ICTworks

Blockchain technology has been lauded as a solution to longstanding development issues, with proponents claiming it can bring unprecedented transparency, accountability, and efficiency.

However, as highlighted in Conjuring a Blockchain Pilot: Ignorance and Innovation in Humanitarian Aid, many blockchain pilots in international development are designed to attract donor funding, not deliver real, transformative outcomes for communities.

Blockchain’s Appeal to Donors

Donors are often captivated by blockchain’s promise of immutable, decentralized records, which theoretically ensure that aid is delivered efficiently and free from corruption. Blockchain appeals to their desire for control and transparency in development processes, offering a digital solution to track where every dollar goes. Yet, as the article points out, this narrative oversimplifies both the technology and the development process itself.

The author, Margie Cheesman, says:

“The Blockchain Pilot is ‘conjured’ as a product to be promoted to a marketplace of aid donors. ‘Conjurings’ are the spectacles and magical appearances that draw an audience of investors. Rather than just requiring knowledge and expertise, I argue that conjurings entail key forms of ignorance: (i) confusion, (ii) illusion, (iii) disappearance, and (iv) misdirection. The conjuring of the pilot is what justifies the adoption of blockchain, even though a simple database would have sufficed.”

She wrote about what she calls the “Blockchain Pilot” that uses blockchain, coupled with biometric iris recognition, to deliver essential financial aid to people living in refugee camps, replacing an analogue cash-in-hand system and reportedly reduced transaction fees by 90%. This pilot is still running, making her critique very relevant in 2024.

Disconnect Between Pilots and Realities

Pilots designed to impress donors are often out of touch with the realities of development work. Many digital development pilots require stable internet connectivity, reliable electricity, and a technically skilled workforce—requirements that are often absent in the areas these projects are intended to serve.

For example, the Blockchain Pilot temporarily invested in internet access and technical expertise and focused on narrow, donor-friendly metrics of success, such as the ability to trace transactions and reducing transaction fees, creating an illusion of success. It displayed technological potential rather than work within the actual constraints of local contexts and truly empower refugee women.

Garbage In, Garbage Out

One of blockchain’s supposed strengths is its immutability—once data is entered into the system, it cannot be changed. However, this feature is only as good as the quality of the data being entered. Blockchain does nothing to address the integrity of the data input. If the initial data is flawed, whether due to corruption, human error, or lack of training, the technology becomes a “high-tech reinforcement of existing biases and mistakes.”

For example, when the Blockchain Pilot had instances where false or inaccurate data was input into the system, rendering the entire blockchain record inaccurate, there was no way for beneficiaries to correct the bad data.

Payments in the Blockchain Pilot were made by supermarket cashiers instead of the refugee support agencies. Yet supermarket cashiers did not have the expertise or authority to resolve issues with undelivered funds. The cashiers would tell refugees to contact camp staff to resolve the issue, and the camp staff would say its the supermarket cashiers’ problem to solve. Then the cashiers would make up answers to please refugees rather than confess ignorance.

Prioritizing Donor Expectations

The article also underscores how the design of blockchain pilots often prioritizes the expectations of donors over the needs of the communities they are meant to serve. As the authors note, the focus on technological sophistication and donor-facing outcomes often diverts attention from more grounded, practical solutions that could bring real benefit to these communities. In some cases, the introduction of blockchain has even exacerbated inequalities, as those without access to the necessary technology or training are excluded from participating in the new systems being created.

The result is that many blockchain projects deliver more symbolic value than substantive change. They generate positive press, attract additional funding, and allow donors to feel good about their contributions, but the actual impact on the ground remains minimal. This creates a dangerous precedent where the success of a development project is measured by its ability to secure funding rather than by the tangible improvements it brings to the people it’s meant to help.

A Call for Community Solutions

Blockchain, while offering some theoretical benefits, is far from the silver bullet it is often portrayed to be in development circles. The emphasis on donor-driven pilots risks sidelining more practical approaches that address systemic issues—such as lack of infrastructure, education, and healthcare—that keep communities in poverty.

Rather than focusing on the latest technological trend, development organizations and donors should prioritize solutions that address the root causes of underdevelopment. As the article concludes, “the focus should be on sustainable, long-term solutions tailored to the needs and realities of the communities being served, not on impressing donors with technology that may never scale.”

In the end, blockchain pilots may be impressive to donors, but the real measure of success should be their ability to create meaningful, lasting impact for the communities they are designed to serve.