Community Scoop

Bitcoin, blockchain and what it means for NGOs


Josie PaganiJosie Pagani
Council for International Development

The least interesting thing about Bitcoin is Bitcoin. It’s not entirely clear what the problem is that Bitcoin solves – why not trade in  tulips? And if we can pay for stuff online using old-fashioned money without ever having to go to an ATM, why do we need Bitcoin? Our currency might go up and down in value, but at least its intrinsic value is backed by governments. And gold has a value aside from its worth as a currency (we fill our teeth with it and make jewellery out of it). 

Who needs the extreme volatility of Bitcoin or tulips?

It’s the blockchain technology behind Bitcoin that has got many in the international aid and development sector excited. But it throws up curly questions for us about ‘Big Data’ and the privacy of the information we collect. Blockchain technology might help us collect more and better data and analyse it in a way that means we can help more people, but it doesn’t help us solve the problem about the privacy of the information we collect.

The Blockchain is invented by the same people who created bitcoin. It’s like an online version of  a spreadsheet that is duplicated thousands of times across a network of computers.

Imagine that this network is designed to regularly update this spreadsheet, and then you have a basic understanding of the blockchain. Information held on a blockchain exists as a shared — and continually reconciled — database that isn’t stored in any single location. Records are public and easily verifiable, and no centralised version of this information exists for a hacker to corrupt. Which all sounds great. And its true that its already proved its usefulness.

One recent example is the  blockchain-based digital identification system set up exclusively for Rohingya people in the ongoing humanitarian crisis.

According to a recent Devex article, it’s a ‘multilayered verification methodology to confirm Rohingya ancestry through a series of interviews and assessments that test on five areas: Geographical, social, language, culture, and occupational.’

A sort of digital identity programme that cryptographically proves Rohingya existence and family relations, and records them on a blockchain distributed public ledger. Rohingya diaspora can then use their unique digital identities to access crowd funded resources and empower themselves economically and socially.

Its not just about providing digital identification documents, it’s also about giving people financial autonomy and some control over their lives.

Nearly 2.5 million Rohingya refugees are benefiting from this scheme.

But the concerns about who should be collecting this data and who should have access to it remains.

Some have criticised the Rohingya project for ‘experimenting on a vulnerable community’. Muhammad Noor who set up the Blockchain ID project, himself Rohingya, says he was sick of waiting for the international community to come up with solutions to support his people stuck in refugee camps with no easy way to identify their identities. And while he recognises the risks of collecting and storing this data, he makes no apology for trying to empower people to take back some control over their financial lives.

The challenge for us as NGOs is to recognise the risks of big data collection and new technology as it emerges, and take the initiative to manage those risks ourselves, without losing the opportunities that new technology brings.

Neither can we wait for the right legislation to tell us what to do.

We need to acknowledge that while we are more conditioned to information scarcity, rather than an overflow of information, too much information can also paralyse response efforts, especially after a disaster. We get data from everywhere now – the internet, mobile phones, social media, mainstream news, earth-based sensors, and humanitarian and development drones.  All of these generate vast volumes of data during major disasters. Making sense of this flash flood of information requires new skills, systems, and policies.

We need standards, and guidelines for collecting, processing, analysing and disseminating data. And those systems need to be robust enough to survive in communities with poor electricity supplies and limited connectivity.  We need our staff to be trained to know how to protect data, in whatever situation they find themselves in.

New technology can help us do our job better, as long as we apply the same principles we would to any information we collect about the people we work with, whether that information is collected on paper with a pen, or via Blockchain and drones.

This blog has been contributed by a member of the ComVoices network

ComVoices is a Wellington based network of national community and voluntary sector organisations. It was established so that sector organisations would have a more powerful voice at Government level and in the community.

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