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Devex: New initiative aims to deliver on the promise of blockchain for identity

See original post at Devex.

Over the weekend, during a blockchain summit organized on Virgin Group founder Sir Richard Branson’s Necker Island, the World Identity Network was launched. The new initiative aims to leverage distributed ledger technology, better known as blockchain, to catalyze progress toward universal identification. And while the launch may have taken place at a luxury private island, the aim is to benefit the 2 billion people living without recognized identification documents.

“The use cases of blockchain and distributed ledger technologies are diverse, with stronger value-add in developing countries,” Mariana Dahan, a former World Bank official and driving force behind the Identification for Development agenda who will lead the World Identity Network initiative, told Devex. “Blockchain’s disintermediating potential is being tried out for land property titles, finance for small and medium-sized enterprises, e-governance, voting, and the big one, digital identity. Much of this has the potential to leapfrog billions of people into a new era — in parallel to the way that mobile phones helped them leapfrog over landlines.”

After her return from Necker Island, Dahan explained to Devex that while currency changes are the most widely known use case for blockchain technology, the topics discussed at the blockchain summit extended to global development.

Blockchain is often conflated with bitcoin, the digital currency. But simply put: it is an unchangeable system of recordkeeping that is seeing a growing use well beyond financial transactions. Data is copied on multiple servers or computers and encrypted into blocks, which are then linked by hashes to previous blocks. This allows the system to reject any non-valid transactions. On a public blockchain, the data that is stored can be seen and verified by all parties, and because they know the data is unchangeable and verified by the system, they can transact directly and securely with a trusted system, replacing third-party intermediaries without the parties needing to trust each other.

When it comes to blockchain, you either believe in it, have some doubts, or don't quite get it. Watch this DevExplains video to learn more blockchain, the virtual currency bitcoin and their potential role in global development efforts.

"The international community has yet to fully explore blockchain technology,” Grete Faremo, executive director at the United Nations Office for Project Services, said in a release about WIN. “Quite simply the potential is immense — more transparency and greater efficiency could deliver real benefits to billions of people. So at UNOPS we are proud to support global initiatives like WIN aiming to bring these benefits to countries across the world, to improve the lives of individuals, families and communities."    

At Azraq camp in Jordan, 10,000 Syrian refugees can now purchase their food through a pilot powered by blockchain that allows the U.N. World Food Programme to make assistance disbursements faster, cheaper, more traceable and more secure.

“Blockchain technology allows us to step up the fight against hunger,” said WFP’s Director of Innovation and Change Management Robert Opp. “Through blockchain, we aim to cut payment costs, better protect beneficiary data, control financial risks, and respond more rapidly in the wake of emergencies. Using blockchain can be a qualitative leap — not only for WFP, but for the entire humanitarian community.”

Building Blocks is a blockchain-based system that was developed within the WFP Innovation Accelerator in Munich, Germany. Blockchain now authenticates and records transactions by refugees in encrypted virtual wallets instead of WFP maintained bank accounts, which reduces transaction fees, making each assistance dollar go further. Depending on the results of the pilot, which began with an idea from a WFP staffer who formerly worked at WFP headquarters in Rome, WFP may look at expanding the use of blockchain technology to other areas, including supply chain operations and identity management.

 This example from WFP points to just one way this method of organizing data — which some say is the next big thing or but others say it is overhyped — is already making an impact on international development and humanitarian response. Experts told Devex that what makes blockchain so disruptive is the way the distributed ledger, a network of data held and updated by individuals in a large network, establishes trust in transactions in general. And nongovernmental organizations in the development and humanitarian sector can either disrupt or be disrupted as blockchain moves out of its nascent stage.

“DLT’s ability to remove the need for entrenched third-party intermediaries has huge disruptive potential,” reads a Mercy Corps report on distributed ledger technology. “To the extent that international NGOs function as guarantors of trust — trust that the funds donated will be used for an appropriate purpose, trust that the aid has been given to the right beneficiaries, trust that the development work that was contracted for was done on time and as specified — then NGOs too are poised for disruption.”

“The early days of the internet, it wasn’t really ready for prime time. Never did we envisage that we would be using the internet the way we are. I think we’re down in that level of the early days of what blockchain can be, and it means investigating, being aware and being cognizant, looking at the cases that are being used very carefully,” Monique Morrow, president and co-founder of the Humanized Internet, told Devex at South by Southwest, the technology conference in Austin, Texas.

According to the United Nations, one out of five people lacks a legal identity. With the Humanized Internet, Morrow wants to store those identities on blockchain, in the form of distributed digital lockboxes. At a recent gathering of venture capitalists convened by the International Finance Corporation at the World Bank, she asked the audience to consider how they have birth certificates and university degrees in paper whereas refugees might move across borders without ways to prove who they are.

Next to her on the same panel was Kathryn Harrison, who leads blockchain efforts at IBM, a technology company with labs in Kenya and South Africa engaged in projects and exploring opportunities for blockchain.

“Blockchain provides the immutable record of how various assets — whether they be people, good or services — move through economy,” she said. “From our perspective, it’s critical that you have a very collaborative approach to technology and business. It needs to be a whole new way of doing software development collaboration as we look to transform how some of these global industries operate.”

IBM executives are working with Walmart to apply blockchain to food safety. In what has become one of the largest practical tests of blockchain beyond bitcoin to date, IBM and Walmart have worked together on pilots transporting pork and mangoes from emerging markets. Tracking those products from the farmers through to the stores is beneficial not just for the consumers but for the farmers themselves, said Harrison.

The benefit that blockchain can provide to farmers is also what brought together Frans Tjallingii of Global Data Chain, which develops blockchain applications for supply chains, together with Scott Tupper, who runs Onda Origins. They met at the Global Specialty Coffee Expo in Seattle, Washington, in April. When Tjallingii heard about Tupper’s work to help coffee consumers purchase from the coffee growers who stand out for their socially and environmentally responsible choices, he explained the benefits of blockchain for traceability in the coffee industry.

“Blockchain could become a hugely empowering tool for people further down the supply chain because it takes a lot of the paper-based complexity out of the transaction,” Tjallingii said, explaining that eventually it could make financial transactions easier than PayPal and supply chain logistics more efficient than UPS. “We’re not there yet, and especially in developing countries it will take longer to do, but even considering those complexities, moving away from paper-based data will avoid data being lost as it moves from the grower to the cooperative to the exporter.”  

Over the weekend, while Bitfury Group hosted the blockchain summit on Necker Island, developers, entrepreneurs and others came together at Moringa School in Nairobi, Kenya, to discuss how blockchain technologies can be integrated into various aspects of business. In Napa, Morrow mentioned Kenya as one example of a country that is taking a hard look at the benefits of blockchain. Kenya is also home to one of two IBM lab locations in Africa, both of which are exploring opportunities for blockchain.

“We are currently in discussions with NGOs and government agencies particularly around the cold supply chain for health care-related supplies such as blood, medical devices and vaccinations,” Christopher Sciacca of IBM Research told Devex. “Blockchain can be used to verify if a medical device, such as an HIV or malaria test has been counterfeited or tampered with, for example. Also, using the IoT and blockchain we can make sure the vaccinations didn't move to a location which is either risky or which could damage the test due to temperature. At this point it’s about educating public officials and industry in Africa on the value and to make sure they understand the difference between blockchain with bitcoin.”

He said the areas where he sees blockchain having the greatest impact include reducing the cost of transferring paper documents, promoting government transparency — on everything from property transactions to elections — and providing students with school information services such as student ID cards to provide them with services available only to them.

The World Economic Forum estimates that as more of the global GDP is stored on blockchain — perhaps as much as 10 percent by 2027 — the benefits to emerging markets will include better property records and increased financial inclusion. Blockchain might also help solve two of the problems that keep so many people out of the formal economy: that recordkeeping systems in many developing countries are unreliable and that people are reluctant to provide information about themselves because they do not trust how it will be used. But for Dahan, it is the digital identity enabled by blockchain that has the most dramatic potential to change lives.

“If blockchain technology can be used to secure robust, self-sovereign digital identities around personal data, there's a real possibility that people in places with poor registries and rule of law can exercise their rights,” she said. “This technology, if implemented correctly, would allow them to assert who they are and access proof of their digital identity, anytime and anywhere.”

The key constraints to blockchain moving forward will extend beyond the scope of technology, reads a report released by the Center for Global Development earlier this month.

“For blockchain-based solutions to reach their full potential in this space, governments and development organizations first need to take steps that they have often resisted in the past,” reads the report. “The good news is that excitement about the technology has already generated more interest (and investment) by some of these organizations in addressing these underlying challenges.”

The World Identity Network is just the latest example of partners coming together to deliver on the promise of blockchain, and experts told Devex they hope that more of the global development community will see the potential of this technology and work with other parties to ensure this technology benefits the many versus the few.