Using the blockchain to monitor Covid-19 donations

Despite the hype surrounding the blockchain it has largely remained a peripheral technology. Adoption has been slow, particularly in countries where a culture of accountability is still lacking. Such countries, the majority of which are in Africa, still favour opaque and antiquated systems that inevitably lead to continued pillaging national of resources.

So while reports of donated materials or funds being misappropriated might come as a shock to those donating, it is business as usual for those accustomed to such abuses. Sadly such reports will leave some donors unsure if sending more aid is still a good idea.

Nevertheless, proponents of the technology now believe the crisis caused by the Covid-19 potentially presents an opportunity to show the world why the blockchain can be a solution to this and many other problems.

The article below discusses just how effective the blockchain can be in addressing the problem of abuse of donated money and medical equipment.

Billionaires lead donations

As the Covid-19 pandemic spread has grabbed everyone’s attention, rich countries and individuals have responded by donating money and materials to stop its further spread.

Jack Dorsey has headlined the list of rich businesspeople that are pledging large donations to this cause. Dorsey plans to donate close to a third of his holdings, worth almost a billion dollars, to fight Covid-19. Earlier this year, another billionaire, Jack Ma made good on his promise by delivering an assortment of materials to each country on the African continent.

There is no doubt this has started a momentum whose only blemish so far are the disturbing reports of misappropriation or abuse of donations. Some officials in certain countries are reportedly reselling donated face masks on the black market while others are using materials to gain political mileage.

Such reports discourage others from donating thus potentially increasing the risk of a further spread of the virus on the continent. Africa currently has low infections when compared to Western countries and it is hoped that the distribution of donated ventilators and face masks will go a long way in ensuring they (infections) will stay that way.

Reports of misappropriation or abuse of donated materials have reignited interest in the use of technologies such as the blockchain ensuring donations reach the intended beneficiaries.

For his part, Jack Dorsey says the company he has created will track the expenditure of the donated money via this Google docs page. In the case of Ma’s donation, it is the blockchain that can potentially be useful but that is subject to certain conditions being met.

AfricaBlockchainMedia asked blockchain entrepreneur on his thoughts on this problem and what needs to be done to ensure the blockchain is successful in addressing the problem.

The entrepreneur, Victor Mapunga is the CEO and Co-Founder at FlexFinTx ,a tech company that has created an identity system known as self-sovereign digital identities that runs on the Aglorand blockchain.

Can the blockchain end this problem?

Mapunga agrees in principle with the assertion that technology, and in particular the blockchain, can provide an infrastructure that engenders a culture of transparency. Therefore having this technology might be necessary because it pre-empts cases of corrupt officials using their positions to misappropriate donations or charity funds.

However, it all boils to a society’s stance towards corruption or illicit gains. If a society is seen to generally condone such acts then this technology will not be enough to prevent the continued abuse of donated materials.

“What we are trying to address with technology is a cultural issue. The technology provides us with an infrastructure to move away from centralized way of decision making to a decentralized way where there is increased transparency and accountability,” explains Mapunga.

He argues that many societies in Africa have traditionally preferred centralized systems, where a few individuals are entrusted with the task of managing and allocating pooled resources. Such systems are prone to abuse but equally worrying are tendencies to condone such abuses. This is the cultural question that needs to be addressed.

It takes two to tango

In an effort to show why the blockchain alone is no panacea, Mapunga poses question; Do people really care if they are buying donated masks or not?  

“When people buy donated face masks on black market knowing very well that such items are not supposed to be on sale, it points to that cultural issue. So it (the effectiveness of the blockchain) boils down to a willingness by both the government and citizens to see this technology work. We know that the technology on its own cannot fix this.

According to the FlexFinTx CEO, the blockchain can only work if the ledger itself is filled with accurate data and is manned by persons of integrity. A blockchain that is full of false records is an ineffective tool for tracing and accounting for the distribution of donated medical equipment.

Nevertheless, Mapunga does point out that the blockchain is far more effective in monitoring and tracing the movement of donated funds.

Donating money via digital currencies instead of medical equipment could prove most effective because transactions on a decentralized blockchain are inherently transparent. There is greater accountability of how the funds have been disbursed. When combined with some of the latest innovative tools, the blockchain can be used to determine if the deserving individuals are actually receiving the donated funds.

As poor countries in Africa struggle to get testing materials as well as ventilators that are needed to fight the virus, it imperative that donor organizations not lose heart. Instead, they should explore the blockchain option when distributing funds because as Mapunga admits, it is easier to trace these than donated goods.

UN agencies such as UNICEF are moving in that direction already. UNICEF now accepts donations in Bitcoin and other forms cryptocurrencies in part because of the transparency associated with the underpinning technology, the blockchain.