Blockchain
What is Blockchain?
A blockchain is a distributed database existing on multiple computers at the same time, with a detailed and un-changeable transaction history leveraging cryptography. Blockchain-based technologies, perhaps most famous for their use in “cryptocurrencies ” such as Bitcoin, are also referred to as “distributed ledger technology (DLT).”
How does Blockchain work?

Blockchain is a constantly growing database as new sets of recordings, or ‘blocks,’ are added to it. Each block contains a timestamp and a link to the previous block, so they form a chain. The resulting blockchain is not managed by any particular body; instead, everyone in the network has access to the whole database. Old blocks are preserved forever, and new blocks are added to the ledger irreversibly, making it impossible to erase or manipulate the database records.
Blockchain can provide solutions for very specific problems. The most clear-cut use case is for public, shared data where all changes or additions need to be clearly tracked, and where no data will ever need to be redacted. Different uses require different inputs (computing power, bandwidth, centralized management), which need to be carefully considered based on each context. Blockchain is also an over-hyped concept applied to a range of different problems where it may not be the most appropriate technology, or even in some cases, a responsible technology to use.
There are two core concepts around Blockchain technology: the transaction history aspect and the distributed aspect. They are technically tightly interwoven, but it is worth considering them and understanding them independently as well.
'Immutable' Transaction HistoryImagine stacking blocks. With increasing effort, one can continue adding more blocks to the tower, but once a block is in the stack, it cannot be removed without fundamentally and very visibly altering—and in some cases destroying—the tower of blocks. A blockchain is similar in that each “block” contains some amount of information—information that may be used, for example, to track currency transactions and store actual data. (You can explore the bitcoin Blockchain, which itself has already been used to transmit messages and more, to learn about a real life example.).
This is a core aspect of the blockchain technology, generally called immutability, meaning data, once sored, cannot be altered. In rare cases, a 100% consensus among users can permit changes although it is incredibly tedious.
Blockchain is at its simplest, a valuable digital tool that replicates online the value of a paper-and-ink logbook. While this can be valuable to track a variety of sequential transactions or events (ownership of a specific item / parcel of land / supply chain) and could even be theoretically applied to concepts like voting or community ownership and management of resources, it comes with an important caveat. Mistakes can never be truly unmade, and changes to data tracked in a blockchain can never be updated.
Many of the potential applications of blockchain would naturally want one of the pieces of data tracked to be the identity of a person or legal organization. If that entity changes, their previous identity will be forever, immutably tracked and linked to the new identity. On top of being damaging to a person fleeing persecution or legally changing their identity, in case of transgender individuals, for example, this is also a violation of the right to privacy established under international human rights law.
The second core tenet of blockchain technology is the absence of a central authority or oracle of “truth.” By nature of the unchangeable transaction records, every stakeholder contributing to a blockchain tracks and verifies the data it contains. At scale, this provides powerful protection against problems common not only to NGOs but to the private sector and other fields that are reliant on one service to maintain a consistent data store. This feature can protect a central system from collapsing or being censored, corrupted, lost, or hacked — but at the risk of placing significant hurdles in the development of the protocol and requirements for those interacting with the data.
A common misconception is that blockchain is completely open and transparent. Blockchains may be private, with various forms of permissions applied. In such cases, some users have more control over the data and transactions than others. Privacy settings for blockchain can make for easier management, but also replicate some of the specific challenges that blockchains, in theory, are solving.
How is blockchain relevant in civic space and for democracy?
Blockchain technology has the potential to provide substantial benefits in the development sector broadly, as well as specifically for human rights programs. By providing a decentralized, verifiable source of data, blockchain technology can be a more transparent, efficient form of information and data management for improved governance, accountability, financial transparency, and even digital identities. While blockchain can be effective when used strategically on specific problems, practitioners who choose to use it must do so fastidiously. The decisions to use DLTs should be based on a detailed analysis and research on comparable technologies, including non-DLT options. . The decisions to use DLTs should be based on a detailed analysis and research on comparable technologies, including non-DLT options.
By providing a decentralized, verifiable source of data, blockchain technology can enable a more transparent, efficient form of information and data management. Practitioners should understand that blockchain technology can be applied to humanitarian challenges, but it is not a separate humanitarian innovation in itself.
Blockchain for the Humanitarian Sector – Future Opportunities
Blockchains lend themselves to some interesting tools being used by companies, governments, and civil society. Examples of how blockchain technology may be used in civic space include: land titles, digital IDs (especially for displaced persons), health records, voucher-based cash transfers, supply chain, censorship resistant publications and applications, digital currency , decentralized data management , crowdfunding and smart contracts. Some of these examples are discussed below. Specific examples of the use of blockchain technology may be found below under case studies.

Blockchain technology has the potential to provide substantial benefits in the humanitarian sector, such as protected data sharing, supply chain, donor financing, cash programmes and crowdfunding. By providing a decentralized, verifiable source of data, blockchain technology can enable a more transparent, efficient form of information and data management. Practitioners should understand that blockchain technology can be applied to humanitarian challenges, but it is not a separate humanitarian innovation in itself.
Blockchain for the Humanitarian Sector – Future Opportunities
Blockchain’s core tenets – an immutable transaction history and its distributed and decentralize nature – lend themselves to some interesting tools being used by companies, governments, and civil society. These will be explored more fully in the Case Studies section, below; but at a high level, many actors are looking at leveraging blockchain in the following ways:
Smart ContractsSmart contracts are agreements that provide automatic payments on the completion of a specific task or event. For example, in civic space, smart contracts could be used to execute agreements between NGOs and local governments to expedite transactions, lower costs, and reduce mutual suspicions. However, since these contracts are “defined” in code, any software bugs become potential loopholes in which the contract could be exploited. Once case of this happened when an attacker exploited a software bug in a smart contract-based firm called The DAO for approximately $50M.
The decentralized, immutable nature of blockchain provides clear benefits to protecting speech, but not without significant risks. There have been high-visibility uses of blockchain to publish censored speech in China, Turkey, and Catalonia. Article 19 has written an in-depth report specifically on the interplay between freedom of expression and blockchain technologies, which provides a balanced view of the potential benefits and risks, and guidance for stakeholders considering engaging in this facet.
Ethereum is a cryptocurrency focused on using the blockchain system to help manage decentralized computation and storage through smart contracts and digital payments. Ethereum encourages the development of “distributed apps” which are tied to transactions on the Ethereum Blockchain. Examples include automated auctions, voting, a Twitter-like tool, and apps that pay for content creation/sharing. See case studies in the cryptocurrencies primer for more detail.
The vast majority of these solutions presume some form of micro-payment as part of the transaction. This transfer formalizes and records the action in the blockchain, but the design element has obvious challenges for equal access.
Opportunities
Blockchain can have positive impacts when used to further democracy, human rights and governance issues. Read below to learn how to more effectively and safely think about blockchain in your work.
Proof of Digital IntegrityData stored or tracked using blockchain technologies have a clear, sequential, and unalterable chain of verifications. Once data is added to the blockchain, there is ongoing mathematical proof that it has not been altered. This does not provide any assurance that the original data is valid or true, and it means that any data added cannot be deleted or changed – only appended to. Working in civil society, this benefit has been applied to concepts such as creating records for land titles/ownership; to improve voting, to ensure one person matches with one unchangeable vote; or to prevent fraud and corruption and enhance transparency in international philanthropy. It has been used for digital identities to help people retain ownership over their identity and documents, and in humanitarian contexts to make voucher-based cash transfers more efficient. As an enabler for digital currency, blockchain increases the sources of philanthropic wealth and, in some circumstances, facilitates cross-border funding of civil society.
A function such as this can provide a solution to the legal invisibility most often borne by refugees and migrants. Rohingya refugees in Bangladesh, for example, are often at risk of discrimination and exploitation, because they are stateless. Proponents of blockchain argue that its distributed system can grant individuals with “self-sovereign identity,” a process through which they create and register their identity themselves and can therefore control and share that information. However, if blockchain architects do not secure transaction permissions and public/private state variables, governments could use machine-learning algorithms to monitor public blockchain activity and gain insight into whatever daily, lower- level activity of their citizens are linkable to their blockchain identities. This might include interpersonal and business payments, timing, and any other locations or businesses where citizens need to “show their ID” for services, be they health, financial, or other. Furthermore, such a use of blockchain assumes that individuals would be prepared and able to adopt that technology, an unlikely possibility due to the financial insecurity many vulnerable groups, such as refugees, face.
The importance of legal identity has been recognised by international bodies. “Legal invisibility” is a major problem for various groups, placing them at risk of discrimination and exploitation, such as migrants often given fake ID documents for transport across borders, or people without proof of identity. Some argue that the decentralised nature of blockchain can provide a remedy to this by granting individuals with “self-sovereign identity” where they are the ones to create and register identity and the only ones to control what to do with it and with whom to share it” […] If blockchain architects aren’t careful in the way they align transaction permissions and public/private state variables, governments could use state-sponsored machine learning algorithms to monitor public blockchain activity and gain insight into the lower level activity of their citizens
Blockchain is resistant to traditional problems of one central authority or data store being attacked or experiencing outages. In a blockchain, data are constantly being shared and verified across all members—although a blockchain requires large amounts of energy, storage and bandwidth to maintain a shared data store. This decentralization is most valued in digital currencies, which rely on the scale of their blockchain to balance not having a country or region “owning” and regulating the printing of the currency. Blockchain has also been explored to distribute data and coordinate resources without a reliance on a central authority and simultaneously being resistant to censorship.
Blockchain and freedom of expression
Risks
The use of emerging technologies can also create risks in civil society programming. Read below on how to discern the possible dangers associated with blockchain in DRG work, as well as how to mitigate for unintended – and intended – consequences.
Unequal AccessBlockchain presents multiple barriers to engaging with it. Connectivity, reliable and robust bandwidth and local storage are all needed. Therefore, mobile phones are often an insufficient device to host or download blockchains. The infrastructure it requires can serve as a barrier to access in areas where Internet connectivity primarily occurs via mobile devices. Because every full node (host of a blockchain) stores a copy of the entire transaction log, blockchains only grow longer and larger with time, and thus can be extremely resource-intensive to download on a mobile device. For instance, over the span of a few years, the blockchains underlying Bitcoin grew from several gigabytes to several hundred. While the use of blockchain offline is possible, offline components are among the most vulnerable to cyberattacks, and this could put the entire system at risk.
Blockchains — whether they are fully independent are part of existing blockchains — require some percentage of actors to lend processing power to the blockchain, which — especially as they scale — itself becomes either exclusionary or creates classes of privileged users.
Another problem that can undermine the intended benefits of the system is the unequal access to possibilities to convert blockchain-based currencies to traditional currency, for example in relation to philanthropy or to support civil society organizations in restrictive regulatory environments, as for cryptocurrencies to have actual value, someone has to be willing to pay money for it.
Beyond these technical challenges, blockchain technology requires a strong baseline understanding of technology and its use in situations where digital literacy itself is a challenge.
There are paths around some of these problems, but any blockchain use needs to reflect on what potential inequalities could be exacerbated by or with this technology.
Further, these technologies are inherently complex, and outside the atypical case where individuals do possess the technical sophistication and means to install blockchain software and set up nodes; the question remains as to how the majority of individuals can effectively access them. This is especially true of individuals who may have added difficulty interfacing with technologies due to disability, literacy or age. Ill-equipped users are at increased risk of their investments or information being exposed to hacking and theft.
Storing sensitive information on a blockchain – such a biometrics or gender – combined with the immutable aspects of the system, can lead to considerable risks for individuals when this information is accessed by others with the intention to harm. Even when specific personally identifiable information is not stored on a blockchain, pseudonymous accounts are difficult to protect from being mapped to real-world identities, especially if they are connected with financial transactions, services, and/or actual identities. This can erode rights to privacy and protection of personal data, as well as exacerbate the vulnerability of already marginalized populations and persons who change fundamental aspects of their person (gender, name). Explicit consent, modification and deletion of one’s own data are often protected through data protection and privacy legislation, such as the General Data Protection Regulation in the EU that serves as example for many other laws around the world. An overview of legislation in this area around the world is kept up to date by the United Nations Conference on Trade and Development.
For example, in September 2017, concerns surfaced about the Bangladeshi government’s plans to create a ‘merged ID’ that would combine citizens’ biometric, financial and communications data (Rahman, 2017). At that time, some local organizations had started exploring a DLT solution to identify and serve the needs of local Rohingya asylum-seekers and refugees. Because aid agencies are required to comply with national laws, any data recorded on a DLT platform could be subject to automatic data-sharing with government authorities. If these sets of records were to be combined, they would create an indelible, uneditable, untamperable set of records of highly vulnerable Rohingya asylum-seekers, ready for cross-referencing with other datasets. “As development and humanitarian donors and agencies rush to adopt new technologies that facilitate surveillance, they may be creating and supporting systems that pose serious threats to individuals’ human rights.”
These issues raise questions about meaningful, informed consent – how and to what extent do aid recipients understand DLTs and their implications when they receive assistance? […] Most experts agree that data protection needs to be considered not only in the realm of privacy, empowerment and dignity, but also in terms of potential physical impact or harm (ICRC and Brussels Privacy Hub, 2017; ICRC, 2018a)
Blockchain and distributed ledger technologies in the humanitarian sector
As blockchains scale, they require increasing amounts of computational power to stay in sync. In most digital currency blockchains, this scale problem is balanced by rewarding people who contribute to the processing power required with currency. The University of Cambridge estimated in fall 2019 that Bitcoin alone currently uses .28% of global electricity consumption, which, if Bitcoin were a country, would place it as the 41st most energy-consuming country, just ahead of Switzerland. Further, the negative impact is demonstrated by research showing that each Bitcoin transaction takes as much energy as needed to run a well-appointed house and all the appliances in it for an entire week.
As is often the case for emerging technology, the regulations surrounding blockchain are either ambiguous or nonexistent. In some cases, such as when it can publish censored speech, regulators overcorrect and block access to the entire system or remove pseudonymous protections of the system in country. In Western democracies, there are evolving financial regulations as well as concerns around the immutable nature of the records stored in a blockchain. Personally-Identifiable Information (see Privacy, above) in a blockchain cannot be removed or changed as required by the European Union’s General Data Protection Regulation (GDPR) and widely illegal content has already been inserted into the bitcoin blockchain.
While a blockchain has no “central database” which could be hacked, it also has no central authority to adjudicate or resolve problems. A lost or compromised password is almost guaranteed to result in the loss of ability to access funds or worse, digital identities. Compromised passwords or illegitimate use of the blockchain can harm individuals involved, especially when personal information is accessed or when child sexual abuse images are stored forever. Building mechanisms to address this problem undermines other key features of the blockchain.
That said, an enormous amount of trust is inherently placed in the software-development process around blockchain technologies, especially those using smart contracts. Any flaw in the software, and any intentional “back door”, could enable an attack that undermines or subverts the entire goal of the project.
Where is trust being placed: whether it is in the coders, the developers, those who design and govern mobile devices or apps; and whether trust is in fact being shifted from social institutions to private actors. All stakeholders should consider what implications does this have and how are these actors accountable to human rights standards
Questions
If you are trying to understand the implications of blockchain in your work environment, or are considering using aspects of blockchain as part of your DRG programming, ask yourself these questions:
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Does blockchain provide specific, needed features that existing solutions with proven track records and sustainability do not?
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Do you really need blockchain, or would a database be sufficient?
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How will this respect data privacy and control laws such as the GDPR?
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Do your intended beneficiaries have the internet bandwidth needed to use the product you are developing with blockchain?
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What external actors/partners will control critical aspects of the tool or infrastructure this project will rely on?
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What external actors/partners will have access to the data this project creates? What access conditions, limits, or ownership will they have?
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What level of transparency and trust do you have with these actors/partners?
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How you are you conducting and measuring informed consent processes for any data gathered?
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How will this project mitigate technical, financial, and/or infrastructural inequalities and ensure they are not exacerbated?
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Will the use of blockchain in your project comply with data protection and privacy laws?
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Do other existing laws and policies address the risks and offer mitigating measures related to the use of blockchain, such as anti-money-laundering regulation?
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Do existing laws enable the benefits you have identified for the blockchain-enabled project?
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Are these laws aligned with international human rights law such as the right to privacy, to freedom of expression and opinion and to enjoy the benefits of scientific progress?
Case Studies
Blockchain in the humanitarian sectorThe 2019 report “Blockchain and distributed ledger technologies in the humanitarian sector” provides multiple examples of humanitarian use of DLTs, including for financial inclusion, land titling, donation transparency, fraud reduction, cross-border transfers, cash programming, grant management and organizational governance, among others.
- The World Food Programme’s Building Blocks project uses blockchain technology (Ethereum, four nodes and one controlling entity) to make its voucher-based cash transfers more efficient, transparent and secure, and to improve collaboration across the humanitarian system.
- The Start Network and its member organisations Dorcas Aid International and Trócaire partnered with Disberse, a for-profit financial institution for the aid sector, on pilot programmes using DLT (Ethereum-based, two and three nodes and one controlling entity) to increase the humanitarian community’s comfort with the technology.
- Helperbit uses the Bitcoin public network to create a decentralised, parametric peer-to-peer insurance service and donation system (multi-signature e-wallet) to change practices of humanitarian assistance both before and after an emergency.
- Sikka, a digital-assets transfer platform (Ethereum, one node and one controlling entity), was created by World Vision International Nepal Innovation Lab to address the challenge of financial access during times of crises for financially marginalised and in-need communities.
- The IFRC and Kenya Red Cross implemented the Blockchain Open Loop Payments Pilot Project (Multichain, four nodes with three controlling entities), through Red Rose, to explore how blockchain could increase the transparency and accountability of cash transfer programmes, including in relation to self-sovereign digital identities.”
References
Find below the works cited in this resource.
- Adinolfi, Shailee, Burg, Jon & Tara Vassefi. (2019). Blockchain: Can we talk about impact yet? Medium.
- Article 19. (2019). Blockchain and Freedom of Expression.
- Bacchi, Umberto. (2018). Scan on exit: can blockchain save Moldova’s children from traffickers? Reuters.
- BBC News. (2019). Child abuse images hidden in crypto-currency blockchain.
- Bromwich, Jonah Engel. (2018). Alas, the Blockchain won’t save journalism after all. The New York Times.
- Coppi, Giulio & Larissa Fast. (2019). Blockchain and Distributed Ledger Technologies in the Humanitarian Sector. ODI.
- Dichter, Thomas. (2019). Blockchain for social impact? Be careful what you wish for. Forbes.
- Finley, Klint. (2016). A $50 million hack just showed that the DAO was all too human. Wired.
- Hosein, Gus & Carly Nyst. (2013). Aiding Surveillance. Privacy International.
- Juskalian, Russ. (2018). Inside the Jordan refugee camp that runs on Blockchain. MIT Technology Review.
- Lehr, David & Paul Lamb. (2018). Digital Currencies and Blockchain in the Social Sector. Stanford Social Innovation Review.
- McCarthy, Niall. (2019). Bitcoin devours more electricity than Switzerland. Forbes.
- UN OCHA. (2018). Blockchain for the Humanitarian Sector – Future Opportunities.
Additional Resources
- Blockchains and Cryptocurrencies: Burn It with Fire: a well-informed, critical look at blockchain technologies through a lecture and summary by Nicholas Weaver, Ph.D.
- Burg, John, Murphy, Christine & Jean Paul Pétraud. (2018). Blockchain for International Development: Using a Learning Agenda to Address Knowledge Gaps. MERL Tech DC 2018: a review of 43 blockchain projects in international development.
- Burg, John. (2018). Blockchain will impact your life…here’s how and what you can do about it. Medium: provides an optimistic path and some current case studies for future blockchain developments.
- Coinbase: an online digital currency wallet and trading platform offers educational material and a portal to learn and earn different emerging currencies.
- Digiconomist Sustainability Charts: provides updated charts on digital currencies, focusing on sustainability and environmental impacts.
- Finck, Michèle. (2019). Blockchain and the General Data Protection Regulation: Can distributed ledgers be squared with European data protection law? European Parliamentary Research Service.
- Nelson, Paul. (2018). Primer on Blockchain: How to assess the relevance of distributed ledger technology to international development. USAID.
- Popper, Nathaniel. (2018). What is the Blockchain? Explaining the tech behind cryptocurrencies. The New York Times.
- Rauchs, Michel et al. (2018). Distributed Ledger Technology Systems: A Conceptual Framework. University of Cambridge Judge Business School.
- The International Bill of Human Rights (consisting of the Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights): should be reflected in laws and policy regulating blockchain-based technology.
- Tillemann, Tomicah et al. (2020). Virtual Currency Donations: Navigating Philanthropy’s New Frontier. Blockchain Trust Accelerator and International Center for Not-for-Profit Law.
- USAID. (2020). Digital Strategy 2020-2024.
- Vessels Tech GoodBlocks: Browse Blockchain for Social Good Projects from the Master List.
- Wilson, Steve. (2017). How it works: Blockchain explained in 500 words. ZDNet: a short overview of the technology, focused on digital currencies.
- Yaga, Dylan J. (2018). NIST Blockchain Technology Overview. NIST: a balanced overview of blockchain technology, including a decision-making flowchart.