Humancoin, a proposed blockchain based P2P network, promises to provide a decentralized hub for philanthropists to fund humanitarian projects of their choosing. What is more, the Humancoin token will be used in the e-commerce industry as loyalty tokens, across several forms. This I believe is intended to diversify the use-case of the token.
Primarily, the project will unite funders and fund recipients, on the blockchain, with maximum traceability and transparency.
This project is said to have the potentials of exploring the philanthropy, cryptocurrency, and e-commerce industry, all of which are estimated to be worth over 3.5 trillion USD.
Also, the token is intended to be generated via an incentivization scheme called “proof of charity.” This is a form of mining, which incentivizes all philanthropic gestures done on the network. Benefactors are rewarded with 50% returns on all charity donations, given on the system.
Humancoin’s Value Propositions
While the charity business functions on a non-profit basis, Humancoin hopes to incentivize charitable gestures, through controlled token issuance. This reward system is how Humancoins will be mined/generated.
One of the reasons people are discouraged from giving like they would want to is the poor charity assessment systems, which guide the delivery of these alms. Given this challenge, Humancoins will provide a system where charity funds are seamlessly distributed directly from the benefactors to the wallets of the needy.
Also, on the network, charity projects will be rated by members of the community. This will be a form of “hearsay” charity assessment system, to help guide the prospective funders’ decisions.
Hence, as the community grows across the globe, a benefactor from the UK will have more facts and figures about a non-profit project he intends funding, somewhere in sub-Saharan Africa. This will be from first-hand information delivered by people living in such areas. Also, this makes the need for third-party assessment agencies irrelevant.
What is more, there is the promise of collaboration with big e-commerce companies and crypto exchanges. Such collaboration is to give encouraging discounts to customers with Humancoin tokens. Also, Humancoin will serve as a currency for loyalty programmes. This means… tokens will be liquidated into several loyalty instruments like coupons, air miles, bonuses, points, game skins…
The journey so far
This project started in 2017; the token presale lasted from July 1 — August 15, 2018. Also, the token sale began on September 15 and ended on November 1, 2018.
At the end of its token sales, 6,607,055 USD was raised, which was published in the Humancoin official telegram channel. However, there was an announcement, four days later on the channel, about a refund of all token-sale funds.
The refund is based on claims that “the volatile nature of the crypto market will affect the funds and the intended tokenization scheme.” However, plans are being made by the team to sort for funds through venture capital opportunities.
The Humancoin team
The project is headed by Giles Gailer, with a background in international strategic business development. From what is seen on the team members online portfolio, the team seems to have a healthy variety of industrial experiences, which will come in handy for projects of this nature.
What I think about this project
I do commend the idea of having charity funds and traffic been hosted and tracked on a decentralized network. However, the idea of tokenizing this funds is an unnecessary luxury. Building a sidechain plugin –attached to any of the worthwhile blockchains like Bitcoin– can also, serve as a vehicle for traceable and seamless delivery of digitized funds.
This funds will still be delivered transparently and seamless on a blockchain. All that is needed is a customized interoperable blockchain algorithm.
Could that be the reason for the refund? Well, for all we know it may or may not be.
Also, the idea of a token that will serve as an instrument for loyalty rewards, in the e-commerce industry, is welcoming. However, incentives are only worthwhile when they have an existing value. Considering the intend proof-of-charity mining model of this token, there seem not to be any obvious –market or use-case– relationship between the e-commerce industry and the charity industry. And the use of Humancoin tokens across this two independent markets rubs off awkwardly.
Finally, while the actual reason for the refund is unknown, it is a big red flag considering the initial decentralization paradigm of the project. Also, it raises questions on, whether the team can be trusted. On the contrary, the team took the noble step of giving back a refund to their members.
Until the team comes up with a better solution, regarding the change in plans for tokenization, there isn’t much to be expected. Overall, the Humancoin proposition with a bit of idea tweak and the right strategy could change the charity industry.
Image Source – HumanCoin