Despite being just two years old, the Irish start-up Aid:Tech is making serious headway with the UN and Red Cross to make aid entirely transparent, using blockchain technology.
Like many novel ideas, Aid:Tech came about as a potential solution to a problem that landed at someone’s feet, almost quite literally.
In 2009, CEO Joseph Thompson was attempting to raise a considerable amount of money for charity by running the gruelling Marathon des Sables in the Sahara Desert.
A significant amount of cash was raised, and Thompson’s goal of raising the money to give to children in need of reconstructive surgery appeared to be achieved.
However, as time went on, it became apparent this was not the case. In 2010, one of his biggest charitable donors asked what had happened to the money for his charitable cause.
“I went back to my charity and they said the money had been used to build a school,” he said in conversation with Siliconrepublic.com.
“I was annoyed at the fact I couldn’t trace where the money went. That was the initial birth [of Aid:Tech] which I didn’t realise at the time.”
It would take another five years before Thompson decided to chuck in his job as a consultant in a bank and use his software background to tinker around with a fledgling technology called blockchain.
Born out of frustration
In the same year that Thompson became frustrated with where his charitable earnings had gone, the first successful cryptocurrency – bitcoin – sprang up, ushering in a new decentralised economic system.
While the long-term future of bitcoin remains uncertain, the blockchain technology behind it is seen as the unexpected darling of the financial industry.
“With the advent of blockchain becoming on stream, we saw its potential in 2010 and 2011,” Thompson said. “You could have something that could intermediate in the distribution of the international aid with full traceability.”
In 2012, the UN Secretary-General Ban Ki-moon spoke about the seriously worrying levels of aid corruption globally.
Aid:Tech cites that $1.1trn of essential aid is lost through global corruption, while 30pc of the $161bn donated by OECD countries each year simply ‘disappears’.
How the technology works
What the start-up believes is that with blockchain behind these huge sums of money, total accountability and losses would be cut dramatically, if not entirely.
To implement this, Thompson and his team of three staff have developed an intelligent voucher system that is distributed to whoever is in need of aid, like someone at a refugee camp.
Each voucher would contain a unique ID for one person that can be ‘topped up’ with aid used for money, food etc and spent at a centre.
The blockchain transactions are then completed by scanning a QR code using a mobile phone and confirming it over local Wi-Fi.
But despite gallant efforts to bring internet and Wi-Fi access to refugee camps, many are still without regular access to it, so what about them?
Thompson said that in this instance, their app that scans the vouchers can connect the two via Bluetooth, and by issuing out Raspberry Pi computers to store owners or aid workers, they can be collected at the end of the day and uploaded online later on.
The Aid:Tech platform in action in Lebanon.
Results from field testing
It is not a foolproof plan however, as transient refugees fleeing from a warzone might not be in the right position – or frame of mind – to get assigned a digital ID.
“In an example like Syria,” Thompson said, “it is extremely, extremely difficult to work [there]”, but despite this, Aid:Tech has already rolled out a trial project in Lebanon to help Syrian refugees with the Irish Red Cross.
Of the 500 vouchers issued to refugees, Aid:Tech’s systems were able to find that 20 fraudulent vouchers were created to fool the system, but all failed to get access to aid.
Having been spent close to three months in London as part of the Techstars accelerator, Aid:Tech has been busy securing deals with some aid organisations you might have heard of, such as the UN and the International Federation of the Red Cross, and Concern in Ireland.
Its deal with the UN is of particular interest to the start-up as it gives it an insight to where it wants to take the company next: social welfare payments in the form of remittance.
Beyond aid distribution
By using the same smart voucher technology, a small trial in Serbia is beginning to issue social welfare payments that can be tracked with the intention of not only making it a cheaper system to run, but cutting out intermediaries like Western Union.
Over the course of 2016 and 2017, Aid:Tech also has plans to roll out projects in Haiti, France, Malawi and Pakistan. It has revealed it is in discussions with Concern to adapt the start-up’s technology for aid distribution.
On 27 October, the start-up will battle it out with nine other finalists to be chosen as one of three winners of the EU’s Integrated Futures competition, designed to encourage European groups to come up with solutions to the problems affecting our society.
In five years’ time?
As the only remaining Irish entry to the competition, it could receive €50,000 if chosen among the final three. This would aid its bid to expand its staff numbers, which Thompson has said is already among its short-term goals.
“What we would love to be in five years’ time is the transparency engine for aid and social welfare,” he said.
“We also want to go into different markets like the development economy – including areas like micro insurance and micro pensions – and we’re developing that already to work with our clients.”
With recent news of the imminent destruction of the refugee camps at Calais in France, such technology might not come soon enough.