Blockchain is ‘not going to solve’ all sector's problems on its own

18 Apr 2018 News

Blockchain “is not going to solve everything” around issues of public trust and confidence in the charity sector on its own, but it does have potential uses, according to a charity technology expert. 

Speaking as part of a panel at yesterday’s Charity Technology Breakfast Briefing in London, Karl Hoods, who was until recently chief information officer at Save the Children, said the charity had identified ways blockchain technology could assist in delivering services to beneficiaries and improve the different Save the Children offices around the world shared information.

He cautioned those in attendance not to just look to invest in blockchain because of the “hype around it”. In response to a question from the audience about whether STC explored blockchain because of a request “from the chief executive or the board of trustees” Hoods said “it was the opposite situation really, we identified certain ways we thought this technology could be useful to us and then took that to the chief executive and board”. 

Hoods, who recently stepped down from his role with STC to join the civil service, said the charity looked at blockchain to facilitate “humanitarian passports” for doctors and other emergency volunteers as a quick and easy way of validating their identities and background checks at short notice. 

He also said blockchain could be useful for STC when it comes to “remediation” - moving funds from a donor in the UK through to a beneficiary in another country without paying bank fees for changing currencies or processing transactions.

“The ultimate aim was to see how we could improve the donation process which currently involves moving funds from a donor, through our network, to Save the Children UK, to Save the Children International, out to a country office and down to a beneficiary. 

“That is an awful lot of steps with money being transferred from one member country to another, FX rates in changing that into US Dollars and then changing back out in the country”. 

Despite the exciting possibilities presented by blockchain and other cryptocurrency technology, Hoods said its not a silver bullet to all the problems faced by the voluntary sector. 

“Blockchain is not going to solve absolutely everything. The thing with all of the potential for blockchain, is that it’s wrapped up in problems that need solving. Blockchain isn’t the solution on its own. It’s going to come down to policy and lots of other factors.”

Up to a decade before it's scaleable 

The panel of charity technology experts also differed on when blockchain technology would be widely used.   

Tris Lumley, head of development at NPC, said it would be “at least 10 years” while Raphael Mazet, chief executive of Alice, a technology company trying to harness “blockchain for good”, said it could be as soon as “two years" from now. 

“It’s going to be much quicker than a lot of people think. Whether it’s going to be five or two years, I don’t really know,” said Mazet. “Certainly what you will see over the next couple of years are real blockchain things. Public blockchains coming out.

“It’s going to take time for people to get used to it. It’s going to take time for people to test, iterate, break, fail and all the rest. But one thing that you can’t forget is just the humongous amount of money that is being poured into this space and the tremendous amount of incentives for people to succeed.”

Lumley however argued that even if the technology itself is at a scale where it can be marketed, he remains unconvinced of the sector’s ability to take it up right away. 

“I think it’ll take at least 10 years. At least a decade to get to the point where those blockchain materials are ready to deploy is a long way off. 

“For example, impact measurement is a technology, a soft technology, and it has been around a long time. We kind of know how to do it, and it’s not mature. Let’s say 60 years and it’s still not fully matured and that’s got nothing to do with the tools and techniques themselves. It’s got to do with the fragmentation and the power dynamics of our sector and I don’t see any of this stuff changing that.”

Hoods said that “the blockchain market is incredibly immature at the moment and I’d be surprised if in the next five years we saw anything anywhere near stable enough to be massively production ready”. 

Civil Society Media is holding its next Charity Technology Breakfast Briefing on how we procure in the changing world of IT. Get more information or sign up here



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