It’s been almost a decade since the advent of the bitcoin ledger. There’s no doubt that the technology behind cryptocurrency has made it to the top. And yet, what has it changed in the lives of ordinary people? You could think that such technological advancement would spawn dozens of useful, life-changing applications. Well… has it? I’m a little skeptical. I’d like to review what blockchain can do for people. Let’s talk blockchain charity.
Problematic ICOs
Scrolling through the list of promising ICOs, I can’t resist the thought that the entire blockchain development community has been a bit self-centered. Of course, there’s been a tremendous advance in what the ledger allows us to do. All the technologies surrounding blockchain can do amazing things — in theory. However, I don’t see many things ordinary people could benefit from. There’ve also been at least a couple of ICO-based scams. People losing their life savings don’t contribute to the vision of a life-changing technology. The fact that many governments appear hesitant to embrace this technology doesn’t help either.
Where’s the real impact?
However, cryptocurrency still stirs the idealists in all of us. The transparency and transaction safety provided by a distributed, public ledger is still unmatched. So why haven’t we felt the impact of all of this on our daily lives? Perhaps that’s about to change.
Charities, meet the blockchain
One type of endeavor which in particular requires transparency and trustworthiness is charitable donations. Nowadays, we have plenty of different charity organizations worldwide. The presence of new technologies allows us to help people on the other side of the globe. Yet, all of this is based solely on a charity organization’s reputation. Ordinary donors have literally no way of tracking donations. How can you check if a charity is spending your money right? Here comes the power of blockchain!
Giftcoin — tracking donations
The founders of Giftcoin noticed this particular problem with tracking donations. Alex, one of Giftcoin’s founders, has the numbers to back this up.
“The issue of trust and transparency in the charitable sector is one of the biggest challenges the sector faces. Our survey of 2,000 people in the UK found that people would give an average of 49% more money to good causes if they could see how that money was being spent.”
So, they came up with a special idea. Why not use a blockchain to secure and guarantee each and every charity transaction while removing the need for any intermediaries? A blockchain charity system would provide more transparency for tracking donations. It would also reduce the cost that has to be included in the case of traditional payments (cards or wire transfers). This brilliant blockchain charity concept required a lot of skills and experience to be brought to life. This is how the collaboration between Espeo Blockchain and Giftcoin came about.
The tech behind a blockchain charity project
The challenge ahead of our team meant we had to employ battle-proven technologies. The ICO token and smart contracts were based on Ethereum. As you probably know, it’s the leading platform for decentralized applications. Why? We compared it to Hyperledger previously. For a deep dive, check out our article. We coded the smart contracts (key to Giftcoin core functionalities) in Solidity. Also, in order to assure maximum code security and clarity, we used the Truffle Framework for contracts.
We also had to include extensive test coverage on each stage of development. All those elements meant that nothing could surprise us from the technical side of the project. Also, due to Giftcoin’s requirements for transparency and safety we had special KYC (know your customer) procedures implemented. That included full integration with the project’s landing page and a KYC provider’s API.
As Alex put it himself:
“the team at Espeo have brought elegant technical solutions to a number of challenges and their execution of these ideas has been excellent. It has been a pleasure to work with them”.
KYC
So, how will all these technicalities translate into charity reinvented? First of all, the extensive KYC process means that people involved in charity transactions via Giftcoin will be well-verified at all times. This facilitates not only compliance with local regulations, but it also lets everyone avoid any shady transactions. Naturally, these could seriously undermine a blockchain charity project’s reputation.
Secondly, due to the logic behind blockchain, each and every transaction is written permanently and in a way that doesn’t allow any tampering with its details. Also, a publicly available ledger is one way to exercise transparency with tracking donations. Each side involved can verify what the others are doing. Blockchain traceability is one of the platform’s greatest assets.
Transparency is the key to this project. Every charity project established on the platform will allow its creators to define specific milestones. This encourages people behind the project accountable for its spending.
Sounds complicated? Not necessarily.
So how does this work?
Just image a project which has 6 milestones to achieve its final goal. Initially, the money collected can only finance the very first goal. After this has been achieved, an independent judicator verifies if the project creators’ spending has been justified and that the goal at hand has been truly achieved. Only after positive verification can the means for the next milestone be transferred to projects creators. We have smart contracts to thank for this magic! Also, it’s worth mentioning that you can use this routine after each milestone. Such execution of project milestones and smart contracts will boost the credibility of every project carried on Giftcoin.
Further benefits
Moreover, the benefits of the solution implemented for Giftcoin go beyond transaction security and tracking donations. Existing charity actions need to rely on payment operators and banks to carry all the transactions for them. Unfortunately, this fact means that those third parties (also called intermediaries) can cost the cause a few percents of the means paid. We can practically eliminate the fee for the intermediaries’ operations with Giftcoin. Here, the smart contract implemented can take care of securing all the transactions carried out inside the platform.
Giftcoin, although it is still at its early stage, looks very promising. It’s a display of how blockchain technology’s power, a great use case – but also as a potential revolution in terms of crowdfunded charity projects. Finally, I feel compelled to mention that the Giftcoin project isn’t restricted only to the blockchain charity transaction platform. Its creators also want to develop a Blockchain-compatible mobile app that would allow you to collect money for charity simply by rounding up your everyday spending.
I’m really excited about this blockchain charity project and I think I might be reviewing my harsh statements about the blockchain ecosystem. Do you have any other examples that can change my mind? Let us know in the comments.
Check out Giftcoin’s interview for the BBC: