29 January 2018
It's hard to ignore what's being said these days about the fortunes being made and lost in "cryptocurrencies".But the real promise of improving life for ordinary people is in blockchain systems that have nothing to do with money.
The U.N. is already working with blockchains to help refugees and the system is cutting maintenance costs. I'm presuming readers already know about blockchains. But if not, I put together a guide here.
The Davos crowd is interested
The Geneva-based World Economic Forum (WEF) and its new Center for the Fourth Industrial Revolution (sited in San Francisco) published Realizing the Potential of Blockchain, by the Canadian father and son team of Don and Alex Tapscott, on 29 June 2017.
When the World Economic Forum issues a "white paper" on an issue you can be sure business has woken up and has taken notice of a new situation in the financial world. There was a whole session on the topic at the current Davos Meeting of WEF.
More than a simple explanation of blockchains and the challenge to conventional financial systems, the 46-page document also includes several proposals on how the system can move safely forward.
Bitcoin's main rival in digital coinage is Ethereum (the system) or ether (its token coin), and the main subject of this article.
Smart Contracts
The unique identifiers in the Ethereum blockchain system can be used to create "smart contracts" that don't need trusted (or expensive) intermediaries such as banks or lawyers to ensure the terms are carried out.
Currently, international cash transfers cost up to 10 percent of their value. Alex Tapscott calls it "the remittance ripoff", since expatriate workers often have to upfront so much of the cash they want to send back home, and payment often takes five days. Blockchain systems can cost almost nothing and deliver transfers almost immediately, when they work as planned.
Helping those without IDs
Management costs for trading internationally are regularly two percent or more, not to speak of spending on legal services, goods monitoring and paperwork all along the trail. And millions of people without paper identity documents, paper title to property or bank accounts could use blockchain technology to indelibly record such details for them.
The Tapscotts declare that with blockchain technology, "we needn't worry about the weak firewalls of the US Democratic National Party, a thieving staffer of Morgan Stanley or a perversely incentivized employee of Wells Fargo". All of these fnancial grabbed the headlines without analysts warning that the economic and political system faces collapse.
Fighting corruption
Richard Samans and Zvika Krieger of the World Economic Forum point out in the Tapscotts' report that, because of the difficulty of fiddling the books, blockchains "could prove to be a broader force for transparency and integrity in society, including in the fight against bribery and corruption."
But don't relax yet. The Tapscotts suggest blockchain "promises to disrupt business models and transform industries".
Delivering aid safely
The World Food Programme (WFP) has already shown how blockchain systems can help deliver aid more securely than any other system.
WFP's blockchain innovation, called 'Building Blocks', got its first successful field test helping 100 people in January 2017 in the heart of Sindh province, Pakistan. As vulnerable families received WFP food and cash assistance, the transactions were authenticated and recorded on a public blockchain through a smartphone. Transaction reports generated were then used to match disbursements against entitlements, the WFP website notes.
Supermarket shopping
In the Azraq refugee camp in Jordan, WFP registered people anonymously on its blockchain, entering their entitlements. It then linked the record to an iris scan of the recipient already being used in the camp.
Refugees could then go to a supermarket within the camp, collect the items they wanted to buy, then pay for them simply by looking into a register-side iris scanner. WFP later paid the supermarket for its entire bill with one transfer.
The project that ended on 31 May recorded and authenticated transfers for about 10,000 people. All funds received were used to purchase food (olive oil, pasta and lentils).
Reduced costs
Blockchain technology, based on the ethereum system, reduced the cost of fees charged by financial intermediaries, reports ETHNews, a cryptocurrency news service. By registering refugees through the blockchain, WFP could also distribute food entitlements securely.
"By doing the blockchain version, we don't have any costs with the banks other than the transfer fee to the supermarket. We're not sharing beneficiary data, and we're not advancing money to anyone," a WFP official told the website fastcompany.
WFP plans to expand its effort to 100,000 people in Jordan, reports the cryptocurrency news website coindesk.
Supporting seven million refugees
Since the start of 2017, the newly appointed special advisor for UN engagement and blockchain technology at the UN's Office for Project Services (UNOPS), Yoshiyuki Yamamoto, has been meeting informally with members of other agencies to imagine what the organization would look like if it was truly united on a blockchain, adds coindesk.
UNOPS established a cross-agency working group on blockchain, bringing in the main emergency agencies, and in April invited blockchain industry members to provide information on the issues involved.
Giving people a 'crypto-passport'
The Office of the Geneva-based United Nations High Commissioner for Refugees (UNHCR) is working with Microsoft and Accenture to give those without identities a fresh start. The digital ID, called United Nations ID2020, aims to facilitate banking and education for those who would otherwise be unable to access such services. Its website points out that 1.1 billion people live without an officially recognized identity.
Accenture's website reports: "The Accenture Platform is the heart of the Biometric Identity Management System currently used by the United Nations High Commissioner for Refugees, which has enrolled more than 1.3 million refugees in 29 countries across Asia, Africa and the Caribbean. The system is expected to support more than 7 million refugees from 75 countries by 2020."
For the past two years, the Finnish Immigration Service has been giving asylum seekers who don't have bank accounts prepaid Mastercards instead of the traditional cash disbursements. Today the programme has several thousand active cardholders, reported Mike Orcutt at technology review on 5 September 2017.
The card is linked to a unique digital identity stored on a blockchain.
Removes major barrier to jobs
Jouko Salonen, director of the Finnish Immigration Service told Orcutt the card account functions like a bank account, removing a major barrier to gaining employment. People can use their accounts to make purchases, pay bills, and even receive direct deposits from employers. The public, virtually incorruptible database enables the Immigration Service to keep track of the cardholders and their spending.
What usually keeps asylum seekers from getting bank accounts and jobs is that they have no strongly authenticated identity. Salonen notes: "We have found a way to solve that."
The Sustainable Development Goals for 2030, endorsed at the United Nations General Assembly in September 2015, include a target of providing a legal identity for all, including birth registration (target 16.9).
U.N. blockchain against child trafficking
On 10 November 2017 the U.N. announced a blockchain project to help stop child trafficking. It estimates nearly 50% of children under five do not have birth certificates. The project will aim to document children born in the world's poorest countries.
The programme will create a digital identity within the blockchain. It will enable tracking of children, even if they are abducted, because the open ledger will be unchangeable and difficult to hack as well as thwarting identity tampering.
The announcement was made at the Humanitarian Blockchain Summit in Fordham University, Lincoln Centre, New York. The partners are the World Identity Network (WIN), the United Nations Office for Project Services (UNOPS) and the United Nations Office of Information and Communications Technology (UN-OICT).
600 million undocumented
WIN observed: "The global estimates for children under the age of 14 [without identify documents] exceed 600 million children worldwide [...] These children are literally 'invisible' to governments or development agencies that design and deliver social programs."
Yoshiyuki Yamamoto, Special Advisor for UN Engagement and Blockchain Technology, underlines: "Child trafficking is one of the worst example of a crime against humanity."
Branson's island was the launch pad
WIN was launched in July 2017 at the Blockchain Summit on Sir Richard Branson's on Necker Island in the British Virgin Islands, wrecked by Hurricane Irma in September. WIN's CEO is Dr Mariana Dahan, formerly of the World Bank, credited as the driving force behind the Identification for Development (ID4D) agenda – a global programme she initiated.
Its partner companies operate on the Ethereum and Bitcoin blockchains. "The company is set to collaborate with the BitFury Group, ConsenSys uPort, IOTA, the Sovrin Foundation and the Secure Identity Alliance members," WIN announced at its launch. Ethereum-based ConsenSys uPort has partnerships with Microsoft and Ubuntu.
Combating climate change
On 22 January 2018 25 organizations announced they had formed a coalition to use blockchains to monitor, report and verify climate change information. Massamba Thioye is leading U.N. Climate Change’s work exploring DTL and blockchain. It already has 32 members.
"Suppose information important to tackling climate change – such as an industry sector’s greenhouse emissions – were continually updated from a multitude of sources and shared in an open and transparent way. Crucial information would be readily available, up-to-date, transparently displayed and reviewed for accuracy," the U.N. announcement said. The organizations agreed on the initiative at a 12 December 2017 meeting in Paris during the One Planet Summit.
This article is an updated version of one I first wrote for the Global Geneva magazine and website, which has several links. If you need some backgrounding on crypto currencies try this.