Blockchain and disaster relief: how Web3 tools are revolutionizing disaster response efforts

Philanthropy
Written By Drew Simon
Wildfire

In recent years, the world has witnessed an unsettling increase in the frequency and intensity of both natural and man-made disasters. From devastating hurricanes, wildfires, and floods to catastrophic explosions, industrial accidents, and armed conflicts, the spectrum of disasters continues to broaden. Climate change and geopolitical tensions are among the myriad factors contributing to this alarming trend, with the repercussions being profound, affecting millions of lives, disrupting ecosystems, and causing monumental economic losses.

As communities across the globe grapple with these escalating threats, the urgency for robust, transparent, and efficient disaster response mechanisms has never been more apparent. The integration of innovative technologies like blockchain into disaster management frameworks emerges as a beacon of hope, promising a pathway towards more resilient societies, equipping them with the tools to respond to diverse disasters.

 

Enhancing Emergency Aid Delivery with Blockchain

The delivery of emergency aid to victims in the aftermath of disasters is a complex operation fraught with challenges, ranging from logistical bottlenecks to lack of transparency and coordination among various stakeholders. Blockchain technology, with its inherent attributes of decentralization, transparency, and immutability, presents a transformative solution to these challenges.

To speed up the aid delivery process, and cut down on costs, blockchain allows those delivering emergency aid to cut out unnecessary intermediaries – whether it be banks or payment processors – allowing aid to be delivered directly to those in need. A great example of this can be found in the partnership with the United Nations High Commission for Refugees (UNHCR) and the Stellar Development Foundation. This partnership enables the delivery of cash assistance directly to Ukrainian refugees via the USDC stablecoin, which is redeemable at any MoneyGram location. Although the project is still in the early stages, the hope is that it will make it easier for refugees to access essential cash assistance regardless of if they have a bank account or not.

Furthermore, blockchain's capability to support smart contracts can automate certain aspects of aid delivery, thereby expediting the response time. For instance, smart contracts can be programmed to automatically release funds or dispatch aid supplies based on predefined conditions or triggers, such as the verification of aid delivery at a particular location. This level of automation not only accelerates the aid delivery process, but also ensures that the resources reach the intended beneficiaries promptly.

For an example of the power of smart contracts to automate the delivery of financial assistance, look no further than Etherisc, a decentralized insurance provider offering affordable crop insurance for smallholder farmers. Crop insurance is a vital tool for farmers by protecting their crop yield from extreme weather events such as drought or flooding. Despite the value of this tool, only 3% of smallholder farmers in Sub-Saharan Africa use it, putting them at a huge disadvantage, and putting their livelihoods at risk. Etherisc is hoping to address this by building an insurance framework that is compatible with all Ethereum Virtual Machine (EVM) compatible chains and makes use of Chainlink’s oracle network which provides a reliable connection to external weather data sources. In the event of an extreme weather event, insurance policies are triggered automatically and payout the insurance to the policy holder. The end result is a fair, transparent, and tamper proof process, where payouts are made in a timely manner, helping to protect smallholder farmers from the growing threat of climate change.

In the future, the role of blockchain will likely go beyond just the transfer of emergency aid. By leveraging blockchain, emergency aid delivery can be streamlined through real-time data sharing and coordination among aid agencies, government bodies, and other stakeholders involved in disaster response. The technology facilitates a transparent and tamper-proof ledger where all transactions, including the dispatch and receipt of aid supplies, can be recorded in real-time, ensuring accountability and minimizing the chances of aid misappropriation or delays.

Through these mechanisms, blockchain technology holds the potential to significantly enhance the efficiency, transparency, and accountability of emergency aid delivery, making a tangible difference in the lives of disaster-stricken individuals and communities.

 

Supporting disaster relief NGOs with crypto philanthropy

One of the most profound ways that blockchain can help in disaster response efforts, is by facilitating donations to NGOs working on the frontlines with crypto philanthropy. Crypto philanthropy has been one of the biggest trends in the Web3 social impact space in recent years, with prominent platform The Giving Block projecting $10B in crypto donations in the next decade.

By leveraging cryptocurrency as a fundraising tool, NGOs can not only connect with a unique donor demographic outside of their traditional donor base but can also expand their reach to a global level. A great case study on the ability of blockchain to get funding to organizations on the ground, as quickly as possible, can be seen in the Web3 community’s response to Russia's invasion of Ukraine in February 2022. Following Russia’s invasion, several Web3 fundraising initiatives were launched to support humanitarian organizations working on the ground, including Ukraine DAO, as well as special funds from Endaoment and The Giving Block. Also, for the first time ever, we saw a government appeal directly to the international community for donations, with the Ukrainian Government posting their wallet address to twitter to accept direct donations in BTC, ETH, and USDT.

This enabled them to instantly receive donations from basically anywhere in the world, without the need for an intermediary. As a result, humanitarian organizations in Ukraine, as well as the Ukrainian Government, quickly received over $100 million dollars in cryptocurrency donations in the months following the invasion.

Another great example is the use of crypto philanthropy in response to the Maui wildfires. In light of the devastating fires, the Web3 community rallied, helping get much needed funds to organizations working on the ground including Habitat for Humanity Maui and Maui United Way. Prominent crypto philanthropy platforms made special appeals to the community, including the launch of the Maui Emergency Response Fund by The Giving Block, which included a 1:1 match by the CEO of Shift4, The Giving Block’s parent company.

 

Decentralized Identification

In the wake of disasters, one of the critical challenges faced is the identification and verification of individuals affected, which is crucial for the effective distribution of aid and support services. Decentralized digital identities, underpinned by blockchain technology, offer a robust solution to this challenge. Unlike traditional identification systems, a decentralized identity is not controlled by a central authority and provides individuals with self-sovereign identities. This means that individuals have control over their own identification information, making it easier to verify identities in chaotic post-disaster scenarios where centralized identity infrastructure might have been disrupted or destroyed. The immutable and transparent nature of blockchain ensures that the identification data is secure, tamper-proof, and easily verifiable by authorized entities.

Furthermore, when victims of disasters are forced to flee their homes, they must often leave behind important documentation such as birth certificates, marriage licenses, passports, and ID cards. Unfortunately, it is unlikely that they will ever be able to retrieve these documents after fleeing. Blockchain identification provides these individuals with an opportunity to re-establish their identification in a way that is safe, accessible, and trustworthy. The documentation attached to a decentralized identity can be used to access important services provided to refugees, or to submit a refugee claim at another country. Once they have settled, this same documentation could also then be used to help these individuals open bank accounts, apply for credits, or get an education.

In a paper by the World Economic Forum, they suggest a blockchain-based identification linked to biometrics, where refugees will be provided with an on-chain biometric ID and cryptographic wallet. This wallet would not only securely store their biometric ID, but also any other relevant meta-data such as time and location stamps, and any other documentation provided by the individual.

They explain that “On the refugee side, with a new official identity, the refugee is instantly and officially recognized by an asylum state” and “from the receiving state’s perspective, identifying refugees on arrival allows for better monitoring and data sharing as part of a multinational effort for coordinating humanitarian assistance.”

Overall, decentralized identification solutions are still in their infancy, but in the long term, they have the potential to act as a cornerstone for building resilient communities capable of a swift and organized response to disasters, ensuring that aid and support are rendered effectively to those in dire need.

 

Organizing communities in support of disaster relief efforts

Web3 is the ultimate tool for coordination, and it can be a game changer for grassroots movements and communities of changemakers looking to organize in support of disaster relief efforts. One of the most prominent ways that Web3 can help communities organize, is through the advent of decentralized autonomous organizations (DAOs).

In their “truest form”, DAOs are a new structure for organizing communities, and are governed by smart contracts which are transparent, controlled by the organization’s members, and not influenced by a central authority. DAOs are designed to be open source and can be implemented at the local or global level, with the particular rules and operations of a DAO being controlled by its written code, and decision-making processes being handled through a consensus mechanism among its members, facilitated by blockchain technology to ensure transparency and immutability. More often than not, this will involve individuals acquiring “governance tokens”, which can be used to vote on community proposals. That being said, not all DAOs have governance tokens or are governed by smart contracts, and an alternative definition of a DAO could simply be a decentralized network of community members organizing around a specific mission.

A great example of a DAO that formed in response to a disaster, is Ukraine DAO. Ukraine DAO originally launched in February 2022 with the goal of raising funds to support organizations and individuals aiding Ukrainian’s amidst the war, and to date, has facilitated over $7 million USD in cryptocurrency donations. However, the DAOs efforts go well beyond fundraising, and have grown to include advocacy, Web3 education, and media literacy and fact-checking efforts. Ukraine DAO fits the latter definition of a DAO highlighted above, as there is no governance token or smart contract governing its operations. To become a member of the DAO, individuals can join their Discord server, fill out a contributor application, and join one of their many working groups.

Access to Financial Services

One of the challenges victims of disasters may face, is access to essential financial services. This could be due to damaged infrastructure, a lack of identification, or having to flee the area where one typically accesses these services. Blockchain is well suited to address this challenge by allowing individuals to access essential financial services, no matter where they are. This is one of the main premises of the Decentralized Finance (DeFi) movement, which aims to drive financial inclusion amongst the nearly two billion unbanked people around the world.

A great example of how blockchain can help individuals access financial services can be seen in the recent launch of MiniPay, “a stablecoin-based non-custodial wallet that allows you to send and receive funds instantly using just a phone number.”

MiniPay, which is available on the Opera mobile browser, is built on Celo, and has near-zero fees, making it much cheaper than conventional money transfer options. The wallet holds funds in a USD stablecoin, while allowing users to make purchases in local currencies without converting. Furthermore, it opens the door to Celo’s network of applications, including fiat on- and off-ramp solutions.

Solutions like this could make it much easier for individuals to gain access to their funds wherever they are, simply by having a mobile phone with an internet connection. The Opera Mini browser even gives free daily data to users, ensuring easy access to the service regardless of if one has a mobile data plan. Tools like MiniPay could be a gamechanger by making it much easier for individuals to send funds to family or friends in need, simply by using their phone number.

 

Conclusion

The future of blockchain in disaster response is very promising. Blockchain technology's decentralized, transparent, and immutable nature makes it a potent tool for enhancing disaster response efforts. By enabling direct aid to victims of disasters, new tools for raising funds, identification solutions for victims, and new mechanisms for organizing the community, blockchain can significantly improve the efficiency and effectiveness of disaster response efforts. While challenges like scalability, integration, privacy concerns, and regulatory frameworks need addressing, the future holds immense promise for blockchain in disaster response. Through continued innovation and collaboration among stakeholders, blockchain could indeed revolutionize how we respond to and prepare for natural and man-made disasters.

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Drew Simon
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