By Val Elefante
On November 1, Jason Shim presented Blockchain Basics for Nonprofits: Preparing for the Future, where he explained the fundamentals of blockchains and how nonprofits can use blockchain-enabled technology for fundraising.
He opened his presentation with an observation — that the evolution of technology has always coincided with the evolution of philanthropy — which comes from his many years of experience helping nonprofits stay ahead of the technology curve. For example, in 2013, he led Pathways to Education Canada to become the first charity to issue tax receipts for bitcoin donations. Now, Jason serves as an editor at Ledger, a peer-reviewed scholarly journal at the University of Pittsburgh that publishes full-length original research articles on the subjects of cryptocurrency and blockchain technology.
Jason described a blockchain as being similar to a notebook where information is recorded, where it’s easy to tell if changes have been made once data is entered. Except in this case, everyone who is part of the network has the record, and transparency, security, and consensus are automatically embedded in the technology. These qualities make blockchains useful for recording financial transactions, tracking supply chain information, and managing encrypted identity systems.
Jason referenced the Bitcoin Whitepaper, which explains how the peer-to-peer electronic cash system enables bitcoin to be sent to anyone in the world with an internet connection but is not owned by any government or corporation. After bitcoin, Ethereum built upon this system with its own protocol, which enables programs called smart contracts to be stored on the blockchain to run when predetermined conditions are met.
Many people are skeptical of blockchain technology because of news coverage about various scams and hacks reported in the ecosystem. However, Jason clarified that the scams are not examples of the blockchain itself being hacked. Rather, they are a result of lapses in other areas of security such as recycled passwords, hacks of exchanges, or malicious smart contract code. The blockchain itself is extremely secure.
Finally, Jason detailed a few different use cases of blockchain in supporting nonprofit initiatives including fundraising. For example, he mentioned a project called Merry Merkle, which is a decentralized giving project enabled by the Ethereum blockchain in which every crypto donation results in a Christmas tree being lit. Another project Jason mentions is called Smileycoin, which is a platform incentivizing students to study with tokens.
Other blockchain-enabled tools that might be useful to nonprofits include smart contract trusts, POAPs (proof of attendance protocols), and oracles, which have been used by the Associated Press to validate information, including election results.
Watch the full playback of Jason’s presentation on YouTube and connect with him via LinkedIn if you have any questions.