How Cryptocurrency and DeFi Can Do Good in the World

The crypto community is still rather niche. The value of all cryptocurrencies in the world still only amounts to about $900 billion at the time of this writing. Four U.S. companies — Apple Inc. (ticker: AAPL), Microsoft Corp. (MSFT), Alphabet Inc. (GOOG, GOOGL) and Amazon.com Inc. (AMZN) — each have valuations greater than the sum of all the cryptocurrencies in circulation.

Considering the enormous size of the stock market, still just 58% of Americans own stock, according to a 2022 Gallup survey. Even fewer understand stocks well.

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So it’s no surprise that the much smaller — and far more arcane — world of crypto, blockchains and decentralized finance, or DeFi, is poorly understood by the public at large.

One of the most prominent misconceptions about this space is that crypto is a dark and nefarious playground for bad actors or a haven for criminals. And bad actors, do, of course, exist in crypto — just as they do in any genre of human endeavor.

But crypto has some prominent advocates who see beyond the market fluctuations and negative headlines to a greater purpose for digital assets.

Among those is Garry Kasparov, one of the greatest chess players of all time.

“The argument that [crypto] benefits bad guys occasionally doesn’t fly to me,” Kasparov, who also is a security ambassador for the software firm Avast, says in an interview at the Consensus conference in Austin, Texas. “Humans have a monopoly for evil. How can you stop progress by saying potentially it could be used” for ill? Kasparov asks.

In fact, cryptocurrency, blockchain technology and DeFi are all playing an important role in attempting to make our world a better place, and their potential is only beginning to be tapped.

Here are four examples of how cryptocurrencies, blockchain technology and DeFi are shaping the world for good:

— Funding dissidents and the oppressed.

— Rapid philanthropic fundraising.

— Documenting potential war crimes.

— An expanding pool of charity funds.

Funding Dissidents and the Oppressed

Born in the Soviet Union, Kasparov, who has long been a vocal critic of Russian President Vladimir Putin, explains how he got into cryptocurrency.

“I think it’s very natural … combining my interest in technology and also in individual freedom, as a human rights activist and chairman of the Human Rights Foundation — I couldn’t escape paying attention to the rise of the coins,” Kasparov says.

Kasparov remembers first hearing about cryptocurrency in 2013. He encountered the concept “at one of our Oslo Freedom Forums — this is the signature event of the Human Rights Foundation. We had some members of our group that were big supporters of Bitcoin from the very early days. … I just recognized that it’s the future,” Kasparov says.

He sees cryptocurrency as a tool for individuals to protect themselves against ever-increasing government power. And under oppressive regimes, that means an ability to quietly support dissidents, or even for regular individuals to hold their assets and conduct transactions away from the watchful eyes of Big Brother.

“Right now we have the opportunity for the average person, for people who are oppressed, for people who have no power, to move funds — to actually also escape oppressive regulations,” Kasparov says.

“We see now more and more of the coins — mostly Bitcoin but also other coins — used to support freedom around the world,” he adds.

And it’s not just the oppressive, autocratic and war-torn societies where the chess grandmaster and activist sees benefits. In democratic states, too, he sees virtues of a currency that can’t be manipulated by a government, a point that comes into greater focus with inflation running hot and U.S. debt-to-gross domestic product higher than it was than even in the wake of World War II.

[READ: All 16 Fed Chairs Ranked by Stock Market Performance.]

“Printing money is just the most exquisite form of borrowing without our consent. And I think we’ve reached a point now where we as a public, as individuals, we have to fight back,” Kasparov says.

Rapid Philanthropic Fundraising

Setting cryptocurrencies aside, the world of DeFi also offers exciting opportunities for doing good. A major advantage of DeFi is the absence of bureaucratic red tape that can make traditional methods of organization tedious, cumbersome and time-consuming.

And when an urgent problem arises that requires rapid action to address, being mired in paperwork and legal minutiae can slow down the ability to deliver much-needed help.

“Why should [forming] a company take this two-week, three-week cycle?” asks Sandeep Nailwal, co-founder of Polygon, a popular decentralized Ethereum scaling platform. “It should take five minutes,” Nailwal says in an interview at the Consensus conference.

“And actually that’s what I, in a way, proved in the form of charity — like you know, back in the day when COVID unleashed this big problem in India with the delta wave, I started a simple COVID relief fund,” Nailwal says. The fund is called Crypto Relief.

“I created an address — OK, donate to this — and that actually blew up, that went viral, and one day we were able to collect 3, 4, 5 million dollars, and then I think in one week it was like $10 million and then Vitalik donated that $1 billion [in] Shiba,” Nailwal says, referring to Ethereum co-founder Vitalik Buterin.

This decentralized autonomous organization, or DAO, which Nailwal effortlessly spun up to fight a deadly COVID wave in India, shortly thereafter received about $1.2 billion worth of the Shiba Inu (SHIB) token from Buterin.

The massive transfer caused SHIB to plunge, but the SHIB funds were converted into spendable liquid currency. At the end of the day, after conversions, the fund got more than $470 million in cash and the stablecoin Tether.

The fund’s website, CryptoRelief.in, which aims to keep its activities transparent, shows that more than $57 million has been disbursed through grants. In working with UNICEF, Nailwal says, this organization, which started as a humble online address, has now bought hundreds of millions of syringes and helped to vaccinate a meaningful percentage of India.

“We had a role to play in that,” Nailwal says.

[READ: Will Cryptocurrency Regulation Affect Crypto Prices?]

Documenting Potential War Crimes

In the following example, too, the “trustless” and transparent nature of blockchain technology offers a compelling, positive use case for the tech in the real world.

Jonathan Dotan is the founding director of the Starling Lab and a fellow at Stanford University’s Center for Blockchain Research. Starling Lab is the first academic research center in the world dedicated to exploring how decentralized technology can transform human rights.

The lab, which has been working in Syria to document possible war crimes for years, quickly mobilized to focus on Ukraine after the unprovoked Russian invasion began in February.

During a presentation June 10 at Consensus, Dotan highlighted a school, called School 17, that was struck by the Russian military.

“The evidence of all of this … was covered in Telegram and other online sources. Many of those sources, however, don’t last. They’re ephemeral. They’re taken down for various reasons,” Dotan says.

That’s where blockchain technology, which underlies the new iteration of the internet known as Web3, comes in. “All of this technology is premised on the idea that you can create immutable records, lasting records,” Dotan says.

The Starling Lab is using this feature in a new effort named Project Dokaz aimed at scaling the documentation of what could end up being judged as war crimes in Ukraine. “Dokaz” in Ukrainian means “proof.”

Using a multistep process, Project Dokaz captures and stores the evidence of potential war crimes as it emerges and then uses independent human verification to authenticate it for good measure.

The project uses web capture technology to collect and store information, including metadata, as soon as it’s encountered. This information is authenticated at the source as soon as Project Dokaz investigators come across it — a timestamp is created, and it’s put into an archive along with who did the work and how.

Then the information is encrypted and registered on multiple protocols across what is known as Web3.

“What cryptography can do is it can ensure that over time there’s an audit, so we know this information can remain intact, and every 24 hours we have cryptographic proofs that are publicly attesting to the fact that none of this information has changed,” Dotan says.

Independent verification of this evidence follows, and that too is registered on the chain.

“This effort exists not just with social media, but it also includes looking at websites, other forms of messaging infrastructure, and even cameras and cellphones themselves can be brought into this process to authenticate all of this evidence,” Dotan says.

In a nutshell, Project Dokaz is using blockchain technology to provide an objective, incorruptible and transparent account of wartime atrocities as they unfold in Ukraine. For the historical record, to combat rampant Russian misinformation campaigns, and for justice.

“This morning,” Dotan said, as he paced a conference stage on June 10, “we made a submission to the International Criminal Court that provided them with information around attacks on schools in Kharkiv — all of that process was authenticated with humans and technology. … And as of this morning, it’s now in the hands of prosecutors at the International Criminal Court.”

An Expanding Pool of Charity Funds

Finally, while the emergence of cryptocurrencies has allowed for brand-new philanthropic formats like the one used by Crypto Relief, traditional nonprofits have largely missed out on the opportunity to grow their donor pools through facilitating crypto donations.

Enter The Giving Block, a platform that helps nonprofits accept crypto donations and allows donors to connect with crypto-ready charities.

For donors, The Giving Block encourages charity by emphasizing tax incentives for donations, and it has devised something called the Crypto Giving Pledge — “an ongoing commitment to donate crypto to charitable organizations every year.”

Several organizations and individuals have publicly taken the Crypto Giving Pledge, including crypto exchange FTX, Galaxy Digital CEO Mike Novogratz, former pro skateboarder Tony Hawk and hundreds of others.

While many organizations instantly convert the donated crypto to fiat, receiving crypto donations also gives organizations the option to hold digital assets and have them appreciate over time.

More from U.S. News

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How Cryptocurrency and DeFi Can Do Good in the World originally appeared on usnews.com

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