Just a few months back, under the Jordanian sun, the 10 000 Syrian refugees of the Azraq Camp were exulting upon the reception of the aid that they had been awaiting for so long. But to their great surprise, it did not come to them in the form of water and food carried by a trail of white and blue UN trucks – the scenario they had been accustomed to thus far. Instead, for this particular humanitarian mission, the World Food Program came up with an interesting and well-thought plot twist. The organization distributed aid through electronic vouchers that would make use of the blockchain-based cryptocurrency Ethereum!
Blockchain is an online ledger that helps track transactions
The implementation of blockchain-powered Ethereum into the distribution of aid to Jordan-based Syrian refugees was a resounding success. Robert Opp, WFP’s director of innovation and change management, even made the following statement after the facts:
“When I think about blockchain, it is not just about San Francisco and New York. If cryptocurrencies can reach the poorest people in the world, the most vulnerable people in the world, I really think they could initiate a transformation story.”
Those few words alone are enough to garner some intrigue around blockchain and Ethereum. New York and San Francisco? Cryptocurrency? What is this all even about? And how did all of it play in the making of a successful UN operation? Well, the concept behind the electronic fund transfer in question is, in fact, way less complicated than one might think.
To start with, a cryptocurrency is a digital form of currency. Opp’s references to New York and San Francisco imply that those transaction methods’ initial algorithms can be traced back to the big cities that are known for bringing innovation to the table. And cryptocurrencies would be quite innovative indeed! They are actually completely autonomous – which means that they are powered exclusively by algorithms – and unregulated by federal authorities – which implies more stability and less inflation. One of the most famous digital currency is Bitcoin. It is commonly exchanged for services, content, or even other currencies. Ethereum, which is relatively new, uses the same blockchain technology that powers Bitcoin, even though the former not as widely utilized as the latter.
Blockchain is an online ledger system that verifies and accounts for every single transaction made by online users. Simple put, it prevents multiple transactions to use the same cryptocurrency funds. Through this method, every penny is accounted for, and no human intervention is required. Speed and reduction of cost is therefore implied. Using this medium, the WFP first converted American Dollars to Jordanian Dinars in order to finally distribute aid in the form of electronic vouchers to the Syrian Refugees of the Azraq Camp.
Blockchain can be very useful to the UN
Turning to blockchain could be tremendously beneficial to the UN. Given that several aspects of the organism could potentially flourish through the use online ledger systems, major agents are already working on ways to implement the technologies in question as part of the UN’s usual protocols. The projects that this colossal framework of efforts supports are indeed very ambitious.
Distribution of aid
The Jordan humanitarian mission led by the WFP was actually part of a pilot program dubbed Building Blocks. It was hopefully the first of many efforts in the direction of blockchain implementation. Even though the UN does not count any online ledger facilities amongst its current fund transfer protocols, the great adaptability of the blockchain might soon be more present within the organism’s ecosystem. Furthermore, the UN is a huge organism, and therefore, efficiency and transparency is a must. Since issues have been encountered with both aspects of monetary transactions in the past, utilizing a method with an innovative tracking system and fast transfer speeds would benefit provision of aid.
During the UN Climate Conference held in Bonn, Germany last May, Alexandre Gellar of the UN’s Framework Convention on Climate Change pushed forward that “blockchain could contribute to greater stakeholder involvement, transparency, and engagement and help bring trust and further innovative solutions in the fight against climate change, leading to enhanced climate actions.” More specifically, the online ledger system could be used to trade carbon assets. Carbon assets allow the companies that own them to emit a predefined amount of greenhouse gases. Companies can buy and sell these as regular assets. This form of trade could potentially benefit from the efficiency and transparency of the Ethereum blockchain. In fact, IBM and Energy Blockchain Lab are currently trying to adapt blockchain to China’s carbon trading market already.
More than a billion people are not currently recognized by a government at the time of writing. This means that about one eight of the world’s current population cannot access the protection and services provided to the citizens of a state. Some of those essential facilities would include education, health care, voting, the ability to open a bank account, etc. Since the UN considers this as being a major problem facing the world today, it has decided to “provide legal identity to all, including birth registration, by 2030.” The ID2020 Alliance – a new organization composed of UN agencies, nonprofits, companies, governments, and other enterprises – believes that building a digital ID network is possible through Ethereum and blockchain. In June, Accenture and Microsoft already presented a prototype that would make identity personal, persistent, portable, and private.
About 200 million migrant workers send money to support their 800 million family members every year. In 2016, the funds moved through the transactions involved totaled 400 billion dollars and incurred remittance fees of more than 30 billion dollars. Through Ethereum, no authority or middleman needs to be remunerated. Therefore, transactions would be free, saving migrants precious amounts that could help the family they have back home to afford even more food, healthcare, and education. Blockchain is also faster, easier, and more secure for both senders and receivers.