Blockchain ‘conjuring’ fails to improve humanitarian aid — Study

Blockchain mostly fails to improve humanitarian projects and is a “conjuring” used to raise funds, digital anthropologist Margie Cheesman concluded in a research paper published on Aug. 13. 

Cheesman observed the work of a blockchain humanitarian project from May 2018 to December 2019 and found that the use of blockchain provided little benefit to the project while adding some costs.

Her paper, “Conjuring a Blockchain Pilot: Ignorance and Innovation in Humanitarian Aid,” was published in the journal Geopolitics.

In it, the project is referred to as “Cash4Work,” although this name is a pseudonym meant to keep the project’s identity a secret. Cheesman was allowed to do her research on the condition that the project’s real name not be revealed.

The program was located in the Al-Za’atari and Al-Azraq refugee camps in Jordan, and its purpose was to provide cash assistance to individuals who needed help with basic necessities. In exchange, these individuals performed work for firms partnered with the charity.

According to the paper, Cash4Work relied on another humanitarian organization, pseudonymously identified as “The Blockchain Pilot,” to store and process all of its data.

The Blockchain Pilot advertised the benefits of blockchain to donors through “articles, press releases, videos, and webinars,” claiming that it would revolutionize humanitarian aid efforts. However, the head administrator of Cash4Work told Cheesman that this was all for show, reportedly stating, “Donors like to hear we are using blockchain because they like innovation, especially if it is about efficiency and tracking where their money is going. And as we all know, donors are really the be all and end all in this [humanitarian aid] sector.”

“It’s kind of bad that we’ve received so much attention and investment with this pilot even before we’ve done anything. Don’t hate the players hate the game, I guess.”

The researcher also chatted with three Cash4Work aid workers on the way to Al-Za’atari camp in May 2018. When they were asked about blockchain, two of them claimed to have no knowledge of it. 

“I’m not the right person to ask. I don’t know blockchain,” one of them reportedly stated. The second worker exclaimed, “Don’t ask me about blockchain either!“ A third worker claimed to know about blockchain but could provide no explanation of what it was other than “the future” and “Blockchain means we are trying new things to improve our organisation.”

The program administrators viewed blockchain as a “conceptually elusive, magic technological object that could without clear explanation achieve an extensive range of desirable effects,” the report stated. They often confused it with other, unrelated technologies, such as digital wallets and biometric identification, which did bring clear benefits but did not require blockchain.

The Blockchain Pilot was “a private, permissioned blockchain system,” not a public one like Bitcoin or Ethereum. Only aid agency administrators could process transactions. This meant that the new technology did not empower recipients, as their wallets were ultimately owned by Cash4Work rather than themselves.

In addition, the new system no longer allowed aid workers to hand out cash at women’s centers as they had previously done. Instead, these payments were made by supermarket cashiers. This created extra friction in the system because the supermarket cashiers did not have the expertise or authority to resolve issues with undelivered salaries.

In some cases, if a recipient was owed money and didn’t receive it, the cashiers would tell them to contact camp staff to resolve the issue. However, when they contacted the camp staff, they were told that the supermarket would handle the problem.

The cashiers would also make up answers to please the recipients when they didn’t possess the information being asked for. “The cashiers had received training about how to deliver the Cash4Work salaries,” the report stated. “But it transpired that sometimes they would give misleading information rather than confess ignorance.”

The report calls these new problems “disappearances,” which it defines as “blind spots, erasures, and dislocations from knowledge that arose in the design and everyday maintenance of the blockchain.” In Cheesman’s view, these disappearances occur because blockchain charity projects need to raise funds using opaque techno-babble, which causes ignorance among the participants, making the project less efficient.

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According to the report, the project also used a strategy of “misdirection” to counter criticism. When the Cash4Work admins became aware of recipients’ criticisms of the new system, they claimed that the use of blockchain couldn’t be measured by its actual results in the field, as these results deal merely with the “implementation” of the technology. For example, an aid administrator identified as “Alex” reportedly stated:

“You need to isolate the technical achievement from the implementation […] It’s good to get the refugees’ impressions, but then there are also hard metrics. Like, the transaction processing times and how they are vastly reduced. That’s facilitated by and also captured with the blockchain. Again, I think it will be important to convert perception to reality.”

Cheesman’s conclusion is that this and most other blockchain humanitarian programs rely on “key forms of ignorance” to raise funds and perpetuate power structures in society. These forms include “(i) confusion, (ii) illusion, (iii) disappearance, and (iv) misdirection.” 

The technology is mostly used to perpetuate these forms of ignorance rather than to benefit recipients. The report calls this process of perpetuating ignorance a “conjuring,” comparing it to a spectacle or magical appearance used to fool the audience.

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Despite criticism, the report acknowledges that blockchain may have provided one clear benefit to the project: dramatically lowering fees for payments. It cites one of the administrators as stating: “Using blockchain as an alternative accounting system meant rerouting the agency’s (donor) funds around local banks and therefore drastically reducing transaction fees on aid transfers (now nearly zero).”  The report did not find evidence confirming the lower fees but did not dispute it either.

A report from the Digital Humanitarian Network in October 2022 also claimed that many humanitarian projects are not helped by incorporating blockchain. However, it provided examples of some projects that have been improved by the technology, including the World Food Programme’s Building Blocks campaign, which used blockchain to reduce duplicative aid.