Let’s talk about the humanitarian cause for bitcoin – in particular how it solves problems of government corruption and how it improves the effectiveness of foreign aid. From the mid to late 20th century, Western countries began investing heavily in foreign aid. Over the past five decades, rich countries have donated more than $4 trillion to poorer countries, with 60% coming from governments and the rest from private NGOs, private companies and charities. While this charity and display of altruism is inspiring and does a lot of good, there are many obstacles in the distribution of aid that prevent it from fully achieving its goal. The first major obstacle is that foreign aid is often distributed by corrupt, autocratic governments. These rulers roll money off the top and give it to themselves, their friends and patrons before giving it to their citizens. The most brutal case of corruption in foreign aid is that of former Congo president Mobutu Seko. Image source He stole foreign aid and bought several mansions across Europe and built an airport near his Congolese home, while his citizens suffered a deteriorating economy and abject poverty. And in cases where money isn’t stolen illegally, aid can be slowly transferred through huge bureaucratic middlemen. Studies suggest foreign aid leakage can vary: “In one Oxfam study, researchers were only able to verify that 7% of $28 million in US aid intended for Ghana reached its destination between 2013 and 2015.” – Alex Gladstein. In other cases, some corrupt, dictatorial governments will block foreign aid, as is the case with countries like Venezuela. Recently, Western countries like the United States provided aid to revolutionary groups in Venezuela, and in retaliation, the current regime blocked foreign aid to their citizens and shut down the banking system, depriving people of the funds they needed. – How does Bitcoin solve the problem of corruption through foreign aid? Well, Bitcoin cuts out the middleman when making transactions. With bitcoin, no governments or banks are needed. When working with fiat, money has to be transferred between different governments and companies before it reaches the final recipient. And through every third party handling the transaction, money is taken from the top and exposed to potential theft. But when we use bitcoin, you can directly donate money to the end recipient peer-to-peer, without the need for an intermediary. This is because of the blockchain. Whenever a transaction is made, it is recorded on the blockchain, which is then accessible to the relevant parties. And the information on the blockchain is stored on a series of computers, keeping everything decentralized. This decentralized, free system undermines the need for an intermediary to manage transactions. As a result, it is impossible for corrupt foreign governments to interfere in aid for the people. So if you want to donate to the pro-democracy movement in Venezuela, you can do it with bitcoin, without worrying about the current regime stealing your money. For most Americans and Western populations, these are issues that affect billions of people around the world. Bitcoin is increasingly becoming a beacon of hope for freedom fighters and impoverished communities. This is a guest post by Siby Suriyan. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.
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