Records on the blockchain cannot be erased, so when used for donations, blockchain technology provides traceable accountability showing the exact use of the donations in the ecosystem. The tamper resistant system has a clear use in the nonprofit sector, as when someone makes a donation through the blockchain, they can track the donation from the initial deposit of the funds to their final destination – says Francesco Nazari Fusetti, CEO and Founder in CharityStars and AidCoin, in Bithub.pl’s #SundayInterview.
Is the charity sector suffering from flaws and imperfections that can be solved with blockchain technology? What are they?
Francesco Nazari Fusetti: Many countries around the world have seen trust in the charity sector decline as a result of the misuse and misappropriation of donor funds. This has led to increased scepticism and a reluctance to donate to charitable causes.
According to Essential Research, 35 percent of US citizens have little or no trust in charitable institutions. Similarly, in the UK, the Charity Commission for the UK and Wales commissioned research revealing that trust and confidence in charities is at its lowest level since the recording of sentiment began in 2005, declining from 67 percent to 57 percent. This is a result of a plethora of reasons which include poor fundraising practices, inappropriate data sharing, and the high-profile collapse of a number of charities, all providing significant culminating factors in the decline of trust in the charity sector. As a result of this prevailing trend across the globe, the sector can greatly benefit from the introduction of blockchain technology
By using blockchain technology to track donations, cryptocurrencies to transfer funds, and smart contracts to ensure donations are spent correctly, blockchain technology has the ability to transform the sector by providing increased transparency and traceability of donor funds.
Some people donating to noble causes would probably like to be sure that their money is handled according to their noble intentions. Public ledger might be of help in this regard?
FNF: Distributed Ledger Technology (DLT), or blockchain technology, provides a public ledger which is immutable and allows for full transparency. Records on the blockchain cannot be erased, so when used for donations, blockchain technology provides traceable accountability showing the exact use of the donations in the ecosystem. The tamper resistant system has a clear use in the nonprofit sector, as when someone makes a donation through the blockchain, they can track the donation from the initial deposit of the funds to their final destination.
How does AidCoin work? Normally people who want to donate do it with cash or money transfers. How can they do it with your token? How about other cryptocurrencies – will they be accepted as well?
FNF: AidCoin is the token that aims to become the preferred method to donate transparently through the Ethereum blockchain and provides access to the ecosystem of services provided by the AIDChain platform. The adoption of cryptocurrencies will impact the way we donate in the future, and AidCoin is poised to play a leading role in this new era of fundraising.
AIDChain will allow donors to convert major cryptocurrencies into AidCoin at the current exchange rate, while the built-in wallet will allow every registered user to easily manage and store AidCoin tokens without the use of external services. Donors will be able to convert major cryptocurrencies such as Bitcoin, Ether, Litecoin, Dash, and ERC20 tokens into AidCoin with the aim of adding an increasing number of cryptocurrencies and fiat currencies in the future. Through AIDChain, donors and charities will also be able to connect with all the actors involved in the nonprofit community, access an explorer to track donations transparently, leverage templates of smart contracts to run fundraising campaigns, and more.
You’ve been doing well with finding partners among non-govs but how are you going to get through to donors? People think of coins rather in terms of speculative gain than any kind of usability or charity. Or maybe you leave 'marketing’ to your partners?
FNF: Cryptocurrencies are becoming increasingly popular across the world, and many cryptocurrencies are focusing their efforts on becoming more user-friendly and suitable for payments. We are at the inception of the advances blockchain technology and cryptocurrencies will bring to the charity sector.
At present, people do not generally think of cryptocurrencies when they are donating, however once donors begin to see and learn about the benefits of tracking donations and the assurance it provides, we believe people will be increasingly incentivised to donate this way.
In order to embrace and utilize coins, crypto and blockchain technology donors don’t need to have technical expertise or industry know-how. When you think back to the beginning of the internet, it was a new uncharted technology that many were curious and perplexed about. Even fast-forwarded to the present day, despite its power, relevance, and importance, few of us understand the underlying mechanisms of the internet, yet we benefit from it immensely on a daily basis.
Blockchain technology is the enabler powering transparency through the public ledger, and the AidCoin token will provide a mean for donors to track donations. This may seem very technical and new now, but as the technology evolves and becomes increasingly mainstream in the charity sector, we will continue to grow our understanding of its capabilities and benefits without having to become experts in the space.
Are you planning to grow beyond the nonprofit sector and develop some commercial applications?
FNF: We are solely focused on the nonprofit sector. We have been providing innovative solutions here since 2013, and we believe the integration of blockchain technology and cryptocurrencies marks us as leaders within the sector.
As part of the suite of solutions we provide to increase transparency in the non-profit sector, we also are currently developing AIDPay. We will work with charitable organisations and non-profits, enabling them to separately integrate AIDPay to their platforms.
AIDPay is a payment gateway/embeddable widget that allows charities registered on the AidChain platform to accept donations in different cryptocurrencies directly on their website, which are then instantly converted into AidCoin. This allows charities to simply manage all donations received within a single wallet while providing transparency and traceability through AidCoin.
Interview by Przemyslaw Cwik