The company started a book unalterable accounts based on the blockchain technology to record donations made by over 400 million users Alipay, the online payment service and investments. Donors on their platform of charity “ant Love” will be able to trace the history of transactions and gain a better understanding of where their funds are going and how they are used, says Chen Li, technical director. That makes it more difficult to alter records, and can help restore the confidence that had been lost in recent years.
Chinese charity grew tenfold to 15 billion dollars in the previous decade to 2014, according to Xinhua news agency. But the sector has been plagued by scandals and mismanagement. In a high profile case, the anticorruption group control of the country investigated irregularities in Project Hope. Chinese Red Cross came under scrutiny after a woman who claimed to be affiliated with the organization share online photos of his lavish lifestyle in 2011. The organization has since denied that she had any since.
That’s where Ant wants to go. The project started with a partnership with the China Social Assistance Foundation, as well as a large number of charities are considering joining.
“We hope to bring more transparency to charities and the decentralized nature of the blockchain technology fits well in those purposes,” says Cheng, “it means that all information and transaction history will be safer and will not be as easy to manipulate”
His involvement with charities may be just the first step. Financial Ant joins companies such as Citigroup Inc. and JPMorgan Chase & Co. to experiment with blockchain. The financial institutions are studying how to prepare the so-called “smart contracts” that automatically respond to events. Ledgers can also shore up security by preventing hackers from taking an individual computer to access the network. Beyond charity, Ant Financial is exploring other applications of decentralized books accounts.
The World Economic Forum has identified the blockchain technology as one of six “mega trends” computer that will shape the world in the next decade. It is estimated that assets worth 10 percent of global gross domestic product could be stored in blockchains 2027.
“Ant Financial is smart to start experimenting with the technology blockchain something like charity, which has lower risk.” Haobo said Ma, the founder of Hoopox, a startup that uses blockchain to ensure intellectual property.”It’s very ambitious, the company could start looking at how to apply the technology in other financial areas”
For its initial project, Ant Financial is using a private blockchain, which currently only the company has access. The company plans to open the book of accounts and auditors to charities in the future, according to Cheng.
“It’s great that Ant Financial blockchain are using technology to bring transparency to the murky industry that has been operating as a black box” Chandler said Guo, investor startups digital currency. “The key challenge is whether they have the talent and the right strategy execution.”