If, When and How Blockchain Technologies Can Provide Civic Change

By Stefaan G. Verhulst and Andrew Young

The hype surrounding the potential of blockchain technologies– the distributed ledger technology (DLT) undergirding cryptocurrencies like Bitcoin – to transform the way industries and sectors operate and exchange records is reaching a fever pitch.

Source: Top Trends in the Gartner Hype Cycle for Emerging Technologies, 2017

Governments and civil society have now also joined the quest and are actively exploring the potential of DLTs to create transformative social change. Experiments are underway to leverage blockchain technologies to address major societal challenges – from homelessness in New York City to the Rohyingya crisis in Myanmar to government corruption around the world. At the same time, a growing backlash to the newest ‘shiny object’ in the technology for good space is gaining ground.   

At this year’s The Impacts of Civic Technology Conference (TICTeC), organized by mySociety in Lisbon, the GovLab’s Stefaan Verhulst and Andrew Young joined the Engine Room’s Nicole Anand, the Natural Resource Governance Institute’s Anders Pedersen, and ITS-Rio’s Marco Konopacki to consider whether or not Blockchain can truly deliver on its promise for creating civic change.

For the GovLab’s contribution to the panel, we shared early findings from our Blockchange: Blockchain for Social Change initiative. Blockchange, funded by the Rockefeller Foundation, seeks to develop a deeper understanding of the promise and practice of DLTs tin addressing public problems – with a particular focus on the lack, the role and the establishment of trusted identities – through a set of detailed case-studies. Such insights may help us develop operational guidelines on when blockchain technology may be appropriate and what design principles should guide the future use of DLTs for good.

Our presentation covered four key areas (Full presentation here):

1. The evolving package of attributes present in Blockchain technologies: on-going experimentation, development and investment has lead to the realization that there is no one blockchain technology. Rather there are several variations of attributes that provide for different technological scenarios. Some of these attributes remain foundational -– such as immutability, (guaranteed) integrity, and distributed resilience – while others have evolved as optional including disintermediation, transparency, and accessibility. By focusing on the attributes we can transcend the noise that is emerging from having too many well funded start-ups that seek to pitch their package of attributes as the solution;
2. The three varieties of Blockchain for social change use cases: Most of the pilots and use cases where DLTs are being used to improve society and people’s lives can be categorized along three varieties of applications:

• Track and Trace applications. For instance: 
  1. Versiart creates verifiable, digital certificates for art and collectibles which helps buyers ensure each piece’s provenance.
  2. Grassroots Cooperative along with Heifer USA created a blockchain-powered app that allows every package of chicken marketed and sold by Grassroots to be traced on the Ethereum blockchain.
  3. Everledger works with stakeholders across the diamond supply chain to track diamonds from mine to store.
  4. Ripe is working with Sweetgreen to use blockchain and IoT sensors to track crop growth, yielding higher-quality produce and providing better information for farmers, food distributors, restaurants, and consumers.    
• Smart Contracting applications. For instance:
  1. In Indonesia, Carbon Conservation and Dappbase have created smart contracts that will distribute rewards to villages that can prove the successful reduction of incidences of forest fires.
  2. Alice has built Ethereum-based smart contracts for a donation project that supports 15 homeless people in London. The smart contracts ensure donations are released only when pre-determined project goals are met.
  3. Bext360 utilizes smart contracts to pay coffee farmers fairly and immediately based on a price determined through weighing and analyzing beans by the Bext360 machine at the source.  
• Identity applications. For instance:
  1. The State of Illinois is working with Evernym to digitize birth certificates, thus giving individuals a digital identity from birth.
  2. BanQu creates an economic passport for previously unbanked populations by using blockchain to record economic and financial transactions, purchase goods, and prove their existence in global supply chains.
  3. In 2015, AID:Tech piloted a project working with Syrian refugees in Lebanon to distribute over 500 donor aid cards that were tied to non-forgeable identities.
  4. uPort provides digital identities for residents of Zug, Switzerland to use for governmental services.

3. The promise of trusted Identity: the potential to establish a trusted identity turns out to be foundational for using blockchain technologies for social change. At the same time identity emerges from a process (involving, for instance, provisioning, authentication, administration, authorization and auditing) and it is key to assess at what stage of the ID lifecycle DLTs provide an advantage vis-a-vis other ID technologies; and how the maturity of the blockchain technology toward addressing the ID challenge. 

4. Finally, we seek to translate current findings into

• Operational conditions that can enable the public and civic sector at-large to determine when “to blockchain” including:
  • The need for a clear problem definition (as opposed to certain situations where DLT solutions are in search of a problem);
  • The presence of information asymmetries and high transaction costs incentivize change. (“The Market of Lemons” problem);
  • The availability of (high quality) digital records;
  • The lack of availability of credible and alternative disclosure technologies;
  • Deficiency (or efficiency) of (trusted) intermediaries in the space.
• Design principles that can increase the likelihood of societal benefit when using Blockchain for identity projects (see picture) .

In the coming months, we will continue to share our findings from the Blockchange project in a number of forms – including a series of case studies, additional presentations and infographics, and an operational field guide for designing and implementing Blockchain projects to address challenges across the identity lifecycle.

The GovLab, in collaboration with the National Resource Governance Institute, is also delighted to announce a new initiative aimed at taking stock of the promise, practice and challenge of the use of Blockchain in the extractives sector. The project is focused in particular on DLTs as they relate to beneficial ownership, licensing and contracting transparency, and commodity trading transparency. This fall, we will share a collection of Blockchain for extractives case studies, as well as a report summarizing if, when, and how Blockchain can provide value across the extractives decision chain.

If you are interested in collaborating on our work to increase our understanding of Blockchain’s real potential for social change, or if you have any feedback on this presentation of early findings, please contact blockchange@thegovlab.org.