{"id":1495,"date":"2018-11-08T13:17:49","date_gmt":"2018-11-08T13:17:49","guid":{"rendered":"http:\/\/www.unhcr.org\/blogs\/?p=1495"},"modified":"2018-11-19T13:11:29","modified_gmt":"2018-11-19T13:11:29","slug":"aid-groups-now-using-the-same-data-technology-as-bitcoin","status":"publish","type":"post","link":"https:\/\/www.unhcr.org\/blogs\/aid-groups-now-using-the-same-data-technology-as-bitcoin\/","title":{"rendered":"Aid groups now using the same data technology as bitcoin"},"content":{"rendered":"

By Robert Stevens. This blog was originally published on the Associated Press News Webiste<\/a>.\u00a0<\/em><\/p>\n

\"\"

Scenes from the daily life inside the Azraq camp in Jordan where refugees live in a cluster of camps about 90kms away from the Syrian border. The camp is fitted with facilities such as a hospital for emergencies, a clinic for women and children, lifestyle and creative facilities, and also livelihood training centers to cater to the needs of the refugees.\u00a0\u00a9 UNHCR\/Veejay Villafranca<\/p><\/div>\n

LONDON (AP) \u2014 In the Za\u2019atari refugee camp in Jordan, Amar Al-Eid heads toward the checkout of the food distribution store carrying supplies for his two children. The shopkeeper raises a black box to his face and scans the Syrian refugee\u2019s iris. The transaction goes through and a day\u2019s rations are secured.<\/p>\n

The data technology that underpins virtual currencies like bitcoin is now also used to deliver aid more efficiently by dramatically lowering the risk of bribes and fraud by local officials \u2014 a huge, longstanding problem in the industry. The so-called blockchain keeps a record of all transactions and buyers, making sure recipients like Al-Eid get their goods without the added costs of graft or bank transfer fees. And donors can track the use of their aid money, all the way to the refugee family it helps survive.<\/p>\n

\u201cIt\u2019s a very easy process and it doesn\u2019t have any complications,\u201d says Al-Eid, before taking the food off to his family.<\/p>\n

The UN\u2019s World Food Programme has been testing the use of blockchain technology since 2017 to manage aid for over 100,000 refugees in camps in Jordan, which hosts over 740,000 people from neighboring countries like war-torn Syria. It aims to extend it to 500,000 refugees by the end of March. Other international organizations, including the World Bank, UNICEF and the Red Cross, are looking at ways to implement blockchain into their own projects.<\/p>\n

Blockchain is an online ledger of transactions spread across a global network of computers that use their processing power to verify any changes. It is most famous for being used to support virtual currencies like bitcoin, but can in practice be used to track any system of payments or data transfers. In the refugee aid system it is testing, the UN does not use virtual currencies but dollars. The blockchain technology helps it know where every cent is, from the moment it is donated to when it is spent on a physical good.<\/p>\n

And that can mean huge savings.<\/p>\n

Former UN Secretary General Ban Ki Moon has said that in 2011, some 30 percent of aid donations – around $40 billion, according to one estimate – failed to reach intended recipients because middlemen skimmed some off of top and corrupt officials often took a cut.<\/p>\n

Ultimately, the system helps those who receive the money by making more of it available and reduces the concern among donors that their money will actually be used for the intended purpose.<\/p>\n

\u201cWe have this rapid ability to understand where our money is throughout the process,\u201d says Gustav Stromfelt, one of the project managers working on the WFP\u2019s program. \u201cIt improves the transparency, accountability, and communication across the board.\u201d<\/p>\n

Because the data is spread across so many computers, a thief would have to take control of the entire network \u2014 potentially thousands of terminals \u2014 to fudge the numbers and make off with the money. That would require an enormous amount of computing power, so it wouldn\u2019t be profitable.<\/p>\n

That doesn\u2019t mean smaller thefts can\u2019t occur. So far in 2018, about $1 billion worth of virtual currencies backed by blockchain has been stolen, according to cybersecurity firm Carbon Black. But these thefts are typically carried out through hacks of the end users by, for example, entering the email account of a person to get their passwords to open their virtual currency accounts and take the money. The thieves do not take control of the blockchain system. It\u2019s like comparing pickpocketing to entering a bank\u2019s vault.<\/p>\n

The blockchain doesn\u2019t use middlemen like Western Union or PayPal, meaning the costs of transferring money are reduced by 98 percent for users like the WFP. That translates to savings of over $40,000 per month for the UN agency.<\/p>\n

Smaller charities are also testing out blockchain.<\/p>\n

Last year, the London-based homeless charity St. Mungo\u2019s tested a blockchain platform to monitor the use of donations and prove they were being spent on improving the recipients\u2019 lives. Only then would more donations be released.<\/p>\n

The data can also help make aid more efficient by tailoring the service to the needs. For example, in one project in Tanzania, the blockchain system could show that a particular woman regularly visited the local doctor once a week to buy medicine for her child. So when she missed an appointment, the charity, AidTech, had a social worker bring the medicine to her the following morning.<\/p>\n

\u201cWe\u2019re able to show more data on the first two women using the platform than the organization could with over 10,000 women when they were using a paper-based system. That means we can be far more responsive,\u201d said Joseph Thompson, founder of AidTech.<\/p>\n

The system does have its downsides. In practical terms, having aid released only upon an iris scan means a busy mother, say, would not be able to ask her child to go get the aid rations for her instead.<\/p>\n

The way the transactions are verified can also be patronizing. The blockchain aid for the homeless, for example, ensures the money is used for productive purposes like shelter rather than alcohol or drugs, implying a lack of trust that can be degrading for the receiver.<\/p>\n

And there are broader questions about privacy rights, as the data can track the actions of individuals. While personal details like names are encrypted, the record of transactions is viewable to anyone with access to the blockchain. The issue is all the more delicate when the people tracked are vulnerable, like stateless refugees.<\/p>\n

Some UN officials are aware of these risks, and there is a debate about whether to ramp up its use across aid and development projects.<\/p>\n

\u201cWe will not store any sensitive personal data (on the blockchain), especially of such a vulnerable population as refugees, with a technology that still needs to prove its merits,\u201d says Karl Steinacker, a deputy director at the UN refugee agency.<\/p>\n

For Al-Eid, such questions are secondary while he tries to keep his family safe and nourished.<\/p>\n

Without the donations, \u201cpeople wouldn\u2019t be able to live,\u201d he says on his way out of the food shop. \u201cThe assistance is very good.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Associated Press journalist Robert Stevens explores the use of blockchain in the humanitarian world, detailing its advantages and potential risks. <\/p>\n","protected":false},"author":371,"featured_media":1503,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":"","_links_to":"","_links_to_target":""},"categories":[7],"tags":[],"class_list":["post-1495","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-digital-inclusion"],"_links":{"self":[{"href":"https:\/\/www.unhcr.org\/blogs\/wp-json\/wp\/v2\/posts\/1495","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.unhcr.org\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.unhcr.org\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.unhcr.org\/blogs\/wp-json\/wp\/v2\/users\/371"}],"replies":[{"embeddable":true,"href":"https:\/\/www.unhcr.org\/blogs\/wp-json\/wp\/v2\/comments?post=1495"}],"version-history":[{"count":7,"href":"https:\/\/www.unhcr.org\/blogs\/wp-json\/wp\/v2\/posts\/1495\/revisions"}],"predecessor-version":[{"id":1542,"href":"https:\/\/www.unhcr.org\/blogs\/wp-json\/wp\/v2\/posts\/1495\/revisions\/1542"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.unhcr.org\/blogs\/wp-json\/wp\/v2\/media\/1503"}],"wp:attachment":[{"href":"https:\/\/www.unhcr.org\/blogs\/wp-json\/wp\/v2\/media?parent=1495"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.unhcr.org\/blogs\/wp-json\/wp\/v2\/categories?post=1495"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.unhcr.org\/blogs\/wp-json\/wp\/v2\/tags?post=1495"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}