The Blockchain Movement is here and we’d better get on board.
In 2017, the cryptocurrency bitcoin hit the news. For better or for worse, blockchain is becoming integrated into our lives.
In this article, we review the history behind blockchain, analysing how it became a movement that aims to revolutionize the way we store and transfer and register value, challenging some of the most powerful public and private institutions of the world.
And we will look to the practical implications of this technology, in particular, the uses of it in the third sector.
Blockchain movement. How did it begin?
In October 2008, Satoshi Nakamoto published a paper on the cryptography mailing list at metzdowd.com describing the bitcoin digital currency. It was titled “Bitcoin: A Peer-to-Peer Electronic Cash System”.
The purpose was to create “a purely peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution.”
In January 2009, Nakamoto released the first Bitcoin software that launched the network and the first units of the bitcoin cryptocurrency, called bitcoins.
Moving forward to 2018, more than 1,000 digital currencies have been created holding a total market value greater than the GDP of Turkey (as of 7th of January 2018).
The open source-ledger that drives bitcoin is blockchain. Blockchain essentially allows any transaction made in cryptocurrency (the most famous one being bitcoin) to be done chronologically and transparently.
Blockchain movement. Identity.
What started as a proposal for the creation of a new form of electronic cash ended up turning into a huge movement built around values like decentralization, openness, disintermediation and ideas like peer-to-peer trust-less transactions and unchangeable records.
The development of the blockchain movement follows some of the core elements of the movement building canvas.
From its very inception, core values around decentralisation and openness formed the basis for this new form of technology.
Blockchain movement. The Journey.
Next came the journey. Satoshi’s proposal required a rather big network to guarantee its own safety. The more decentralized and distributed the network, the safer it would be.
In order to achieve this goal, an open software was made available and it could be run on any personal computer.
The reward for running the program (mining) was bitcoin, the electronic coin that could potentially be used to buy things.
This act displays the key role that rewards and incentives play in building out a movement.
Offering economic incentive to spark the adoption of bitcoin offered an incentive to push the boundaries.
As a very-early adopter comment in the forum bitcointalk, “I’ll be honest, it was greed. Also, part of it was having the opportunity to be part of something new[…].”
However, the economic incentive by itself it would not have succeeded and spread so fast.
In 2009, those rewards so-called bitcoins were worth virtually nothing and most people did not know whether they were going to be worth something someday.
It was this, coupled with the core values and shared purpose that reflected those of many existing online communities.
Just like the Internet movement in the early 90s was about transferring and storing information, blockchain promises decentralization, around transferring and storing value.
The very-early supporters wanted to be part of a revolution that was to come.
Blockchain movement. The Enablers.
Now we’re brought to blockchain in its current state.
The blockchain is facing the challenge of moving from just offering a great journey, to questions of organising, communicating and sustaining the movement.
This final aspect of the movement building canvas is often the hardest to integrate.
It’s about strategy, implementation and constant innovation.
To show some figures, just in 2017, about 30,000 people lost money in blockchain-related cybercrime, losing over $225 million in total.
Despite this, the movement is now more alive than ever.
From the most closed and hierarchical corporation blockchain projects, that are adopting this technology to improve their efficiency.
To the most revolutionary, open-source and decentralized applications, including banking systems, business management, equity distribution and property registry among hundreds of other applications.
Blockchain and Social Innovation.
Just in the same way, charities are approaching or being challenged by this technology in different ways. From the most very basic applications to the most game-changing projects.
Some charities have already started using blockchain.
However, if you are a charity manager, do not panic. The applications available in the market are still rather limited, and the game-changing projects will take a few years to be fully developed.
In most cases, the best you can do as a charity is to experiment with these applications as they become available.
Do you really need to understand the technology? Probably not… Do I believe the blockchain will take over the charity sector? Absolutely not.
However, just as happened with the internet in the late 90s, early adopters of this technology may have a great opportunity to gain a competitive advantage over other charities. But why?
What does the Blockchain Movement bring to the social sector?
Fundraising is a cornerstone activity for charities, and as such, one where considerable amounts of money are spent on transfer fees.
The first and easiest application of the blockchain for a charity consists of simply opening a cryptocurrency wallet (such as Bitcash) and immediately starting accepting such a cryptocurrency as a donation.
You may not only save a lot of money in fees but also minimize the transaction processing time from days (international transfers) to just a few seconds.
Here you may find a couple of examples:
My second example of an application of the Blockchain in the Social Sector comes from the United Nations.
In June 2017, the UN delivered cryptocurrency-based vouchers to more than 10,000 Syrian refugees that could only be used to purchase food items.
This is another characteristic of the cryptocurrencies. You can code them so that the money can only be released under certain prescribed circumstances, a characteristic that many funders may value.
Getting a step closer to the type of disruption that this technology is meant to open, applications such as Aragon will allow you very soon to manage your organization in a decentralized and radically transparent way.
With no intermediaries at all, founders may crowdfund projects, shareholders may vote decisions and donors may visualize where their money’s spent, with total transparency in real time and with virtually no bureaucratic friction.
Another big social problem in which the blockchain could play an important role is the service of the unbanked and underbanked people around the world.
Thanks to the decentralization and the low transaction costs, through their applications, a smartphone is all you need to create your virtual wallet and access financial services before only reserved to a few.
While most innovative applications of the blockchain for social change are still in their infancy and may not be ready to be used, time flies even faster in the blockchain world.
Many charities’ values will naturally align with the core values of the blockchain movement.
We’re in an exciting period of the movement where innovation is brewing and new forms are emerging daily.
The challenge remains that the core values of decentralisation, openness and transparency don’t get lost in the testing stage.
And, crucially, that these developments can be communicated directly to the rest of the public.
We’re excited about the future of this movement – and it’s only just getting started.
Don’t hesitate to leave your comments or drop me a line!