Blockchain helps public welfare charity research report: feasibility analysis, application scenarios, challenges and prospects

Author: OKEx analyst Xiu Xiu

Editor's Note: The original title was "Blockchain Helps Public Welfare Charity Research Report"

table of Contents:

One. Introduction to charity

1.1 Public welfare and charity structure

1.2 Internet Charity 3.0

two. Feasibility analysis of blockchain enabling charity

2.1 The current chaos in the field of charity

2.2 Pain Points of Traditional Charity

2.3 The Necessity of Combining Blockchain with Charity

Application scenarios of blockchain technology in the public welfare field

3.1 Charitable donations

3.2 Information sharing

3.3 Information traceability and accounting

3.4 Credit enhancement and certificate issuance

Challenges and prospects

4.1 Challenges Facing Blockchain Applications

4.2 Future Outlook

I. Introduction to Charity

1.1 Public welfare and charity structure

In the broad sense of modern public welfare charity, in addition to narrow relief, it also includes mutual assistance and voluntary services in education, medical care, health, science, cultural and social welfare and other fields. Therefore, public welfare and philanthropy is a systematic project involving economics, population, legal policies, social and cultural environment, development of charitable organizations, social donations, and voluntary services.

Participants of public welfare and charity:

China's "Charity Law" has a total of 12 chapters and 112 articles, covering issues such as the application for registration, supervision and inspection of charitable organizations, and personal release of help. Among them, the main participants of the three types of charitable activities: charitable organizations, donors and beneficiaries were identified.

Types of charitable organizations:

Charitable organizations are non-profit organizations with the purpose of conducting charitable activities for the society. Its main types are foundations, social groups and social service agencies. Among them, those that meet the requirements of charitable organizations can apply to civil affairs departments according to legal conditions and procedures. Recognized or registered as a charity. After becoming a charitable organization, the organization can carry out activities in the name of "charitable organization", obtain public fundraising qualifications according to law and carry out public fundraising activities, and obtain preferential tax treatment in accordance with relevant tax laws and other regulations. Charitable organizations must ensure that charitable projects can achieve charitable benefits, and conduct information disclosure and supervision in a timely manner.

(Type of charity organization, picture taken from OKEx investment research)

The above picture is the definition and examples of the types of charitable organizations. Different types of charitable organizations have significant differences in registered capital, number of sponsors, annual expenses and management costs of charitable activities, and pre-tax deduction of charitable donations. difference. From the definition in the above figure, only foundations are written into the definition of "for the purpose of engaging in public welfare undertakings", which is also an important reason why charitable organizations are mostly foundations. According to the charity information statistics currently collected in "Charity China", the search results totaled 6793 pieces of charity data, of which there were 2107 pieces of charity data that are eligible for public fundraising.

(The picture is taken from the website screenshot)

The main affairs of charity:

The main affairs of public welfare and charity can be divided into charity fundraising and voluntary services. According to the data in "The Steady Development of China's Public Welfare Charity Industry in 2018" released by the China Public Welfare Institute, in 2018, the Ministry of Civil Affairs and relevant ministries and commissions issued a total of 21 regulations and policies in the field of public welfare and charity, focusing on promoting "standardization" of public welfare and charity And "sustainable" development. Social organizations have entered a period of steady development. In 2018, 70,978 new social organizations were added, with a total of 79,2016. Among them, there are 760 new foundations, with a total of 6,882. Charitable donations have increased steadily, and the annual social donation has exceeded 140 billion yuan for two consecutive years, reaching a historically high level. Internet fundraising has grown rapidly. From January 2017 to June 2018, the total amount of fundraising for the first batch of Internet public fundraising information platforms exceeded 3.57 billion yuan, with 9.82 billion Internet users paying attention and participating.

Statistics on volunteer services show that as of the end of December 2018, the number of registered volunteers had exceeded 10.973.2 million, the total number of volunteer groups was 584,000, the total number of volunteer projects was 2.094 million, and the total number of volunteer services provided by 17.315 million people reached 13.02 100 million hours. According to charity China data, the total value of Chinese volunteer contributions in 2018 was 82.364 billion yuan, an increase of 50.36% over 2017. This shows that the society as a whole attaches more and more importance to the practice and contribution of charity, and has invested more enthusiasm and hard work. This will promote the development and progress of philanthropy, and will further require transparency of philanthropy information and detailed regulations.

(Volunteer service contribution value picture from "Charity Public Welfare Blockchain Application Survey")

1.2 Internet Charity 3.0

Over the past three decades, China's philanthropy has grown rapidly with the development of the overall economy. Its historical evolution has gone through stage 1.0 of government endorsement of charity organizations, stage 2.0 of corporate support for charities, and stage 3.0 of current Internet charities.

With the advancement of technology and the development of digital technology, the popularity of the Internet / mobile has brought about a new era of media with high accessibility, transparency and user-friendliness. Digital payment has increased the opportunities for individuals to contact charities, and with the people's charity The awakening of consciousness and social responsibility consciousness has shown tremendous strength in the past few years. Today, when people find that they are concerned about charity issues, they can participate in donations online.

After entering the 3.0 stage of Internet philanthropy, many gratifying changes have taken place in China's philanthropy. First, the development of charity organizations is more mature, mainly in terms of rapid growth in number, wide coverage, and innovation and entrepreneurship in the field of charity. The new model of participating in donation has expanded the scale of online fundraising and pushed China's public welfare charity out of the era of resource shortage. Third, the transparency of charitable organizations has been relatively improved. The open, transparent, and rapid dissemination of the Internet has promoted the information disclosure and charity projects of charitable organizations Development of information dissemination and information feedback for recipients.

According to data from Bain's China Online Philanthropy Report published in 2018: From 2011 to 2016, China ’s total charitable donations have grown at a compound annual average rate of 11%. In 2017, China ’s total charitable donations reached 156 billion yuan, of which corporate donations accounted for about 60% -70% of the total donation value, and personal donations account for about 20% of the total market. In 2016, the number of individual donors in China reached 91 million, ranking fourth in the world, but this only accounts for 7% of China's population, which shows that there is huge room for personal donations to grow.

In addition, online donations accounted for less than 6% of personal donations during this period. In terms of demand, only about 40% of charitable organizations with public fundraising qualifications and 2% of NGOs appeared on Tencent's charity platform in 2017. . Therefore, the growth potential of online charity fundraising is also huge.

two. Feasibility analysis of blockchain enabling charity

2.1 The current chaos in the field of charity

Of course, the characteristics of openness, transparency and rapid dissemination of the Internet also put forward higher transparency requirements for public welfare and charity. As charitable organizations play the role of trust intermediaries from donors to recipients, their credibility affects the enthusiasm and confidence of the public in participating in public welfare charities in China. The scandal of charity organizations exposed online is more likely to cause a wide range of lack of trust.

The charity scandal will greatly weaken public trust and willingness to donate. 2011 is the year of accountability for public welfare charities. The "Mei Meimei Red Cross Incident", "astronomical meals", the "China Charity Federation's" Shang De Men "incident, and the Song Foundation event, etc., all concentrated outbreaks, involving many giant charities. Has a huge adverse effect. As a result, the total amount of social donations for the whole year of 2011 decreased by 18.1% compared with the previous year. The donation income of the Chinese Red Cross involved in this case jumped directly from 3.012 billion yuan to 558 million yuan. Since then, total personal donations have fallen by 60% from 2011 to 2014.

From the data, we can see that the poor management and improper operation of funds of these charitable organizations have caused bad social impact. In recent days, the negative information of charitable organizations has continued to emerge, causing the public to question the charity organizations again. And it has led charities to an unprecedented crisis of trust.

Wu Huayan incident:

This year, Wu Huayan, a 24-year-old female college student who weighed only 43 pounds in Guizhou, died, and a short video account raised 450,000 yuan for Wu Huayan. Before Wu Huayan did not collect the money, she claimed that "I have given my love to Wu Huayan." on". The charity platform "9958 Children's Emergency Rescue Center", which launched fundraising in its name, was exposed to raise over 1 million yuan, but only gave 20,000 yuan to the Wu family. It is reported that Wu Huayan himself did not know when "9958" opened the fundraising. In the fundraising copywriting and news release, he mapped the eradication of Wu Yanhua ’s school and the local government ’s national welfare to apathy and indifference. paragraph. Securities Times News pointed out that the public welfare person reported "9958" Wang Yutun, the director of the real name, to donate money for financial management. Some netizens found that the platform is also suspected of using other dead children to continue to raise funds, suspected of fraudulent donations. The child has passed away and actually says "discharged from rehabilitation" on the official website's project progress page. As early as 2016, the Beijing News reported that "9958" suspended the transfer of money to the child for 36 days for various reasons, with a maximum delay of 11 days and delay in the treatment of the child.

This example alone shows the problem of fraudulent donations by non-charitable fundraising organizations or individuals in the current Internet philanthropy, as well as the problems of charity organizations in the management and use of fundraising, such as fraudulent donations, excessive fundraising, non-special funds, Fraudulent disclosure of information, malfeasance of employees, hoarding of good money in disguise for private gain, etc.

Wuhan Red Cross incident:

The outbreak of coronavirus pneumonia occurred in Wuhan at the beginning of the year. After the outbreak of the fight against the epidemic, the shortage of medical supplies, including masks, alcohol, and protective clothing, broke out in Wuhan's first-line hospitals. At this time, various units, institutions and thousands of netizens are continuously donating materials to Wuhan, and the Oke Group has established a special fund of 10 million yuan for epidemic prevention and control to support the new type of coronavirus epidemic prevention work. According to a number of media exposures, many of these relief supplies were piled up in Wuhan Red Cross warehouses and were not delivered to various hospitals in a timely and effective manner. A report from China Economic Weekly pointed out that the Hubei Red Cross and Wuhan Red Cross are experiencing a major crisis of trust.

In this incident, the problems of charity organization's material distribution did not meet actual needs, and the distribution and distribution efficiency was low. In addition to some subjective human factors, the low degree of digitization also aggravates the problem. From the moment of donation, there is no open and comprehensive system that can trace the location of the material in real time. As a result, reporters must visit the site to find that the material has been backlogged for a long time. Secondly, the distribution of materials and the scarcity of hospital resources are not effectively linked, and there is also a lack of public supervision. The materials donated by the public cannot be accurately delivered to the hospital.

These actions have harmed the social credibility of public welfare charities to varying degrees, and have brought about a negative impact on the development of public welfare charities, reflecting the crisis of trust and efficiency facing charities and charitable activities.

At present, in the public opinion system, the public's main concerns are: whether the rescue target is the one that needs the most assistance, whether the rescue target is real; whether the largest proportion of charity is actually used or given to the recipient; the operating cost of the charity (Wages and administrative costs) what percentage is from charity; whether the charity project itself is valid and legal, and whether the process is transparent and supervisable.

2.2 Pain points of traditional charity

In the case of increasing donations year by year, charities still have pain points such as low credibility, insufficient transparency, and insufficient overall management capabilities, and they are facing a crisis of trust and efficiency.

2.2.1 Lack of public trust

The most serious problem currently facing philanthropy is the lack of public trust. In China's existing charity management, problems such as inadequate external supervision and inadequate internal governance mechanisms can be seen everywhere, and charitable organizations have shown many deficiencies in information disclosure. The main reasons for the low credibility of charities are as follows:

1. The imperfect legal system of public welfare causes difficulties in supervision and opaque capital flows.

2. Imperfect internal governance mechanism of charitable organizations leads to the problems of poor management and improper operation of funds.

3. Insufficient information disclosure by charitable organizations has led to many loopholes in the charity chain that can be operated in black boxes.

 

2.2.2 Low processing efficiency

Another big issue currently facing charities is their low efficiency. Due to problems such as cost dilemmas and inadequate charity organizations, the internal management of charities lacks sufficient supervision and auditing. Traditional public welfare information sharing is limited, and there are many problems in money management and information recording. The manual process also increases the cost of public welfare audits:

1. High cost of public welfare audit

2. Limited money management and information record sharing

3. Public welfare funds first enter the account of the central institution, and then are processed by the institution. Multi-level operations increase project costs.

4. Low material distribution efficiency

2.3 The Necessity of Combining Blockchain with Charity

2.3.1 Highlights of the blockchain

Blockchain is a data infrastructure that uses block-chain data structures to verify and store data, uses distributed node consensus algorithms to generate and update data, uses cryptographic principles to encrypt data, and uses smart contracts to operate the data infrastructure. Trust built through blockchain technology can effectively eliminate high trust costs. Its highlights include decentralization, asymmetric encryption, smart contracts, and token ecological incentives.

(1) Distributed ledger, decentralization

In the blockchain system, transactions are broadcast to the entire network as soon as they are confirmed, and each node records the received transaction information on the ledger synchronously, which simplifies the information update process and reduces the organization's operating costs. At the same time, because each node has a full amount of ledger data, the transaction data can be endorsed by multiple nodes, which avoids the loss of the ledger and avoids the possibility of a single bookkeeper being controlled or bribed to keep false accounts, ensuring the security of the account data. In addition, because the cost of tampering with transaction data is very large, the non-tamperable nature of distributed data storage also enhances the credibility of the data, thereby increasing the credibility of the platform. In addition, each node of the blockchain stores complete data in accordance with the block chain structure. Data information can be traced through the "time stamp" technology and chain structure. Each event and transaction has a time stamp and becomes a long chain. Or part of a permanent record so transactions can be traced.

(2) Asymmetric encryption, data cannot be tampered with

Asymmetric encryption refers to the use of a key pair for encryption and decryption. Encryption and decryption use different keys. The information encrypted by the public key cannot be decrypted even if intercepted on the Internet, because the information encrypted by the public key can no longer be decrypted by the public key. Instead, the private key must be used to decrypt the private key. Only if you have it, you can ensure the security of the information. Therefore, this asymmetric encryption method can encrypt the user's identity information, while ensuring the information security, it can also verify the user's identity. In addition, the data on the blockchain cannot be tampered with, and any tampering on the blockchain will leave cryptographic evidence and be quickly discovered.

(3) Smart contract

A smart contract is a computer protocol designed to propagate, verify, or execute a contract in an informational manner. Based on these credible and non-tamperable data, a fully automated process can be adopted without any human involvement. As long as the requirements listed in the smart contract code are met, some predefined rules and terms can be automatically executed. These transactions can be Tracking and irreversible. The advantages are higher efficiency, lower costs, more accurate transactions, and cannot be changed. In addition, smart contracts remove any third-party interference and further enhance the decentralization of the network.

(4) Token Ecological Incentive

The blockchain-based token economy wants to turn originally free social behavior into market behavior inspired by money derivatives, and imagine that it can be accurately quantified and targeted to produce valuable behavioral results. In addition to the role of payment or value storage, tokens are also designed to have more complex and diverse functions such as equity, financial assets, reward points, and so on. In the decentralized blockchain world, the incentive mechanism is the core point of the distribution and use of benefits. The network consensus is reached through the incentive mechanism, so that participants in each link of the blockchain can get corresponding returns, and the division of labor is clear 3. Actively complete various tasks, and protect the system to a large extent from various threats and attacks. This is equivalent to the participants jointly maintaining the security of the system and promoting the ecological development of the system.

In summary, the blockchain is a distributed accounting technology with multiple parties maintenance, full backup, and information security. It has the characteristics of decentralization, immutability, leaving traces throughout, traceability, collective maintenance, openness and transparency. These characteristics ensure the "honesty" and "transparency" of the blockchain and lay the foundation for the blockchain to create trust. The rich application scenarios of the blockchain are to solve the problems of opaque information, insufficient incentives for participants in various links, and low overall operating efficiency of the system, and to achieve collaborative trust and concerted action among multiple subjects.

2.3.2 Enabling points of blockchain for public welfare and charity

(1) Information traceability

Blockchain can ensure that data cannot be tampered with and can be traced throughout. 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.

In terms of fund donation, donating funds is a financial activity, which meets the requirements of the value of the blockchain. Therefore, the non-tamperable timestamp of the blockchain can effectively trace the whereabouts of the donation and ensure that the donors donate The flow of funds can be clearly and inquired, so as to ensure that the use of funds is safe and controllable, and the funds are dedicated. In terms of material donation, the items on the chain are also "transparent" and trustworthy, and the cost of trust at the item level can be quickly reduced. With the popularity and wide application of the Internet of Things, the dataization and recordability of materials are now more feasible and reliable. Realizing real-time traceability of materials can greatly improve the quality of material distribution.

(2) Information sharing

Blockchain technology has distributed characteristics. Each node stores complete information on the chain. It can ensure that information is secure and transparent, and real-time data sharing is faster, reducing the cost and burden of information sharing. Once the blockchain technology is applied, each donor will have a "ledger", and the flow of funds will automatically generate the corresponding data mark, which will be recorded in the "ledger" of each donor. This move has eliminated the burden of manual statistics, and also achieved real-time updates and public announcements.

(3) Protection of privacy

Anonymity can protect the privacy of donors. At present, personal information leakage in China is very common, and some parties to charity projects do not want their information to be disclosed. The use of blockchain encryption technology can better protect Donor and donor privacy. Only holding the project private key can see the information about the project, and other people cannot get the details of the project.

(4) Improve execution efficiency

The automation of the smart contract process requires only the relevant conditions and requirements to be set, and the smart contract can be automatically executed. The public welfare behavior fully complies with the pre-set conditions. It is more objective, transparent, and credible, reducing collaboration costs and errors. rate. Directed donations, batch donations, conditional donations, etc. are automatically executed by smart contracts, so that funds and materials are automatically allocated, 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. The use of blockchain smart contracts can solve problems such as complex processes and black-box operations in traditional charitable public welfare projects, and eliminate clutter in the process.

(5) Mobilize ecological vitality

Utilize the token incentive mechanism to carry out fair benefit distribution on the chain and regulate members' behavioral norms. Tokens can also be used as a measurement tool for volunteers' charitable behavior to the society, and its role is much like medals, certificates of merit, and proof of contribution, without having to count and enter the transaction link. This will expand the scale of volunteer service organizations and promote the development and progress of charity.

(Picture from OKEx investment research)

 

Blockchain technology may help charity:

1. Establish an open and transparent traceability system.

2. Improve operation efficiency and reduce supervision and audit costs through smart contract technology.

3. Establish a credit relationship between all parties and a credit evaluation system.

Blockchain technology's distributed accounting, decentralization, asymmetric encryption and other features have restructured the trust mechanism in a technical way, which corresponds to the problems of information disclosure and transparency that have been criticized in traditional public welfare charity projects. Fundamentally solve the public trust problem. In addition, blockchain technology also simplifies the intermediate processes of supervision and auditing in public welfare charity projects and reduces the operating costs of charities.

(Blockchain Charity 4.0)

 

Application scenarios of blockchain technology in the public welfare field

In the public welfare field, through the use of distributed ledgers to track donation information, the use of digital currencies (the digital currency of RMB is expected to be launched this year) to transfer funds, and the use of smart contracts to ensure that each donation is spent reasonably. There are four specific application scenarios: charitable donations, information traceability and bookkeeping, credit enhancement and voucher issuance, and information sharing.

3.1 Charitable donations

Advantages of Blockchain Technology in the Charity Donation Scenario: For donors, using blockchain technology to make donations is more convenient and safer than traditional donations, without having to worry about misappropriation of funds, and without questioning the reliability of the recipient institution Through blockchain technology, donations can realize anonymous donations while disclosing specific information; for charities, expanding the channel for accepting donations can attract more donors to participate, and the decentralized nature of blockchain can be reduced The fundraising costs such as expenses and time incurred in the process of receiving donations will improve the efficiency of donations. Donors can donate to charities on the platform through the future central bank's digital currency payment system; at the same time, the platform can also accept other cryptocurrency donations.

Case: One Foundation accepts Bitcoin donation for Ya'an earthquake

In April 2013, the staff of One Foundation announced the donation address of bitcoin on Weibo, and raised money for the Ya'an earthquake by raising bitcoin online and realizing it. As of April 25, according to the staff, One Fund has obtained more than 233 Btc (valued at more than 200,000 yuan according to the exchange rate at the time). As a result, One Foundation became the first foundation in China to accept Bitcoin donations.

3.2 Information sharing

Advantages of Blockchain Technology in Information Sharing Scenarios: Blockchain technology maintains a consistent consensus mechanism and open characteristics of the data of each node. Naturally, it has the function of instant information sharing, which can be faster and more effective on the premise of ensuring information security. Low-cost real-time sharing of effective information. At the same time, clarify the respective permissions of members on the chain, avoid redundant information, completely solve the problem of repeated information submission, reduce the operating cost of information systems, and reduce the burden of information sharing.

Case: Blockchain technology helps government share information in real time

In August 2017, the Illinois State Government and Hashed Healthcare launched a pilot project for medical information management based on blockchain technology. By deploying localized blockchain nodes, various government departments can quickly synchronize the blockchain's distributed ledger and business system data without uploading and downloading to the central data server. This project not only reduces the workload of the government and other related parties, but also protects data privacy through encryption algorithms, and also reduces the cost of data sharing and maintenance.

3.3 Information traceability and accounting

The advantages of blockchain technology in the information traceability scenario: The characteristics of distributed storage of blockchain technology naturally have accounting and information traceability functions. In the field of public welfare, the recording and tracing of charitable donations has become one of its main applications. In terms of fund donation, due to the inherent financial nature of the donation funds, which naturally meets the requirements of blockchain data, the non-tamperable timestamp of the blockchain can effectively solve the problem of traceability of charitable donations and ensure the use of charity donations. Openness and transparency; in terms of material donation, with the popularization and wide application of the Internet of Things technology, the data and traceability of offline donated materials have become simpler.

Case: JD Charity uses blockchain technology to realize material traceability

In September 2017, as the nation ’s first attempt to trace the donation process of materials and public welfare by applying blockchain technology, the “Shoumeng Angel Searching Journey” public welfare project initiated by the Beautiful China Education Program was officially launched on the Jingdong Public Welfare Connected Platform. Through the combination of blockchain technology and the Internet of Things, the full flow of donated materials can be uploaded to the chain to ensure the transparent and traceable information of the material transfer, which greatly improves the user experience of online donors.

3.4 Credit enhancement and certificate issuance

The advantages of blockchain technology in the credit enhancement scenario: The decentralized storage mechanism of blockchain technology ensures that no institution can tamper with the data arbitrarily, improving the credibility of the information, and also providing credit for identity information and other certification credentials endorsement. At the same time, it can also help relevant parties to verify the authenticity and originality of the data during the data transmission process without relying on the central organization; since the data required for verification is synchronized when all business occurs, Data verification can be completed locally in the verification department, thereby improving verification efficiency. The asymmetric encryption algorithm's security mechanism also makes certificate verification and management easier. The use of blockchain technology can establish digital certificates that cannot be tampered with, thereby establishing a new credit authentication mechanism and improving the management level in the public welfare field.

Case: Chengdu Youth Volunteer Service Blockchain Alliance Issues Volunteer Service Certificate

In April 2018, the Chengdu Youth Volunteer Service Blockchain Alliance was established and issued the nation's first youth volunteer service blockchain certificate. As the nation ’s first group organization blockchain alliance, this system can record data such as volunteer activity records, service duration, and public welfare points, and generate a unique and authentic volunteer service blockchain certificate for certification and management of future volunteers. The technical foundation was consolidated.

Challenges and prospects

4.1 Challenges Facing Blockchain Applications

Blockchain has already been used in charity donations, information tracing and bookkeeping, credit enhancement and voucher issuance, and information sharing. However, as an emerging Internet technology, the in-depth application of blockchain technology in the field of public welfare still faces the following challenges.

4.1.1 Authenticity of information before chain

Although blockchain technology can ensure that the information on the chain cannot be tampered with, in application scenarios that do not have data closure, the blockchain is used as the underlying storage system for data, and it is impossible to judge the authenticity and ownership of the information before the information is uploaded. Once the characteristics of the chain cannot be changed, higher requirements are put forward on the authenticity of the information before the chain. This may increase the cost of agency information verification. Therefore, for the blockchain, only the applications with closed data can truly exert the capabilities of the blockchain.

4.1.2 Weak self-driven reform of public welfare platform

Blockchain philanthropy is tantamount to putting the rights of charitable organizations in a cage. There are so-called "charitable organizations" that rely on commercial groups. The essence of them is not to "do good deeds" but to help affiliated companies, members to operate or individuals. The income was evaded in the name of "good money", and I turned my head to find ways to transfer the "good money" into my pocket. Therefore, the large-scale application of blockchain public welfare charity requires the higher level of the industry, and even national level recognition and guidance, from top to bottom to establish the role of blockchain technology in public welfare and charity organizations, and strengthen supervision and management.

4.1.3 Lack of corresponding legal system guarantees

The lack of specific legal regulations is a major challenge for the application of blockchain. Due to the lag of laws and regulations, the legal system of each country is still in the exploration and inspection stage of the blockchain technology. Whether it can be applied in the public welfare field and how to apply it has not yet formed specific specifications. In the absence of corresponding legislative support, how to coordinate the algorithms used in smart contract signing with the existing legal system has also become a major challenge for the comprehensive application of blockchain technology in the public welfare field. If it is not recognized by law, smart contracts will also lack legal recourse, and the rights and interests of both parties to the contract will not be protected by law.

4.1.4 Legal risks of tokens

Due to the differences in culture, cognition, and economy of different countries, it is bound to create differences in attitudes and policies on emerging technologies. In view of the unknown risks to the emerging technology, countries around the world currently do not have relatively unified market management principles and legal regulatory environments for the development of blockchain projects. Among them, the performance of blockchain project tokens is the most prominent, such as compliance in some regions and prohibition in some regions. The chaotic global policy environment is also one of the important constraints for integration and expansion.

4.2 Future Outlook

Blockchain can solve the problem of transparency criticized in traditional public welfare charity projects, fundamentally solve the public trust problem, improve the credibility of charities, reduce the corresponding supervision and audit costs, and make the development of charity more complete. With the deep integration of blockchain and charity, it will start the new 4.0 stage of blockchain charity, bringing new opportunities for charity. At that time, the information disclosure mechanism, charity tracking mechanism, government information supervision mechanism, and audit mechanism for charities in the field of charity, the positioning and business focus of charitable organizations, relationships with stakeholders, operating models, organizational finance and information disclosure Everything will change.

At present, blockchain + charity is still an emerging method of donation. There is still a long way to go before it can be implemented on a large scale globally. It is believed that with the increasing popularity of blockchain technology, blockchain will be applied by more and more charities and donors.

References:

China Online Philanthropy Report

https://mp.weixin.qq.com/s/puHcJDePmbtD96cZEeO3rA

Leading by the society | China's public welfare and charity industry develops steadily in 2018

http://www.chinadevelopmentbrief.org.cn/news-22650.html

On the application of blockchain technology in the field of public welfare and charity

https://mp.weixin.qq.com/s/E6VB2HWcupdqr34YlUkyuw

The trust crisis frequently occurs in the charity industry. How can blockchain implement charity supervision?

https://www.tuoluocaijing.cn/article/detail-9989332.html

Investigation on application of charity and public welfare blockchain

https://www.tuoluocaijing.cn/article/detail-79256.html