to other users who require extra capacity. As a result it could earn money. Some of this could be used to pay for maintenance and repair, but what if there is extra? Well, one option would be to stipulate that some or all of this money goes to charity.
At first, this would almost certainly operate along the lines of existing initiatives such as “electronic rounding” schemes, which allow donors to round up card payments to the nearest pound and give the extra to charity, although in this case the donor would probably be able to choose their own charity. In time, however, as the ecosystem developed and became more sophisticated, it might make sense to implement “philanthropy smart contracts”, which take over responsibility for choosing charities based on performance data. Initially, the donor might still specify broad cause areas, but eventually it might be possible simply to empower the AI to give to the “best” charity based on analysis of what the most pressing needs are at that time and which organisations are most effective.
This might sound far-fetched, and the technology is clearly not there yet (and perhaps more importantly, the data certainly isn’t); however the idea behind this sot of “AI Philanthropy” is already with us. Effective Altruism (or at least the pure form of it, not the increasingly-diluted form we are seeing now) argues that we should be totally agnostic about causes, and simply give to whatever is going to produce the “greatest good”. Since this has already been caricatured as philanthropy for robots, why not simply follow this to its logical conclusion and let the robots get on with it?
The implications of blockchain technology range from quite pragmatic solutions to problems we are dealing with right now to some more outlandish predictions about how things may be in the future. And, of course, as with any new technology where there is hype, this might all come to nothing. However, the level of interest from big-name banks and technology companies suggests that there is something to blockchain technology. The choice for philanthropists and charities is whether to start thinking through the challenges and opportunities now, or risk getting left behind.
- Trusted Identities in Blockchain Apps Shown to Work To Benefit Healthcare and Pharma - April 28, 2017
- Ten More Banks Join Ripple’s Global Payments Network - April 28, 2017
- Token.FM, First Blockchain-Based Direct-to-Fan Music Platform, to Launch Initial Trial in May, Opens Series A Round - April 28, 2017
- Mysterium To Build Blockchain-based VPN for Secure, Anonymous Internet Connection - April 28, 2017
- TaaS token crowdsale concludes with $7.7 million raised - April 28, 2017
- Humaniq Humanitarian Blockchain ICO breaks the $5 million barrier - April 28, 2017
- Exscudo, Blockchain Financial Services Provider Launches ICO - April 27, 2017
- Kibo Platforms’ Beta Version Be Launched in the Beginning of May - April 25, 2017
- Distributed Cloud Platform iEx.ec attracts $12M in Three Hours in ICO - April 25, 2017
- Cryptocurrency Working Group – Distributed Ledger Technology (DLT) – The Way Forward - April 25, 2017
- Blockchain App Humaniq’s HMQ Token to be Traded on Six Exchanges - April 24, 2017
- Five days left until Blockchain Startup Exscudo ICO - April 21, 2017
- Apptrade to Reward Crowdsale Participants with Three Percent Bonus - April 21, 2017
- Blockchain Technology Startup Humaniq Raises $3.8M and Signs Contract With Deloitte - April 21, 2017
- Monolith Studio Announces Crowdsale for TokenCard, the First Debit Card Powered by Smart Contracts - April 20, 2017
- Blockchain Co. SingularDTV Recruits Hollywood VP - April 18, 2017
- Factom Closes Extended Series A Round of $8 Million Following Harmony Product Launch - April 18, 2017
- Interview with Back to Earth founder Clay Space - April 18, 2017
- Ethereum Movie Initial Coin Offering Sell Out - April 18, 2017
- Insurtech Startup Etherisc Wins “Blockchain Oscar” for Innovative Insurance Platform - April 14, 2017
- India’s Blockchain Community Launches Digital Asset and Blockchain Foundation - April 14, 2017
- UK EPSRC Supports Seven Blockchain Projects with £3.6 Million - April 14, 2017
- Dutch National Blockchain Coalition Presents Action Agenda - April 14, 2017
- Broadridge, J.P. Morgan, Northern Trust and Banco Santander Successfully Complete Pilot of for Blockchain Voting - April 14, 2017
- Blockgeeks Labs to Hold Blockchain Hackathon in Toronto - April 14, 2017
- Exscudo network EON coins are available for pre-order - April 13, 2017
- One of Big Four accounting firms is now legal adviser of Exscudo - April 12, 2017
- Dash Cryptocurrency Signs on with Kraken - April 12, 2017
- Blockchain Capital Closes ICO – $10 Million in Six Hours Raised in Record Time - April 11, 2017
- Ethereum meets Hyperledger – Burrow Ethereum Smart Contract Machine to Join Hyperledger - April 11, 2017
- Porsche Announces First Blockchain Contest - April 10, 2017
- Fidelity Labs Joins IC3 Blockchain Group - April 10, 2017
- Global Graphchain Project FERMAT Announces Distributed Governance Model Featuring Contribution Contracts - April 10, 2017
- Coinsilium and Oraclize sign MoU to form Strategic Alliance - April 10, 2017
- Industry Thought Leaders Invest With Blockchain Capital in its Ground-Breaking ICO - April 8, 2017
- Novus To Launch Innovative Blockchain Advanced File Index System - April 5, 2017
- Lykke Announces OEM Services – Lykke Accelerator - April 5, 2017
- BitHub.Africa Announces ICO Campaign to Foster Region’s Cryptocurrency Ecosystem - April 5, 2017
- SibCoin: Siberia Down, China to Go - April 4, 2017
- Groundbreaking Blockchain Research to Feature at International Financial Cryptography Conference - April 4, 2017
- Exscudo, The Nextgen Financial System, Announces ICO - April 4, 2017
- A Film by Manuel Stagars – The Blockchain And Us Video Documentary – Released in Full - April 4, 2017
- Genpact Harnesses Blockchain Technology to Transform F&A Operations to Improve Cash Flow and Enhance Customer Experience - April 4, 2017
- Blockchain Startup TaaS Partners With Exchange Platforms - April 4, 2017
- Synereo announces Qrator – The First Attention Economy App - April 4, 2017
- Blockchain Capital Releases Offering Memorandum for Its $10 Million Digital Token Offering - April 4, 2017
- Lykke Announces Availability of Blockchain Startup ChronoBank TIME Token - April 3, 2017
- Blockchain Workspace Launches Blockchain Education Company in Amsterdam, Netherlands - April 3, 2017
- Blockchain Startup SingularDTV Goes Hollywood - April 1, 2017
- Ledger Raises $7m To Accelerate Worldwide Adoption Of Security Solutions For Blockchain And Cryptocurrency Applications - March 31, 2017