OXFORD, England (Thomson Reuters Foundation) - Two thirds of companies and organizations using blockchain to drive social impact say the technology is an improvement over other methods used to solve some of the world’s most pressing challenges, a report published on Thursday showed.
The report by Stanford University’s Center for Social Innovation and non-profit foundation RippleWorks analyzed 193 social impact organizations that are using blockchain, the technology behind digital currencies such as Bitcoin.
The use of blockchain has grown steadily since 2013, with the health sector being the most avid user, followed by financial inclusion initiatives, those working in philanthropy and aid, and democracy and governance, according to the report.
The report identified four potential benefits of blockchain for social impact: transparency, lower transaction costs, creating digital identities for those without formal documents, and difficulties tampering with data entered in a blockchain.
“It is still early days but what is emerging is that blockchain brings solutions that previously would not have been possible,” said Doug Galen, co-founder and chief executive of RippleWorks, which pairs emerging market entrepreneurs with top technology experts as voluntary advisors.
Blockchains are ledgers of digital transactions maintained by a network of computers without a centralized authority.
At 25 percent, the health sector was the most avid user of blockchain technology, followed by financial inclusion, philanthropy and aid, and democracy and governance.
The technology was most frequently used for verifying records and facilitating payments, with around a quarter of those surveyed saying they used blockchain for those purposes.
Blockchain’s most popular benefits were risk and fraud reduction, followed by increasing efficiency, the report said.
In the foreign aid sector, where billions of dollars are lost every year due to corruption, blockchain can help improve transparency, said Galen.
“It enables a donation to be traced through every step, from donor to recipient, and record every action and intermediary along the way,” he told the Thomson Reuters Foundation on the sidelines of the 2018 Skoll World Forum for social entrepreneurship.
For organizations dealing frequently with cross-border money transfers, especially where multiple intermediaries are involved, blockchain can significantly reduce inefficiencies and save costs, the report said.
Reporting by Astrid Zweynert @azweynert, Editing by Belinda Goldsmith; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit http://news.trust.org and http://http://thisisplace.org