For decades, funding public goods – from scientific research to open-source software – has relied on traditional methods with bureaucratic limitations. But a new wave of innovation is emerging, driven by the transformative power of blockchain technology.
By automating processes and eliminating intermediaries, blockchains can streamline funding procedures, making them faster and less prone to human error, writes Sophia Dew of the Public Goods Network. At the same time, blockchain removes geographical barriers, allowing anyone around the world to contribute to public good initiatives. This opens doors for broader participation and diverse funding sources in a way that traditional methods never could.
Blockchains offer many unique funding mechanisms, including smart contracts – self-executing contracts that can automate the release of funds based on pre-defined conditions, ensuring efficient use of resources and project completion. Cryptocurrency also makes microdonations possible, enabling smaller contributions to have a cumulative impact.
Effectively, blockchain-based public funding represents a novel approach to democratized funding – enabling people located around the world to allocate support to projects that are seen as most valuable.
By using blockchain technology, community-driven decision making comes closer to being a constant reality. Dew cites several examples, including GainForest, a Swiss non-profit organization that tackles deforestation by utilizing a combination of artificial intelligence (AI) and blockchain technology and Voicedeck, a platform aimed at revolutionizing journalism funding by using a decentralized system based on blockchain technology.
Simultaneously, blockchain transactions are recorded on a public, shared ledger, providing a clear and verifiable record of where funds are going and how they’re being used. Transparent and efficient funding can incentivize long-term support for public goods, fostering a more sustainable funding model that benefits project planning and stability.
Put simply, the arrival of blockchain technology to the public goods funding sphere is nothing short of revolutionary. Now, rather than submitting to the bureaucratic ordeal of receiving, recording, and administering funds, organizations can utilize a much faster, more streamlined, and more transparent system. Furthermore, since blockchain opens doors for new funding models and community-driven initiatives, it can potentially lead to breakthroughs in the public good sector beyond what we can currently imagine.
