A missing catalyst for blockchain adoption


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When most people envision the problems being solved and industries being disrupted by blockchain technology, typical use cases come to mind: global currency, stores of value, and even a way to keep track of goods in an immutable ledger.

A good starting point to understand what is driving the adoption of new technology is to take a deeper look at human psychology and understand what motivates the average person to participate in the cryptocurrency space. As of now, the lion’s share of users attending the space are doing so in pursuit of riches, which is not unlike what it was in the days of the gold rush. Hierarchy of Needs Creator Abraham Maslow wrote in his book:

“It is just as necessary for man to live in beauty and not in ugliness as it is for him to have food for an aching stomach or to rest for a tired body.”

While this innate pursuit of wealth and prosperity is in itself a powerful human motivator, there are even stronger human motivations that blockchain can soothe. The possible synergies between blockchain technology and philanthropy are best illustrated The bottom billion, a book by Professor Paul Collier of Oxford University, which examines the reasons why impoverished countries do not move forward despite international aid and support. In the book, Collier argues that there are 60 countries whose 1 billion people saw little or no income growth in the 1980s and 1990s. Although Collier is investigating several “development traps” these countries can fall victim to, two in particular can be disrupted using blockchain technology: poor governance and the natural resource trap.

The raw material trap

As a result of systematic repression, many of these countries in the bottom billion have governance problems that prevent the countries from thriving. The most noticeable governance problem in many of these countries is corruption. A total lack of transparency by authoritarian governments with little to no democratic values ​​such as freedom of the press and freedom of speech creates a black hole that absorbs all resources coming into the country. In addition to the apparent corruption, financial policies in some of these countries are poorly formulated by regulators who do not have the experience or educational background to develop and maintain a solid economic environment.

Blockchain technology is a good solution to both problems. By having an immutable ledger that cannot be tampered with by anyone, regardless of power or influence, a country can have a transparent and trustworthy view of its country’s natural resources and means. In addition, the use of blockchain technology protocols as a store of value could bring economic stability to these countries, which are often exposed to massive inflation, bank runs, and tight currency controls. The ability to have a source of value completely independent of the reach of their government and the economic troubles of their country would help millions of people around the world fight poverty.

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The link to corruption and governance issues is the natural resource trap. Paradoxically, countries that are rich in natural resources usually do worse than other countries. Natural resources make conflict all but inevitable as opaque government officials often use surpluses for their own benefit. Fortunately, with the recent explosion of asset tokenization companies, blockchain technology offers a viable solution to ensuring that a country’s prosperity is properly harnessed for the benefit of all, not just a few autocrats.

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How does that fit in with philanthropy? The reality is that philanthropic efforts can only reach their true potential in a transparent and trustworthy system. Unfortunately, over the past few decades, some pretty ugly stories have surfaced about forms of aid that have been misused or stolen. Often times, the opaqueness of the systems in place prevents philanthropic efforts from ever really reaching the people in need without someone taking responsibility for how the aid was used or where the resources went. A good example of how blockchain technology can be used to directly influence philanthropic needs is the work of Mercy Corps, a non-governmental humanitarian aid organization in Uganda.

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The ability of blockchain technology to provide relatively cheap and scalable trusted systems could be the catalyst many philanthropic organizations have been waiting for in order to make greater strides in their humanitarian endeavors. These tools provide a way to ensure that resources actually hit the “bottom billion” who are in trouble, and can be a starting point for finding accountability when resources go missing.

The views, thoughts, and opinions expressed here are the sole rights of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Jarred Winn is a blockchain philanthropist who has advised the nonprofit and philanthropic arms of the world’s leading cryptocurrency exchanges and has collectively raised millions for blockchain philanthropy and COVID-19 initiatives. Previously, Winn was the co-founder and founder of Winn.solutions, a strategic blockchain advisory and advisory firm. Additionally, Winn co-founded Mindful Miracle Schools, a California nonprofit school where he leads partnerships and business activities.