$42 Billion and a Trustless Donation Platform

Hello developers, let's talk about donations for a minute. Imagine a "hypothetical" world where the top 50% earners around the world donated only but just $1 monthly out of their annual income. Surprisingly, this small gesture could rake in a staggering $42 BILLION - money that could empower small NGOs to bring that "small" change that could bring about transformative change to people's lives across the globe. Yes, in the “hypothetical” world where this happens, there would be enough to meaningfully improve lives, reduce inequality, and address urgent needs. But, how did I come up with that number? Let's do the math together now, shall we?

Who are the top 50% of earners?

You may be thinking, “I’m not exactly wealthy, just an average person.” Well, the statistics would rather say otherwise. You might be surprised to learn that a lot of people do qualify as top earners by global standards. If you earn approximately $23,380 annually, you are already above the bottom half of the global income distribution -- alongside approximately 3.5 Billion others.

This also means that almost half of the world's population is positioned to make a tangible impact on the other bottom half, even with very small contributions.

How did the $42 Billion come about?

Since we have now established some of the facts:

• There are approximately 3.5 BILLION people who are above the bottom half of the global income distribution which makes them 50% of the top earners around the world.
• The top 50% earners on planet earth earn approximately $23,380 annually which can be said to be $1,948 per month.

If each of these 3.5 billion people contributed just $1 per month which by the way is 0.0513% ($1/$1948 = x %100) of their monthly income -- the collective impact would be massive:

3.5 billion people × $1 × 12 months = $42 billion annually

The need for Trustless Donation Platforms

Currently, the charitable landscape is marred by significant trust issues between donors and non-governmental organizations (NGOs). High-profile scandals, like the cases of Oxfam and Kids Company, where funds raised through donations were misused and there were serious ethical breaches. Events like these have led to increased skepticism amongst potential donors, who fear their contributions would not be utilized as intended. According to the report on a study done by the World Economic Forum, trust in NGOs has rapidly declined due to bad perceptions that these organizations have become overly focused on fundraising at the expense of their core missions, further alienating the public they aim to serve.

This rapid decline in trust is also further compounded by a lack of accountability and most importantly transparency in traditional donation methods. Since donors usually feel disconnected from the impact of their contributions they have doubts about whether their contributions are being put to good use. Studies have shown that if there is no transparent and clear information on the operational and performance models of NGOs, the public's confidence in them will reduce which directly impacts their funding and sustainability.

The rise of these challenges further calls for solutions, like -- trustless donation platforms. These are platforms that use blockchain technology to create transparent and immutable records of donations, ensuring that funds are tracked accurately and transparently between donors and NGOs. One such innovative solution is Rootstock, a platform that enhances Bitcoin's capabilities by enabling smart contracts and decentralized applications. By eliminating the need for middle-men and allowing direct oversight through smart contracts, trustless donation platforms built on Rootstock can rebuild confidence among donors.

What is Rootstock?

Rootstock is the first and longest-lasting sidechain for Bitcoin that represents a significant evolution of blockchain technology. Rootstock or RSK integrates Bitcoin's proof-of-work consensus with the dynamic capabilities of smart contracts that were originally popularized by Ethereum. This enhances Bitcoin's functionality and also opens a new world of possibilities for developers.

By introducing smart contract functionality to the Bitcoin network, Rootstock allows developers to create decentralized applications (dApps) that can autonomously execute complex agreements. They were able to achieve this by using a forked version of the Ethereum Virtual Machine (EVM), known as the Rootstock Virtual Machine (RVM). This is great because now developers can leverage existing Ethereum tools and resources, making it easier to build and deploy dApps on Rootstock while also simultaneously leveraging Bitcoin security.

In addition, Rootstock adds a programmable layer to Bitcoin by allowing faster creation times -- approximately every 30 seconds compared to Bitcoin's 10 minutes. Now that block generation is faster the execution of smart contracts has become more efficient enabling a great ecosystem of applications that can now easily interact with Bitcoin's infrastructure. The integration of features like the Powpeg — a trustless bridge that allows for the transfer of Bitcoin to and from Rootstock—further solidifies its role as a critical layer in the broader blockchain landscape.

Designing a Trustless Donation System Architecture

To build or design a system for a trustless donation system we have to bear in mind that the key feature of the system is to foster transparency and accountability in donations. As previously mentioned, as philanthropy evolves, so do the need for solutions that addresses the inherent trust issues between donors and organizations becomes evident.

Multi-signature Wallets

The foundation of this architecture is the use of multi-signature (multi-sig) wallets that require private keys to authorize transactions. This approach ensures that security is enhanced by distributing control among several parties, thereby reducing the risk of fraud or mismanagement of funds. For example, in a 2-of-3 multisig setup, at least two out of three designated signatories must approve any transaction, ensuring that no single individual has unilateral control over the funds. This unique approach not only safeguards assets but also ensures trust among donors who can be assured that their contributions are being managed responsibly.

Smart Contracts

In addition to multisig wallets, smart contracts play a very important role in managing the funds donated. Using solidity, you can design contracts that automate certain aspects of fund distribution, including setting donation limits and setting up voting systems for the distribution of funds. This level of flexibility allows responsiveness to the preferences of the donors, allowing a more democratic approach to how funds are managed. Smart contracts can ensure that certain conditions are met before funds are released to enhance accountability.

Real-time tracking

Another key aspect of this architecture is real-time tracking of funds. Integrating with the RSK block explorer, donors can monitor the flow of their contribution transparently. This is to further enhance transparency and allow donors to hold the NGOs accountable.

Two-way Peg

Finally, the technical security provided by RSK's two-way peg mechanism ensures trustlessness when converting Bitcoin (BTC) to Rootstock Bitcoin (RBTC) and vice versa. This system allows users to transfer their Bitcoin assets to the RSK platform while maintaining the integrity and security of their original holdings. The two-way peg ensures that each BTC on RSK is equivalent to an RBTC, directly reinforcing trust in the conversion process and enabling seamless interactions within the donation ecosystem.

Conclusion: Future Applications and Expansion

The benefits of a trustless platform could extend beyond just technological advancements; they could represent a fundamental shift in how donations are perceived and managed in the charitable sector.

One of the main features or advantages of a trustless platform is its ability to provide security and transparency. By leveraging a range of Bitcoin's security features and Rootstock's smart contract features, donors can be assured that their contributions are safeguarded against fraud and mismanagement.

Looking ahead, there are many ways to expand the platform’s functionality. For example, adding multi-currency support could attract a broader range of donors from different regions, enabling them to contribute using their preferred cryptocurrencies. More so, RSK-based DeFi features could be integrated into the platform to allow for financial products that can allow ending or yield generation from donations.

In summary, the future applications and expansion of a trustless donation platform hold immense promise. By leveraging the power of Rootstock and Bitcoin, we can create a more secure, transparent, and trustworthy environment for charitable giving.

Resources

• Rootstock Built for Bitcoin
• Blockchain for Good
• Sidechain and RSK
• Rootstock Fundamental
• Does Social Trust Influence Charitable Giving for NGOs?
• Why is Trust in NGOs failing – World Economic Forum
• What is Multisig and How does it work
• Smart Bitcoin