Blockchain-based solutions aim to address US disaster relief

Natural disasters in the United States are becoming more prevalent, resulting in increasing costs, a lack of transparency between state and government organizations and a slew of other issues impacting relief systems. 

The Pew Research Center found that the Federal Emergency Management Agency’s (FEMA) public assistance program spent 23% more on natural disasters between 2010–2019 than it did during 2000–2009. Data from Climate.gov further shows that 2021 was the third costliest year in history for natural disasters in the U.S., totaling over $145 billion in damages from 20 weather-related incidents.

But as disasters become more common and costs continue to increase, relief organizations are looking toward digital solutions to help solve certain challenges. For instance, a number of cloud-based solutions from vendors like Dell and Amazon are gaining popularity, falling under the category of Disaster Recovery as a Service, or DRaaS.

A recent report from global technology research company Technavio found that the DRaaS market is expected to grow by $40 billion between 2022–2025. However, Technavio’s findings also suggest that open-source disaster recovery tools will challenge the growth of DRaaS moving forward.

Blockchain to automate disaster relief efforts

This may very well be the case, as a number of blockchain-based solutions are being applied for disaster relief efforts. In particular, many of these solutions can automate manual processes in order to ensure cost-efficiencies, automated workflows and data sharing across organizations. 

For example, the Disaster Services Corporation Society of St. Vincent de Paul (DSC) — a 175-year-old organization that helps people in situational poverty brought on by natural disasters — is partnering with the Algorand Foundation to assist disaster survivors across the United States.

Elizabeth Disco-Shearer, CEO of the DSC, told Cointelegraph that the organization is specifically working with the foundation — the organization behind Algorand’s monetary supply economics, governance and ecosystem — to use digital wallets to reimagine their House in a Box program, which provides household furniture for families without insurance that have been impacted by a disaster.

According to Disco-Shearer, these digital wallets will be equipped with vouchers worth certain amounts of money that disaster survivors will be able to use at specific vendors to purchase new furniture. Disco-Shearer explained that currently DSC’s “House in a Box” program does all of its work on the ground in rented warehouses, where a variety of furniture is purchased and shipped beforehand and then categorized by volunteers based on family size.

“We started this program in 2014, after Hurricane Katrina. Since then, we have served over 100,000 households across America, but it has become more and more labor intensive due to the intensity and frequency of disasters,” Disco-Shearer said.

Using a blockchain wallet will soon make this process entirely digital. “For instance, we may issue a family of four a digital voucher of $3,200 that will immediately appear in their digital wallet. This will be restricted for use at specific vendors that we partner with, where we have already bought furniture in bulk for these types of situations,” Disco-Shearer commented.

Matthew Keller, impact and inclusion lead at the Algorand Foundation, told Cointelegraph that its digital wallet solution for disaster relief efforts will most likely launch in September of this year. He added that Algorand is supplying the resources to build a volunteer’s wallet that will ensure disaster relief volunteers are properly compensated for their time. He said:

“Volunteer wallets will accumulate and track hours, allowing for disaster relief organizations to show state disaster relief agencies funded by FEMA the amount of time volunteers spend helping. This is a huge deal because it allows organizations like St. Vincent de Paul to attract more resources through federal and state levels. This solution will also be used by the National Voluntary Organizations Active in Disaster.”

While blockchain-based digital wallets are proving to be helpful for facilitating fast payments, open-source networks also ensure data sharing between organizations. This feature can be useful when a number of different organizations are involved in the same initiative. For example, openIDL is a Linux Foundation project that uses Hyperledger Fabric to enable insurance carriers, regulators and intermediate agencies to obtain a harmonized, permissioned data model for more efficient reporting following natural disasters. 

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To put this in perspective, Jeff Braswell, executive director of openIDL, told Cointelegraph that every state in the U.S. has its own insurance regulator or commissioner, noting that every insurance carrier that writes policies in a state must report information to each such state regulator.

Braswell explained that the requirement for each insurance company to report to a state regulator individually is time-consuming and costly. In addition, when commercial agencies are contracted to help perform this reporting on behalf of insurance companies, the data is not accessible and cannot be utilized by the industry after submission.

One objective of openIDL, per Braswell, is to ensure that information segregated by carriers or state regulators can be made available in an aggregated and anonymized manner to the industry with appropriate consent and permission. This would allow insurance regulators and carriers to have a better understanding of disasters across different territories and regions. He said:

“This model would enable more efficient insurance reporting by carriers that is, or may be, requested by different state regulators. In turn, this will create a tremendous efficiency in cost-savings, while enabling a better collection of information across different sectors. For insurance regulators, this is also highly desirable and more timely than waiting for an annual report. There are lots of benefits to this model.” 

For instance, Braswell shared that openIDL did a case study with a southern state to better understand how providers might anticipate the adequacy of insurance coverage for regions that were projected to be impacted by hurricanes or incidents occurring in the Gulf Coast. 

“This is about helping providers understand where that coverage may be sufficient and where it may not be, along with how things can be improved based on more timely information,” he said.

Using the Hyperledger Fabric network, Braswell said that a number of insurance providers and state regulators can share information in an open and controlled environment. “No individual policy details need to be revealed, as information can be reported in aggregate, and anonymized using a private, and secure, Hyperledger Fabric permissioned blockchain.”

Such a use case also demonstrates how open-source networks are challenging the notion of DRaaS. Braswell shared that openIDL was initially created based on an idea from the American Association of Insurance Services (AAIS) noting that the organization was seeking digital transformation to provide better services for its clients and state regulators.

After settling on the benefits of a distributed ledger platform, AAIS engaged IBM to develop a proof-of-concept built on top of Hyperledger Fabric. Yet, Braswell noted that AAIS subsequently chose to switch from IBM cloud services to AWS but continued to work with the open-source Hyperledger Fabric project. AAIS then partnered with the Linux Foundation to create the openIDL Foundation project, transitioning the ongoing management and development of the initiative to openIDL. He added:

“Moving this project to the Linux Foundation is helpful because it ensures that organization members are not locked in by a single service vendor or proprietary technology. The oversight of network services and work to grow the collaborative community of the private and public sector participants has now transitioned from AAIS to openIDL, which is tightly coupled with support from the Linux Foundation and Hyperledger.” 

Open and public blockchain networks are also being used by enterprises to improve disaster efforts. For example, Equideum health uses the Ethereum blockchain to transform healthcare and life sciences. Heather Flannery, founder and CEO of Equideum, told Cointelegraph that the company is a spin-off from ConsenSys Health and combines zero-knowledge cryptography with off-chain hybrid blockchain infrastructures. She said:

“My thesis about the needs of the healthcare and life sciences industry has long been that blockchain is necessary, but not sufficient. Our approach has been a convergence of three different emerging technologies, one of which is blockchain. The other two are advanced privacy technologies, both hardware and software dependent modalities to ensure off-chain confidential compute in cloud enclaves. Finally, data decentralization will figure prominently in terms of disaster relief and recovery.”

Flannery mentioned that all of the use cases Equideum enables involve enterprise data to power what she refers to as a Web3 data economy. “The financial exchange of data is a new market architecture to provide ethically sourced data monetization,” she said. 

To put this in perspective, Flannery explained that Equideum is working with U.S. veterans, their families and caregivers to enable privacy-preserving clinical trial matching. Although this differs from emergency disaster situations, Flannery noted this use case is timely given the COVID-19 pandemic. “Right now, pharmaceutical companies need to get new medicines and vaccines into the market, meaning they require research subjects for clinical trials. However, most subjects do not represent the general population,” she pointed out. 

With this challenge in mind, Flannery noted that Equideum’s privacy-preserving clinical trial matching will eventually allow pharmaceutical companies the option to view structured data procurements across the Ethereum network.

“This will be sourced from our enterprise partners and consumer users. The very first thing to happen though will be for big pharma companies to do data procurements from U.S. veterans through the apparatus that we’re creating. This will also give that population access to clinical research as a care option, the ability to monetize their information and so on.” 

Moreover, Flannery remarked that having patient data on a blockchain network can help in various ways when natural disasters occur. “Let’s say a terrible flood brings down a community’s health infrastructure — IT systems go down, along with the ability to identify patients. Web3 means that a person’s basic existence will live in a digital-first society,” she said. According to Flannery, this means that health systems of the future will include an individual’s personal data, along with their ability to control its sharing.

Will businesses actually want to use blockchain solutions?

While different blockchains can provide innovative solutions for disaster relief efforts, it remains questionable if businesses will want to use these networks. For instance, new findings from ReasearchAndMarkets.com suggest that the global blockchain market is expected to reach $117.77 billion by 2028 (currently valued at $4.56 billion), but concerns around uncertain regulations and compliance is one of the major factors that may hinder market growth. 

Yet, Keller noted that regulatory challenges are not an issue as of now for Algorand’s digital wallet solution. Disco-Shearer mentioned that getting disaster survivors and volunteers to use a digital wallet involves a higher degree of learning, which could also create complexities.

In terms of data sharing among enterprises, Braswell explained that one of the intended benefits of openIDL for insurance carriers and analytical services is the ability to mine aggregated and anonymized industry data to inform coverage needs and policy. He added that no raw data from insurance carriers can be extracted or compromised.

“Hyperledger Fabric supports the operation of private and secure ‘channels’ between two parties — in this case a carrier node and an analysis node. If there are 10 carriers, there are 10 private channels created. Data is not shared amongst contributors, but submitted for analysis and reporting purposes to trusted advisory firms who are accredited to join openIDL and perform such services,” he explained.

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And although openIDL is still functioning essentially as a startup, Braswell pointed out that the organization is currently working with five major carriers and several state regulators.

Flannery also stated in a recent “Enterprise Ethereum Alliance Business Readiness Report” that a number of major companies are using Ethereum as a business platform. “There are few if any other layer-1 blockchains out there that have anything like this kind of community. There is no doubt that Ethereum needs upgrading before it is really ready for business on a large scale. But, as we know, this is happening,” she said. 

Finally, it’s notable that cryptocurrency solutions tied to blockchain platforms are being implemented across the world to deliver aid for humanitarian efforts. According to the findings previously mentioned from ResearchAndMarkets.com, the legalization and utilization of cryptocurrencies will push market participants to put in the effort to improve their services in order to acquire a competitive advantage. In turn, more enterprises will likely use blockchain solutions that prove to be beneficial.