Viewpoint | Solving the Trust Problem of Charity Activities

Source: Securities Daily

Reporter: Xing Meng

With the continuous development and progress of society, the public's awareness of philanthropy is further strengthened, and the demand for philanthropic activities is increasing. However, in charitable activities, improving the trust mechanism is an urgent problem in the development of charity. Outside of moral constraints, can the issue of charity credibility be improved through technical means? As a blockchain technology that reconstructs the trust mechanism, what role does it play in resolving the issue of transparency? In response, a reporter from the Securities Daily interviewed Zheng Lei, director of the Digital Economy Research Center of the Hong Kong International New Economic Research Institute and an expert in the think tank of the blockchain industry.

"Securities Daily": China's philanthropy is in a period of rapid development. While the number of philanthropic participants and the scale of funds have repeatedly hit record highs, they are also facing hidden dangers brought by rapid development. What do you think needs to be improved in charity?

Zheng Lei: Charity is an important way to encourage good deeds, advocate virtues, help the poor, alleviate social contradictions, and build a harmonious society. It is a public welfare and non-profitable cause. However, as China's charity regulations are still incomplete, and its system is not complete, supervision still needs to be strengthened, which has restricted the development of China's charity organizations to a certain extent and affected its social functions. For charities to receive sustained support, they must be credible. Information transparency is the prerequisite for obtaining credibility. Transparency of public welfare affects credibility, and credibility determines the development speed of social public welfare. The labor cost required for information disclosure is also an important factor that hinders public welfare organizations from improving transparency.

The current problems in charity platforms are concentrated in the transparency of the use of charity funds. A common problem is that the donor knows how much money he has donated, but does not know how much money has reached the recipient, and how much the donation has produced. At the same time, information asymmetry has also emerged among recipients.

This is mainly because the three key nodes of the charity chain (donor, charity platform, and payee) cannot mutually verify, and it is difficult for the charity platform to implement their charity control. Even if each node has a detailed and accurate record, it is still difficult to check the ins and outs of each donation.

"Securities Daily": Trust is the core of solving charity problems. As a trust-related technology, what role can blockchain technology play in solving the trust problem in charity?

Zheng Lei: It can be said that blockchain technology can play a key role in solving the problem of transparency of charitable funds: First, the three types of nodes, such as donors, charity platforms and payees, can be uploaded to the data, and the entire process is completely disclosed. No matter whether it is a donor, the public, or the demand side, each donation can clearly see the flow of each donation, so that each donation can be implemented. Second, the blockchain technology can open up the data of the front, middle, and back ends to make donations. Both data and distribution data are public, and there is a "time stamp" record for donation or transfer, distribution and use, and each fund can be quickly matched and verified; finally, in this blockchain application, smart contract technology can also be used For directed donations, they are automatically executed by smart contracts, and no human intervention on the charity platform is required, but parties can still monitor and verify the implementation of targeted donations at any time.

Social philanthropy, its participants can obtain psychological satisfaction, social reputation and recognition through charitable activities, these powers can play a sufficient driving force. At this time, tokens can be introduced as a measure of the contribution of charity to society. Its role is similar to medals, certificates of merit, and proof of contribution, etc. It is not necessary to count and enter the transaction link. This can be understood as the process of getting positive returns by participating in the public chain.

In fact, for blockchain technology to achieve convergent development, it needs the support of other new-generation information technologies. For charitable materials donation, as the physical goods are involved in the circulation and storage, the data of these links need to be chained. This requires the support of the Internet of Things technology, a large increase in the amount of data, and the use of cloud computing, big data, and labor. Intelligent Technology.

With the development of technology, the scale, scene, radiation scope and influence of social public welfare have been unprecedentedly expanded, and the concepts of "Internet + public welfare", popular public charity, and fingertip public welfare have gradually entered the mainstream of public welfare. These models not only deconstruct the traditional charitable donation methods, but also promote the development of public welfare behavior towards fragmentation, small amount, and normalization.

"Securities Daily": Can you discuss the specific ideas of blockchain technology to solve charitable activities in combination with specific cases?

Zheng Lei: In charity activities, blockchain technology turns each transaction party into a node in the network, and the assets and products of various institutions are reflected in the network in a digital form, and the problem of mutual trust between institutions is formed to form a unity. The alliance realizes traceability of funds flow, transparent and open information, and information sharing across the network. At the same time, it is based on a distributed account book, which is tamper-resistant and transparent and traceable, avoiding internal cheating risks.

Specifically, the solution based on the blockchain is as follows: First, the blockchain uses a distributed technology and a consensus algorithm to reconstruct a trust mechanism. The data stored on the chain is reliable and cannot be tampered with. It is naturally suitable for social welfare. Scenes. Relevant information in the non-profit process, such as donated projects, fundraising details, fund flows, and recipient feedback, can be stored on the blockchain. Subject to meeting the privacy protection of project participants and other relevant laws and regulations, there are Conditional public announcements. Second, non-profit organizations, payment agencies, audit institutions, etc. can join as nodes in the blockchain system to operate in the form of alliances, facilitate public and social supervision, and make the blockchain truly a "trust machine" to help society The rapid and healthy development of public welfare. Third, the smart contract technology in the blockchain can also play a role in social welfare scenarios. In the face of more complex public welfare scenarios, such as targeted donations, batch donations, conditional donations, etc., it is very suitable to use smart contracts for management. Make public welfare behavior fully comply with the pre-set conditions, be more objective, transparent, and credible, and eliminate spoiled behavior in the donation process.