Four Lessons Learned Launching Blockchain Financial Services for NGOs

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Much has been written about blockchain technology, but much of it is impenetrable to outsiders. Aid organisations are therefore dependent on the honesty and clarity of specialists – usually private companies like ours, with a product to sell to those organisations – in order to make judgments about the utility (or otherwise) of blockchain.
Unfortunately there’s too much hype around blockchain in general, and definitely too much hype around blockchain for aid.
It always takes longer for projects to come to fruition than you hope, ours included – yet the technology press announces initiatives as if they’ve already achieved exactly what they claimed in their press release. Seeing through this smoke and mirrors is critical, and the best tool for this is transparency.
Transparency is what makes it possible for all of us to learn, and it’s critical for meeting the ethical challenges that face the aid industry as it applies new technologies.
I’m the COO of Disberse, which is currently testing the alpha version of a blockchain-based fund distribution platform in a series of small-scale pilots with NGO partners. We decided early on that we wanted to be as transparent as possible, both with potential clients and with the wider sector; so, we thought we’d start by identifying some lessons we’ve learned in our first 18 months.
1. Blockchain is not a swiss army knife
If somebody claims their blockchain solution can do it all – digital identity, peer-to-peer donations, cash transfers, impact monitoring, health records – you should probably press them on the details, especially if they don’t appear to have much experience with any of those things.
You need to target a specific problem – in our case, our long experience in the aid sector showed us the challenges involved in distributing funds to where they’re needed, as described in the Grand Bargain – and you need to explain clearly how and why blockchain could be part of a solution.
2. Translate technical terms to business processes
Discussions about public, private, and permissioned blockchains, or about proofs of work, stake, and authority – these are all pretty incomprehensible to most people. They’re important technical points, but it’s essential to translate them into business processes; fundamentally aid organisations want to know what blockchain can do, not how it works.
For Disberse, blockchain improves two aspects of financial processes: transparency (which is essential for accountability) and decentralisation (which is essential for localisation).
3. Be honest about your capability – and your ambition
We are only the beginning of a much longer change process for the sector. During our pilot phase, we don’t leverage the distributed capability of blockchain since we’re still using the Ethereum testnet. While this is disappointing for blockchain purists, we believe we have a good rationale.
This is a new technology with transformative potential – but we still need to show that it works, that it’s reliable, and that as a company we’re responsible regarding the risks involved. Due diligence – on both the non-profit and for-profit sides – is critical.
4. There is no progress without experimentation
Could a centralised solution do the job as well as blockchain? At the moment, probably. But this isn’t just about the present moment, it’s about building for the future; in our case, a distributed financial infrastructure maintained by a regulated financial institution.
We don’t know exactly what that will look like, because as far as we know nobody has ever built it before. It might not work, but that brings us to the assumption that we started the company with: you’ll never know if your idea will work unless you test it in the real world.
By Paul Currion, Founder & COO, Disberse
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