Blockchain provides an opportunity to realign the economics of our global system from a profit-driven to a values-driven ecosystem.
Humanity is facing more problems than climate change. The world is confronted with some of the greatest challenges of our time: world hunger, growing inequality and economic instability. Many believe that the root cause of the entire range of problems faced by humanity is the expansion of the political power of elites as income and wealth distribution becomes more polarized.
Since our beginning, we have used technology to account for value created or exchanged. Humans created the concept of money as a way to reward contributions to society; however, money as we now know it is corrupt. Currently, we are seeing a major inflection point in prioritizing human over financial capital, driven by the intersection of blockchain, decentralized autonomous organizations (DAOs) and nonfungible tokens (NFTs). Today, we have an opportunity to make an impact by taking a firm stance in favor of humanity. Through NFTs, we can start prioritizing people over profit.
Radical transparency
Many people distrust modern social impact organizations — and for good reason. Over the years, investigators have exposed several charities as fronts for profiteering, counter to their humanitarian messages. These organizations have preyed on government subsidies and weaponized unclear ledger systems to hide their profits and maintain a veneer of altruism. Now, many are growing wise to this game.
With blockchain technology, donors can demand better transparency from the organizations. Things like NFT auctions, tied to charitable parties, can display verifiable proof of impact for donors. The blockchain adds radical transparency, improves donor confidence and enables social impact organizations to focus on what matters. As the art community continues to prop up their preferred charities, society can leverage blockchain and NFTs as a new canvas for content and a system for tracing impact — what money was spent where and why.
Related: Digitizing charity: We can do better at doing good
Shifts in incentivizing human capital over solely financial capital
Another indicator of a more prosocial society is that the blockchain challenges the economic basis of human behavior, shifting us from more individualism to collectivism. In his talk at the recent Ethereum Community Conference in Paris, Ethereum co-founder and lead developer Vitalik Buterin described how governments fail at funding public goods because they are “too conformist” or “too exclusionary” in benefiting selective groups.
Blockchain technology represents an important opportunity to change, realign and properly incentivize the economics of our global system to a values-driven instead of a profit-driven ecosystem where human values, such as wellbeing and resilience, are valued as key measures of success over share price and where well-being is for everyone. It is just a matter of time until we prioritize human and social capital over financial capital. This will create new forms of capital, not one at the expense of another.
Related: No, blockchain technology cannot solve everything
Growth in DAOs funding social causes
DAOs have given more voice, control and power to communities establishing their own rules to make decisions autonomously, all encoded on a blockchain. There’s a growing number of blockchain projects focused on funding social causes and public goods.
NFTs and DAOs have made it simpler and more transparent to fund social causes and do good. A worthy example is PleasrDAO, which bought National Security Agency whistleblower Edward Snowden’s NFT for $5.4 million and went on to donate 100% of the proceeds to the Freedom of the Press Foundation. DAOs will continue to make it easier for the people and organizations with resources and motivation to make a difference.
Related: Crypto social governance will lead to online freedom
Increased participation in collective good through NFTs
Another factor we’re seeing take off is what Buterin describes as the legitimacy of participation in his blog post “The Most Important Scarce Resource is Legitimacy.” Buterin muses: “If people participate in choosing an outcome, they are more likely to consider it legitimate.” He adds:
“If the conception of legitimacy for NFTs can be pulled in a good direction, there is an opportunity to establish a solid channel of funding to artists, charities and others.”
Recent use cases across the NFT ecosystem have shown increased participation in the collective good. Tim Berners-Lee sold an NFT of the source code of the World Wide Web for $5.4 million and plans to donate all the proceeds to charitable causes. Another example is a month-long awareness campaign for Open Earth, a climate accounting and technology project spun out of Yale University that culminates on Earth Day.
Related: Earth Day 2021: How the crypto industry is moving closer to going green
Retroactive public funding possibilities
For many charities and NGOs, advance fundraising through donations and grants doesn’t provide sufficiently stable inflows. Retroactive public funding would fundamentally change the funding model for nonprofits. With retroactive funding, there’s a price set by individuals, communities or DAOs for solving a problem tomorrow that creates an incentive for entrepreneurs, organizations and nonprofits to be rewarded in building public goods like Ethereum and other welfare goods.
Even though Buterin believes in retroactive funding, the Ethereum community opted to go forward with Ethereum Improvement Proposal 1559, which will burn Ether (ETH) (the base fee) instead of using this stream of capital to continuously fund those organizations and individuals that are contributing to the creation and maintenance of public goods.
Related: Ethereum’s London hard fork sets ETH on a more deflationary path
For some, it's easier to burn money than to coordinate and fund public goods. As a confessed humanist, that’s massively disappointing to me. This fundamental shift would have been tremendous support for research and development and innovation that maximizes community benefit and the thriving (rather than survival) of more transparent nonprofits. Developments in this space would make unbelievable strides forward for Ethereum and broader society.
The building blocks are here for humans to coordinate and reward those who create a lasting impact. NFTs, DAOs and retroactive public funding make it easier to put humanity first. We’re at a monumental moment for pro-social organizations, where public goods like ending world hunger, championing human rights and economic empowerment can be designed for the long run.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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