Blockchain Morningfuture
Imagining Investigation 9 April Apr 2018 0830 9 April 2018

Blockchain, opportunity or trap for the voluntary sector?

A journey into the technology of the future that aims to revolutionise the world of donations and fundraising. But if, on the one hand, dedicated new cryptocurrencies continue to spring up, on the other experts counsel caution.

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"The first thing that needs to be clarified in talking about blockchain is that it is not a definition that identifies a topic of interest or a macro-category. It is not the latest buzzword that will become obsolete like the cloud or disruption. The blockchain is a very complex infrastructure based on encryption, game theory, economics, currency theory and network theory. An extraordinary technology because for the first time it creates something in the digital world that is scarce and non-duplicable, as opposed to that world’s typical superabundance and reproducibility. An incredible innovation." The speaker is Emanuele Cisbani, technology evangelist at Intesi Group spa. "To make a credible parallel we have to think about the birth of the Internet. But in this ​case it is not any old information but information that has a transferable value."

Blockchain is not the latest buzzword that will become obsolete like the cloud or disruption.

Emanuele Cisbani, technology evangelist at Intesi Group spa

The questions that many people ask are not so much how it functions technically, but what it is for and whether or not it can be useful. "It is too early to give complete answers," says Cisbani who, however, emphasises that "its utility is undeniable, just think that it makes traceable and transparent something that has historically always been linked to the most solid of guarantees like gold. But these technologies have only just come into being, they are effervescent, just like dot-coms in the beginning. There are more than 1,500 cryptocurrencies in circulation, the majority of which are scams."

Transparency and traceability. Exactly what the voluntary sector is seeking in the field of donations and donor loyalty. "There have been varied experiences in the non-profit world built around the blockchain. One that stands out is Lumen, a cryptocurrency offered by the Stellar organisation, designed to meet the needs for access to financial services of those without banking facilities in the Third World. So really interesting opportunities are opening up for everyone. But you have to be careful," Cisbani concludes.

The blockchain opens up very interesting opportunities for everyone. But you have to be careful.

Emanuele Cisbani, technology evangelist at Intesi Group spa

Francesco Nazari Fusetti, founder and CEO of Charity Stars, who has just launched the AidCoin virtual currency, thinks along the same lines. "AidChain, our own blockchain, can be seen as a public register traceable on the web where each transaction is visible and verifiable online by anyone. Unlike a bank account that is visible just to the holder, we make the whole donation system transparent," he says, "it will be a very intuitive and simple interface, as opposed to the blockchains dedicated to professionals. It will therefore be easily understood and usable both by donors and by small associations. Anyone can donate and receive donations through this interface. As well as checking where and how every single donation has been used."

A tool designed precisely to solve the problems of non-profit organisations in the field of fundraising, according to Massimo Coen Cagli, Vice President of the Italian Fundraisers Association: "Reporting has significant value in the world of fundraising." Reporting on the money that donors have invested in projects in clear and accurate fashion, and in this way earning their loyalty, is the great challenge of today.

"This is what led us to design AidPay," adds Fusetti, "an online payment tool. If AidChain can be seen as a sort of eBay for donations, AidPay is a PayPal dedicated to cryptocurrencies and the voluntary sector. Through this tool, associations will be able to accept donations and donors can make their donations."

It is early days for investing and it is very risky. We need skills, expertise and strategies that cost a lot.

Emanuele Cisbani, technology evangelist at Intesi Group spa

To overcome the problems of opacity, disruption and even embezzlement in the sector, another Italian startup, Helperbit, is using the blockchain to offer traceability and disintermediation for donations, adding geolocation too. "After the scandals of the funds for the earthquake in Central Italy, we developed a platform that, thanks to Bitcoin's blockchain, allows for traceable donations that go straight to the intended destination," explains the CEO Guido Baroncini Turricchia. Donors can access the geolocalised emergency map created with GIS (Geographical Information System) by the startup and donate in Bitcoins directly to the NGOs present in the field and their projects.

The blockchain, therefore, offers itself as a decisive innovative factor for the voluntary sector, capable of solving major problems. Although, according to Emanuele Cisbani. "It is early days for investing and it is very risky. We need skills, expertise and strategies that cost a lot. Today the dominant logic of these instruments is financialised and speculative, precisely because those who have the resources to properly invest in technological infrastructure like this are the banks and funds. That does not mean that it will be the same in the future. We shall have to wait and see.”

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