How blockchain and cryptocurrency can help in times of crisis
Over the past couple of years, the world has experienced an unprecedented number of crises, including climate emergencies and extreme weather events, food shortages, global pandemics, large scale unrest, and war.
During times of crisis, it is common for humanity to look to new technologies as a way to help vulnerable communities most at risk and in need of urgent help. Over the past couple of years, some of the most surprising technological developments have been the innovative ways that cryptocurrency and blockchain have been used to help those in crisis.
Emergency fundraising
One of the most obvious ways that blockchain has helped in times of crises, is by providing a way for humanitarian organizations and even governments to rapidly raise funds. What’s so special about cryptocurrency, from a fundraising perspective, is that it enables organizations and individuals to quickly receive funds, across borders, at a low cost. Instead of having to wait days for a bank transfer, or pay a hefty fee to transfer funds across borders, cryptocurrency cuts out the middleman, allowing for the instantaneous transfer of funds to those in need.
One example of this can be seen in the response to Russia’s War in Ukraine. In the day’s following Russia’s invasion of Ukraine, the web3 community rallied in support of Ukraine, launching several fundraising initiatives to support humanitarian organizations working on the ground in Ukraiune, 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 accept direct donations.
As a result, humanitarian organizations in Ukraine as well as the Ukrainian Government have received roughly $175 million in cryptocurrency donations since the beginning of the war.
In addition to the funds being used to provide direct aid to those in need by humanitarian organizations, one of the questions being asked about donating crypto directly to Ukraine, is whether or not it is actually helpful, and if they are able to utilize it, or if it’s just sitting in their wallet.
The Deputy Minister of Digital Transformation, Alex Bornyakov, has explained how crypto donations have been an essential part of the equation for Ukraine. In fact, he mentioned how crypto donations have been essential, nothing that, since “the national bank is not really operating, crypto is helping to perform fast transfers, to make it very quick and get results almost immediately.”
This demonstrates the true value of crypto donations: the ability to move finances quickly and efficiently, with little to no infrastructure. Despite the banks being effectively shut down, the Government of Ukraine has still been able to receive funds, and pay vendors, via cryptocurrency.
Transparency and accountability
Another innovative use case of blockchain in times of crisis, is how it can help hold governments and individuals accountable through radical transparency. Blockchain is perfectly suited for this as it provides a way to store information on an immutable record to be preserved indefinitely, free from censorship.
One example of this can be found during the recent authoritarian crackdowns in Hong Kong. As a part of the crackdowns, the pro-democracy newspaper, Apple Daily, was forcibly shut down. In response, cyber activists in Hong Kong started uploading documents and articles from the newspaper to a censorship-proof blockchain, so that the articles from the newspaper could live on forever.
What makes blockchain so special when it comes to preserving information, such as critical media sources? Well, as highlighted above, the primary benefit of this technology is that it is censor-proof. By storing information on an immutable blockchain, it means that it is truly tamper proof. Unlike a social media platform that governments could easily regulate of even shut down, as has been seen many times before, they simply cannot do this with a blockchain, as they don’t have the power.
By their very nature, most blockchains are decentralized, meaning that no one individual or entity has the power to take control of it, thus making it extremely difficult to tamper with. Governments would not be able to go on and simply erase something from a blockchain. Within a blockchain, vital documents, pictures, movies, article, and audio, could live-on forever.
Another example of how blockchain can be used for transparency and accountability is through the documentation of war crimes, such as those being perpetrated by Russia in Ukraine. Since the beginning of Russia’s invasion of Ukraine, many reports of war crimes have come in, and investigators have been hard at work gathering evidence to hold those responsible to account. Blockchain can help by providing a secure and transparent way to document evidence of war crimes.
Jaya Klara Brekke, Chief Strategy Officer at Nym, a Cosmos-based platform explains how their tool, AnonDrop, can help:
Their platform would allow users to report data to the Filecoin network without revealing their location, by protecting them against IP tracing, metadata surveillance, and preventing anyone from “watching the network”. At the same time, the data would be uploaded to an immutable, censor-proof network, ensuring that those whom the evidence is being gathered against, can not interfere and alter any of the evidence.
Direct aid to those in need
Finally, Blockchain and cryptocurrency also makes it much easier to get aid directly to those in need. Above, we highlighted how cryptocurrency can help governments and humanitarian organizations receive funds much faster than through traditional means, but what about getting the funds into the hands of those in need?
Well, as you may have guessed, cryptocurrency is perfectly suited for this. There are many humanitarian projects that are making use of blockchain to provide aid directly to vulnerable populations, without the need for an intermediary who traditionally slows down the process and takes a cut of the funds.
One great example of this is Impact Market, a blockchain-based Unconditional Basic Income (UBI) program that, to date, has directly supported over 45,000 people with UBI in nearly 30 countries. In this case, individuals can donate directly to the smart contract of a community receiving UBI, such as those in a refugee settlement or war-torn region, or to the general DAO treasury. The funds are then directly distributed to those in need on a regular basis.
Cryptocurrency can be a highly effective solution to get funds to those who lack access to traditional financial services, such as refugees, or those in rural and remote regions. One example of a blockchain-based project supporting refugees, is the World Food Programme’s Building Blocks program, which has impacted hundreds of thousands of individuals, including those living in two refugee camps in Jordan. In these camps, 100,000 Syrian refugees now have the ability to purchase groceries using aid provided by the WFP by simply scanning their iris at checkout. This program is built on a private, permissioned blockchain, and integrated with pre-existing biometrics’ technology utilized by the UNHCR, enabling them to easily keep track of every transaction for monitoring and evaluation purposes. The use of biometrics could be of concern to some when considering user privacy, but there are also great benefits to this approach.
This simple process enables beneficiaries to no longer worry about safely storing and keeping track of cash or food vouchers, so they needn’t stress about losing them or having them stolen. Furthermore, whereas other blockchain-based platforms for marginalized populations often require a mobile phone to receive or spend aid, Building Blocks does not, thus increasing accessibility for those most in need.
Conclusion
During times of crisis, the world has leaned on new technologies to help those most in need. With difficult times likely ahead, this will be more important than ever to ensure essential support can get to vulnerable populations, including those impacted by extreme weather events, war, and authoritarian crackdowns. Of course, blockchain and cryptocurrency alone won’t fix these complex challenges. However, if used properly, and in conjunction with other solutions, blockchain can, and should, play an essential role in providing support in times of crisis.
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