10,000 Syrian refugees waiting for aid at Azraq camp in Jordon received help quite early, but not from the typical white and blue trucks from the United Nations’ World Food Program (WFP). Support came in the form of electronic vouchers backed by the most talked about technology these days i.e, Blockchain, specifically the Ethereum Blockchain.
Because of the immense success of this venture, many UN agencies have come forward backing Blockchain Technology that it could be used not only to distribute aid to refugees, but for various other philanthropic purposes too.
Eheterum is the second most valuable cryptourrency in terms of market capitalization after Bitcoin , that functions largely like traditional currency, but entirely in a digital environment, heavily encrypted, stored and transferred using electronic devices.
A key selling point is that the cryptocurrency is decentralized which means it is not regulated by any central authority like US Federal Reserve Bank, but the currency’s value is limited to preset logarithmic growth and the value depends upon the demand and supply.
The cryptocurrency is easy to transfer across borders – a factor which can enable criminal deeds because financial transactions cannot be traced easily the way it is possible through highly-regulated traditional financial systems.
The technology that backs the cryptocurrencies is Blockchain, which is a distributed ledger technology to record all transactions. It makes use of private key cryptography and peer-to-peer networking for secure decentralized distribution.
As per United Nations, Blockchain is:
“A distributed database that is continuously updated and verified by its users. Each added block of data is ‘chained’ and becomes part of a growing list of records, under the surveillance of network members. This technology enables the transfer of assets and the recording of transactions through a secure database.”
UN aid efforts have been contaminated by mismanagement, fraud, and bureaucratic red tape, but Blockchain can make the system quite efficient by circumnavigating government and banking institutions.
With own internal code, Ethereum is complete in itself and can execute any algorithm. This makes it more adaptable to anything, not just cryptocurrencies.
5 ways United Nation sees potential with Blockchain Technology:
1. Aid distribution
As stated above, the Word Food Program has deployed Ethereum blockchain in a pilot program known as “Building Blocks” to distribute food vouchers to refugees in Jordon. Now it is being planned to expand the program to other Eighty countries where WFP operates.
This is just the beginning, and experts are brainstorming to exploit the potentials of Ethereum Blockchain technology.
2. Climate change
Using the Ethereum blockchain, it was proposed tocombat climate change at the UN Climate Conference in Bonn, Germany last May.
An officer of the UN’s Framework Convention on Climate Change, Alexandre Gellert Paris, said 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.”
Blockchain could be used to facilitate trading of carbon assets. Companies can buy and sell these like any other asset, and the market can take advantage of the increased efficiency and transparency of the Ethereum Blockchain.
In fact, IBM along with a new firm called Energy Blockchain Labs is striving to adapt the Blockchain to China’s carbon trading market.
In addition, experts at UN Climate Conference also suggested using Blockchain to develop peer-to-peer renewable energy trading platforms to buy and sell digital assets, facilitate crowdfunding for renewable projects and tracking the reduction of greenhouse gases.
Digital identity is a hot topic these days. Currently, over a billion people are not officially recognized by a government, barring them from services offered to citizens like education, health, etc.
As per UN, this is a major problem faced by the world, which has prompted UN to begin measures to “provide legal identity to all, including birth registration, by 2030.” However, it is more difficult than it was originally envisioned.
But, the ID2020 Alliance – a new consortium of UN agencies, companies, non-profits, governments and other organizations – believe that they can reach this goal by creating a digital ID network on Ehtereum blockchain. Last June, during the organization’s second summit at the UN headquarters, Microsoft and Accenture presented a prototype to create a unique ID for everyone, and that would be personal, persistent, portable and private. It can be accessible from anywhere, but given out only with a permission.
As per UN estimation, there are about 200 million migrant workers who send money across borders to support over 800 million family members. UN’s International Fund for Agricultural Development (IFAD) states that this helps lift millions out of poverty by providing them food, housing, healthcare, education and sanitation. Unfortunately, a lot is spent as remittances, approx. over $30 billion annually, whereas charges are particularly high for poorest countries and remote rural areas.
Ethereum blockchain could be the solution by removing middleman and allow free transactions, thus reducing the billion-dollar burden. It would also lead to faster transactions, ease of use and enhanced privacy to sender and receiver. IFAD and other UN organizations are actively searching on this.
5. Smart contracts
The UN’s International Children’s Emergency Fund (UNICEF) is thinking about employing Ethereum blockchain for enhanced transparency and reduce the “cost of trust.” Because of the difficulty of tracking international transactions, conducted innumerable times by UN, they have to suffer from mismanagement, including the potential of fraud.
Smart contract could help solve the problem. As per UNICEF, this contract will be executed on Blockchain rather than having a third party to enforce it.
For example, if person A wants to buy a password from person B, they could enter into a contract that password will be released when an agreed amount of cryptocurrency will be transferred. Transaction will be saved on a public ledger, ensuring transparency and efficiency.
There’s still more on the plate
Since its release in July 2015, Ethereum blockchain has garnered immense attention. Several organizations have started working on it, UN has embraced it, and various major projects are about to launch. In the beginning of October, a major summit will happen at UN Headquarters in New Yorkwhere which the Digital Blue Helmets, the UN’s branch of technology experts are expected to release some exciting applications of Ethereum blockchain.
To conclude United Nations sees the potential of Blokchain Technology in Aid Distributions, Climate Change, Identitiy, Remittances and Smart Contracts.
To know more about Blockchain technology based used cases around the world, visit our “BLOCKCHAIN SECTION”.
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