Giving That Can Last

Technology has the power to improve people’s lives — and not just by supplying flying cars to millionaires. The computer networks that brought us Bitcoins are advancing in ways that will make humanitarian giving simpler and more secure than ever.

These networks are called blockchains. They are decentralized digital ledgers that allow for an incomparable level of transparency and are equipped with cryptography-based security, making them optimal for making and monitoring transactions. Simply, they take out the middle man (banks) and make the transfer of funds more streamlined and safe.

The United Nations (UN) chose one specific blockchain, Ethereum, to distribute funds from the World Food Program (WFP) in a pilot program earlier this year. The experiment was a success, distributing aid to 100 people in Pakistan.

Meeting a Need

The UN will be putting Ethereum to an even greater challenge now, because, having started May 1, the system will now be used in Jordan to distribute funds to more than 10,000 people. To protect the privacy of those who accept WFP aid, the monetary amount being dispensed is not being announced. Assuming all goes according to plan, the UN expects to use the blockchain to help support 500,000 recipients by 2018.

This program is designed to demonstrate the aptitude of blockchain technology for distributing humanitarian aid to people who need it. It is also a strategic investment for the UN, as the resilient digital infrastructure could allow these charitable services to outlive the UN itself.

The UN is considering more ways it can use blockchain to optimize aid distribution, WFP financial officer Houman Haddad said in an interview with CoinDesk. Strategies include sending funds directly to food stores instead of the actual recipients, thereby cutting down on transactions, and potentially using cryptocurrency instead of state-issued currency to circumvent currency volatility.

With the power of blockchain, the WFP can potentially (and more effectively) help 80 million people each year — and maybe even expand that number.