Can Smart Cities Be Equitable?

Curated on Posted on by Stefaan Verhulst

Homi Kharas and Jaana Remes at Project Syndicate: “Around the world, governments are making cities “smarter” by using data and digital technology to build more efficient and livable urban environments. This makes sense: with urban populations growing and infrastructure under strain, smart cities will be better positioned to manage rapid change.

But as digital systems become more pervasive, there is a danger that inequality will deepen unless local governments recognize that tech-driven solutions are as important to the poor as they are to the affluent.

While offline populations can benefit from applications running in the background of daily life – such as intelligent signals that help with traffic flows – they will not have access to the full range of smart-city programs. With smartphones serving as the primary interface in the modern city, closing the digital divide, and extending access to networks and devices, is a critical first step.

City planners can also deploy technology in ways that make cities more inclusive for the poor, the disabled, the elderly, and other vulnerable people. Examples are already abundant.

In New York City, the Mayor’s Public Engagement Unit uses interagency data platforms to coordinate door-to-door outreachto residents in need of assistance. In California’s Santa Clara County, predictive analytics help prioritize shelter space for the homeless. On the London Underground, an app called Wayfindr uses Bluetooth to help visually impaired travelers navigate the Tube’s twisting pathways and escalators.

And in Kolkata, India, a Dublin-based startup called Addressing the Unaddressedhas used GPS to provide postal addresses for more than 120,000 slum dwellers in 14 informal communities. The goal is to give residents a legal means of obtaining biometric identification cards, essential documentation needed to access government services and register to vote.

But while these innovations are certainly significant, they are only a fraction of what is possible.

Public health is one area where small investments in technology can bring big benefits to marginalized groups. In the developing world, preventable illnesses comprise a disproportionate share of the disease burden. When data are used to identify demographic groups with elevated risk profiles, low-cost mobile-messaging campaigns can transmit vital prevention information. So-called “m-health” interventions on issues like vaccinations, safe sex, and pre- and post-natal care have been shown to improve health outcomes and lower health-care costs.

Another area ripe for innovation is the development of technologies that directly aid the elderly….(More)”.

Mapping Puerto Rico’s Hurricane Migration With Mobile Phone Data

Curated on Posted on by Stefaan Verhulst

Martin Echenique and Luis Melgar at CityLab: “It is well known that the U.S. Census Bureau keeps track of state-to-state migration flows. But that’s not the case with Puerto Rico. Most of the publicly known numbers related to the post-Maria diaspora from the island to the continental U.S. were driven by estimates, and neither state nor federal institutions kept track of how many Puerto Ricans have left (or returned) after the storm ravaged the entire territory last September.

But Teralytics, a New York-based tech company with offices in Zurich and Singapore, has developed a map that reflects exactly how, when, and where Puerto Ricans have moved between August 2017 and February 2018. They did it by tracking data that was harvested from a sample of nearly 500,000 smartphones in partnership with one major undisclosed U.S. cell phone carrier….

The usefulness of this kind of geo-referenced data is clear in disaster relief efforts, especially when it comes to developing accurate emergency planning and determining when and where the affected population is moving.

“Generally speaking, people have their phones with them the entire time. This tells you where people are, where they’re going to, coming from, and movement patterns,” said Steven Bellovin, a computer science professor at Columbia University and former chief technologist for the U.S. Federal Trade Commission. “It could be very useful for disaster-relief efforts.”…(More)”.

Ghost Cities: Built but Never Inhabited

Curated on Posted on by Stefaan Verhulst

Civic Data Design Lab at UrbanNext: “Ghost Cities are vacant neighborhoods and sometimes whole cities that were built but were never inhabited. Their existence is a physical manifestation of Chinese overdevelopment in real estate and the dependence on housing as an investment strategy. Little data exists which establishes the location and extent of these Ghost Cities in China. MIT’s Civic Data Design Lab developed a model using data scraped from Chinese social media sites and Baidu (Chinese Google Maps) to create one of the first maps identifying the locations of Chinese Ghost Cities….

Quantifying the extent and location of Ghost Cities is complicated by the fact that the Chinese government keeps a tight hold on data about sales and occupancy of buildings. Even local planners may have a hard time acquiring it. The Civic Data Design Lab developed a model to identify Ghost Cities based on the idea that amenities (grocery stores, hair salons, restaurants, schools, retail, etc.) are the mark of a healthy community and the lack of amenities might indicate locations where no one lives. Given the lack of openly available data in China, data was scraped from Chinese social media and websites, including Dianping (Chinese Yelp), Amap (Chinese Map Quest), Fang (Chinese Zillow), and Baidu (Chinese Google Maps) using openly accessible Application Programming Interfaces(APIs). 

Using data scraped from social media sites in Chengdu and Shenyang, the model was tested using 300 m x 300 m grid cells marking residential locations. Each grid cell was given an amenity accessibility score based on the distance and clustering of amenities nearby. Residential areas that had a cluster of low scores were marked as Ghost Cities. The results were ground-truthed through site visits documenting the location using aerial photography from drones and interviews with local stakeholders.

The model worked well at documenting under-utilized residential locations in these Chinese cities, picking up everything from vacant housing and stalled construction to abandoned older residential locations, creating the first data set that marks risk in the Chinese real estate market. The research shows that data available through social media can help locate and estimate risk in the Chinese real estate market. Perhaps more importantly, however, identifying where these areas are concentrated can help city planners, developers and local citizens make better investment decisions and address the risk created by these under-utilized developments….(More)”.

Our Infant Information Revolution

Curated on Posted on by Stefaan Verhulst

Joseph Nye at Project Syndicate: “…When people are overwhelmed by the volume of information confronting them, it is hard to know what to focus on. Attention, not information, becomes the scarce resource. The soft power of attraction becomes an even more vital power resource than in the past, but so does the hard, sharp power of information warfare. And as reputation becomes more vital, political struggles over the creation and destruction of credibility multiply. Information that appears to be propaganda may not only be scorned, but may also prove counterproductive if it undermines a country’s reputation for credibility.

During the Iraq War, for example, the treatment of prisoners at Abu Ghraib and Guantanamo Bay in a manner inconsistent with America’s declared values led to perceptions of hypocrisy that could not be reversed by broadcasting images of Muslims living well in America. Similarly, President Donald Trump’s tweets that prove to be demonstrably false undercut American credibility and reduce its soft power.

The effectiveness of public diplomacy is judged by the number of minds changed (as measured by interviews or polls), not dollars spent. It is interesting to note that polls and the Portland index of the Soft Power 30show a decline in American soft power since the beginning of the Trump administration. Tweets can help to set the global agenda, but they do not produce soft power if they are not credible.

Now the rapidly advancing technology of artificial intelligence or machine learning is accelerating all of these processes. Robotic messages are often difficult to detect. But it remains to be seen whether credibility and a compelling narrative can be fully automated….(More)”.

Democracy doomsday prophets are missing this critical shift

Curated on Posted on by Stefaan Verhulst

Bruno Kaufmann and Joe Mathews in the Washington Post: “The new conventional wisdom seems to be that electoral democracy is in decline. But this ignores another widespread trend: direct democracy at the local and regional level is booming, even as disillusion with representative government at the national level grows.

Today, 113 of the world’s 117 democratic countries offer their citizens legally or constitutionally established rights to bring forward a citizens’ initiative, referendum or both. And since 1980, roughly 80 percent of countries worldwide have had at least one nationwide referendum or popular vote on a legislative or constitutional issue.

Of all the nationwide popular votes in the history of the world, more than half have taken place in the past 30 years. As of May 2018, almost 2,000 nationwide popular votes on substantive issues have taken place, with 1,059 in Europe, 191 in Africa, 189 in Asia, 181 in the Americas and 115 in Oceania, based on our research.

That is just at the national level. Other major democracies — Germany, the United States and India — do not permit popular votes on substantive issues nationally but support robust direct democracy at the local and regional levels. The number of local votes on issues has so far defied all attempts to count them — they run into the tens of thousands.

This robust democratization, at least when it comes to direct legislation, provides a context that’s generally missing when doomsday prophets suggest that democracy is dying by pointing to authoritarian-leaning leaders like Turkish President Recep Tayyip Erdogan, Russian President Vladimir Putin, Hungarian Prime Minister Viktor Orbán, Philippine President Rodrigo Duterte and U.S. President Donald Trump.

Indeed, the two trends — the rise of populist authoritarianism in some nations and the rise of local and direct democracy in some areas — are related. Frustration is growing with democratic systems at national levels, and yes, some people become more attracted to populism. But some of that frustration is channeled into positive energy — into making local democracy more democratic and direct.

Cities from Seoul to San Francisco are hungry for new and innovative tools that bring citizens into processes of deliberation that allow the people themselves to make decisions and feel invested in government actions. We’ve seen local governments embrace participatory budgeting, participatory planning, citizens’ juries and a host of experimental digital tools in service of that desired mix of greater public deliberation and more direct public action….(More).”

The GovLab Selected Readings on Blockchain Technologies and the Governance of Extractives

Curated on Posted on by Andrew Young

Curation by Andrew Young, Anders Pedersen, and Stefaan G. Verhulst

Readings developed together with NRGI, within the context of our joint project on Blockchain technologies and the Governance of Extractives. Thanks to Joyce Zhang and Michelle Winowatan for research support.

We need your help! Please share any additional readings on the use of Blockchain Technologies in the Extractives Sector with blockchange@thegovlab.org.  

Introduction

By providing new ways to securely identify individuals and organizations, and record transactions of various types in a distributed manner, blockchain technologies have been heralded as a new tool to address information asymmetries, establish trust and improve governance – particularly around the extraction of oil, gas and other natural resources. At the same time, blockchain technologies are been experimented with to optimize certain parts of the extractives value chain – potentially decreasing transparency and accountability while making governance harder to implement.

Across the expansive and complex extractives sector, blockchain technologies are believed to have particular potential for improving governance in three key areas:  

  • Beneficial ownership and illicit flows screening: The identity of those who benefit, through ownership, from companies that extract natural resources is often hidden – potentially contributing to tax evasion, challenges to global sanction regimes, corruption and money laundering.
  • Land registration, licensing and contracting transparency: To ensure companies extract resources responsibly and comply with rules and fee requirements, effective governance and a process to determine who has the rights to extract natural resources, under what conditions, and who is entitled to the land is essential.
  • Commodity trading and supply chain transparency: The commodity trading sector is facing substantive challenges in assessing and verifying the authenticity of for example oil trades. Costly time is spent by commodity traders reviewing documentation of often poor quality. The expectation of the sector is firstly to eliminate time spent verifying the authenticity of traded goods and secondly to reduce the risk premium on trades. Transactions from resources and commodities trades are often opaque and secretive, allowing for governments and companies to conceal how much money they receive from trading, and leading to corruption and evasion of taxation.

In the below we provide a selection of the nascent but growing literature on Blockchain Technologies and Extractives across six categories:

Selected Readings 

Blockchain Technologies and Extractives – Promise and Current Potential

Adams, Richard, Beth Kewell, Glenn Parry. “Blockchain for Good? Digital Ledger Technology and Sustainable Development Goals.” Handbook of Sustainability and Social Science Research. October 27, 2017.

  • This chapter in the Handbook of Sustainability and Social Science Research seeks to reflect and explore the different ways Blockchain for Good (B4G) projects can provide social and environmental benefits under the UN’s Sustainable Goals framework
  • The authors describe the main categories in which blockchain can achieve social impact: mining/consensus algorithms that reward good behavior, benefits linked to currency use in the form of “colored coins,” innovations in supply chain, innovations in government, enabling the sharing economy, and fostering financial inclusion.
  • The chapter concludes that with B4G there is also inevitably “Blockchain for Bad.” There is already critique and failures of DLTs such as the DAO, and more research must be done to identify whether DLTs can provide a more decentralized, egalitarian society, or if they will ultimately be another tool for control and surveillance by organizations and government.

Cullinane, Bernadette, and Randy Wilson. “Transforming the Oil and Gas Industry through Blockchain.” Official Journal of the Australian Institute of Energy News, p 9-10, December 2017.

  • In this article, Cullinane and Wilson explore blockchain’s application in the oil and gas industry “presents a particularly compelling opportunity…due to the high transactional values, associated risks and relentless pressure to reduce costs.”
  • The authors elaborate four areas where blockchain can benefit play a role in transforming the oil and gas industry:
    • Supply chain management
    • Smart contracts
    • Record management
    • Cross-border payments

Da Silva, Filipe M., and Ankita Jaitly. “Blockchain in Natural Resources: Hedging Against Volatile Prices.” Tata Consultancy Services Ltd., 2018.

  • The authors of this white paper assess the readiness of natural resources industries for blockchain technology application, identify areas where blockchain can add value, and outline a strategic plan for its adoption.
  • In particular, they highlight the potential for blockchain in the oil and gas industry to simplify payments, where for example, gas can be delivered directly to consumer homes using a blockchain smart contracting application.

Halford-Thompson, Guy. “Powered by Blockchain: Reinventing Information Management in the Energy Space.” BTL, May 12, 2017.

  • According to Halford-Thompson, “oil and gas companies are exploring blockchain’s promise to revamp inefficient internal processes and achieve significant reductions in operating costs through the automation of record keeping and messaging, the digitization of the supply chain information flow, and the elimination of reconciliation, among many other data management use cases.”
  • The data reconciliation process, for one, is complex and can require significant time for completion. Blockchain technology could not only remove the need for some steps in the information reconciliation process, but also eliminate the need for reconciliation altogether in some instances.

Blockchain Technologies and the Governance of Extractives

(See also: Selected Readings of Blockchain Technologies and its Potential to Transform Governance)

Koeppen, Mark, David Shrier, and Morgan Bazilian. “Is Blockchain’s Future in Oil and Gas Transformative Or Transient?“ Deloitte, 2017.

  • In this report, the authors propose four areas that blockchain can improve for the oil and gas industry, which are:
    • Transparency and compliance: Employment of blockchain is predicted to significantly reduce cost related to compliance, since it securely makes information available to all parties involved in the supply chain.
    • Cyber threats and security: The industry faces constant digital security threat and blockchain provides a solution to address this issue.
    • Mid-volume trading/third party impacts: They argue that the “boundaries between asset classes will blur as cash, energy products and other commodities, from industrial components to apples could all become digital assets trading interoperably.”
    • Smart contract: Since the “sheer size and volume of contracts and transactions to execute capital projects in oil and gas have historically caused significant reconciliation and tracking issues among contractors, sub-contractors, and suppliers,” blockchain-enabled smart contracts could improve the process by executing automatically after all requirements are met, and boosting contract efficiency and protecting each party from volatile pricing.

Mawet, Pierre, and Michael Insogna. “Unlocking the Potential of Blockchain in Oil and Gas Supply Chains.” Accenture Energy Blog, November 21, 2016.

  • The authors propose three ways blockchain technology can boost productivity and efficiency in oil and gas industry:
    • “Greater process efficiency. Smart contracts, for example, can be held in a blockchain transaction with party compliance confirmed through follow-on transactions, reducing third-party supervision and paper-based contracting, thus helping reduce cost and overhead.”
    • “Compliance. Visibility is essential to improve supply chain performance. The immutable record of transactions can aid in product traceability and asset tracking.”
    • “Data transfer from IoT sensors. Blockchain could be used to track the unique history of a device, with the distributed ledger recording data transfer from multiple sensors. Data security in devices could be safeguarded by unique blockchain characteristics.”

Som, Indranil. “Blockchain: Radically Changing the Mining Paradigm.” Digitalist, September 27, 2017.

  • In this article, Som proposes three ways that the blockchain technology can “support leaner organizations and increased security” in the mining industry: improving cybersecurity, increasing transparency through smart contracts, and providing visibility into the supply chain.

Identity: Beneficial Ownership and Illicit Flows

(See also: Selected Readings on Blockchain Technologies and Identity).

de Jong, Julia, Alexander Meyer, and Jeffrey Owens. “Using blockchain for transparent beneficial ownership registers.“ International Tax Review, June 2017.

  • This paper discusses the features of blockchain and distributed ledger technology that can improve collection and distribution of information on beneficial ownership.
  • The FATF and OECD Global Forum regimes have identified a number of common problems related to beneficial ownership information across all jurisdictions, including:
    • “Insufficient accuracy and accessibility of company identification and ownership information;
    • Less rigorous implementation of customer due-diligence (CDD) measures by key gatekeepers such as lawyers, accountants, and trust and company service providers; and
    • Obstacles to information sharing such as data protection and privacy laws, which impede competent authorities from receiving timely access to adequate, accurate and up-to-date information on basic legal and beneficial ownership.”
  • The authors argue that the transparency, immutability, and security offered by blockchain makes it ideally suited for record-keeping, particularly with regards to the ownership of assets. Thus, blockchain can address many of the shortcomings in the current system as identified by the FATF and the OECD.
  • They go on to suggest that a global registry of beneficial ownership using blockchain technology would offer the following benefits:
    • Ensuring real-time accuracy and verification of ownership information
    • Increasing security and control over sensitive personal and commercial information
    • Enhancing audit transparency
    • Creating the potential for globally-linked registries
    • Reducing corruption and fraud, and increasing trust
    • Reducing compliance burden for regulate entities

Herian, Robert. “Trusteeship in a Post-Trust World: Property, Trusts Law and the Blockchain.” The Open University, 2016.

  • This working paper discusses the often overlooked topic of trusteeship and trusts law and the implications of blockchain technology in the space. 
  • “Smart trusts” on the blockchain will distribute trusteeship across a network and, in theory, remove the need for continuous human intervention in trust fund investments thus resolving key issues around accountability and the potential for any breach of trust.
  • Smart trusts can also increase efficiency and security of transactions, which could improve the overall performance of the investment strategy, thereby creating higher returns for beneficiaries.

Karsten, Jack and Darrell M. West (2018): “Venezuela’s “petro” undermines other cryptocurrencies – and international sanctions.” Brookings, Friday, March 9 2018,

  • This article discusses the Venezuelan government’s cryptocurrency, “petro,” which was launched as a solution to the country’s economic crisis and near-worthless currency, “bolívar”
  • Unlike the volatility of other cryptocurrencies such as Bitcoin and Litecoin, one petro’s price is pegged to the price of one barrel of Venezuelan oil – roughly $60
  • And rather than decentralizing control like most blockchain applications, the petro is subject to arbitrary discount factor adjustment, fluctuating oil prices, and a corrupt government known for manipulating its currency
  • The authors warn the petro will not stabilize the Venezuelan economy since only foreign investors funded the presale, yet (from the White Paper) only Venezuelan citizens can use the cryptocurrency to pay taxes, fees, and other expenses. Rather, they argue, the petro represents an attempt to create foreign capital out of “thin air,” which is not subject to traditional economic sanctions.  

Land Registration, Licensing and Contracting Transparency

Michael Graglia and Christopher Mellon. “Blockchain and Property in 2018: At the End of the Beginning.” 2018 World Bank Conference on Land and Poverty, March 19-23, 2018.

  • This paper claims “blockchain makes sense for real estate” because real estate transactions depend on a number of relationships, processes, and intermediaries that must reconcile all transactions and documents for an action to occur. Blockchain and smart contracts can reduce the time and cost of transactions while ensuring secure and transparent record-keeping systems.
  • The ease, efficiency, and security of transactions can also create an “international market for small real estate” in which individuals who cannot afford an entire plot of land can invest small amounts and receive their portion of rental payments automatically through smart contracts.
  • The authors describe seven prerequisites that land registries must fulfill before blockchain can be introduced successfully: accurate data, digitized records, an identity solution, multi-sig wallets, a private or hybrid blockchain, connectivity and a tech aware population, and a trained professional community
  • To achieve the goal of an efficient and secure property registry, the authors propose an 8-level progressive framework through which registries slowly integrate blockchain due to legal complexity of land administration, resulting inertia of existing processes, and high implementation costs.  
    • Level 0 – No Integration
    • Level 1 – Blockchain Recording
    • Level 2 – Smart Workflow
    • Level 3 – Smart Escrow
    • Level 4 – Blockchain Registry
    • Level 5 – Disaggregated Rights
    • Level 6 – Fractional Rights
    • Level 7 – Peer-to-Peer Transactions
    • Level 8 – Interoperability

Thomas, Rod. “Blockchain’s Incompatibility for Use as a Land Registry: Issues of Definition, Feasibility and Risk.“ European Property Law Journal, vol. 6, no. 3, May 2017.

  • Thomas argues that blockchain, as it is currently understood and defined, is unsuited for the transfer of real property rights because it fails to address the need for independent verification and control.
  • Under a blockchain-based system, coin holders would be in complete control of the recordation of the title interests of their land, and thus, it would be unlikely that they would report competing or contested claims.
  • Since land remains in the public domain, the risk of third party possessory title claims are likely to occur; and over time, these risks will only increase exponentially.
  • A blockchain-based land title represents interlinking and sequential transactions over many hundreds, if not thousands, of years, so given the misinformation that would compound over time, it would be difficult to trust the current title holder has a correctly recorded title
  • The author concludes that supporters of blockchain for land registries frequently overlook a registry’s primary function to provide an independent verification of the provenance of stored data.

Vos, Jacob, Christiaan Lemmen, and Bert Beentjes. “Blockchain-Based Land Registry: Panacea, Illusion or Something In Between?“ 2017 World Bank Conference on Land and Poverty, March 20-24, 2017.

  • The authors propose that blockchain is best suited for the following steps in land administration:
    • The issuance of titles
    • The archiving of transactions – specifically in countries that do not have a reliable electronic system of transfer of ownership
  • The step in between issuing titles and archiving transactions is the most complex – the registration of the transaction. This step includes complex relationships between the “triple” of land administration: rights (right in rem and/or personal rights), object (spatial unit), and subject (title holder). For the most part, this step is done manually by registrars, and it is questionable whether blockchain technology, in the form of smart contracts, will be able to process these complex transactions.
  • The authors conclude that one should not underestimate the complexity of the legal system related to land administration. The standardization of processes may be the threshold to success of blockchain-based land administration. The authors suggest instead of seeking to eliminate one party from the process, technologists should cooperate with legal and geodetic professionals to create a system of checks and balances to successfully implement blockchain for land administration.  
  • This paper also outlines five blockchain-based land administration projects launched in Ghana, Honduras, Sweden, Georgia, and Cook County, Illinois.

Commodity Trading and Supply Chain Transparency

Ahmed, Shabir. “Leveraging Blockchain to Revolutionise the Mining Industry.” SAP News, February 27, 2018.

  • In this article, Ahmed identifies seven key use cases for blockchain in the mining industry:
    • Automation of ore acquisition and transfer;
    • Automatic registration of mineral rights and IP;
    • Visibility of ore inventory at ports;
    • Automatic cargo hire process;
    • Process and secure large amounts of IoT data;
    • Reconciling amount produced and sent for processing;
    • Automatically execute procurement and other contracts.

Brooks, Michael. “Blockchain and the Fight Against Illicit Financial Flows.” The Policy Corner, February 19, 2018.

  • In this article, Brooks argues that, “Because of the inherent decentralization and immutability of data within blockchains, it offers a unique opportunity to bypass traditional tracking and transparency initiatives that require strong central governance and low levels of corruption. It could, to a significant extent, bypass the persistent issues of authority and corruption by democratizing information around data consensus, rather than official channels and occasional studies based off limited and often manipulated information. Within the framework of a coherent policy initiative that integrates all relevant stakeholders (states, transnational organizations, businesses, NGOs, other monitors and oversight bodies), a international supply chains supported by blockchain would decrease the ease with which resources can be hidden, numbers altered, and trade misinvoiced.”

“Conflict Free Natural Resources.” Global Opportunity Report 2017. Global Opportunity Network, 2017.

  • In this entry from the Global Opportunity Report, and specifically toward the end of ensuring conflict-free natural resources, Blockchain is labeled as “well-suited for tracking objects and transactions, making it possible for virtually anything of value to be traced. This opportunity is about creating transparency and product traceability in supply chains.

“Blockchain for Traceability in Minerals and Metals Supply Chains: Opportunities and Challenges.” RCS Global and ICMM, 2017.

  • This report is based on insights generated during the Materials Stewardship Round Table on the potential of BCTs for tracking and tracing metals and minerals supply chains, which subsequently informed an RCS Global research initiative on the topic.
  • Insight into two key areas is increasingly desired by downstream manufacturing companies from upstream producers of metals and minerals: provenance and production methods
  • In particular, the report offers five key potential advantages of using Blockchain for mineral and metal supply chain activities:
    • “Builds consensus and trust around responsible production standards between downstream and upstream companies.
    • The immutability of and decentralized control over a blockchain system minimizes the risk of fraud.
    • Defined datasets can be made accessible in real time to any third party, including downstream buyers, auditors, investors, etc. but at the same time encrypted so as to share a proof of fact rather than confidential information.
    • A blockchain system can be easily scaled to include other producers and supply chains beyond those initially involved.
    • Cost reduction due to the paperless nature of a blockchain-enabled CoC [Chain of Custody] system, the potential reduction of audits, and reduction in transaction costs.”

Van Bockstael, Steve. “The emergence of conflict-free, ethical, and Fair Trade mineral supply chain certification systems: A brief introduction.” The Extractives Industries and Society, vol. 5, issue 1, January 2018.

  • This introduction to a special section considers the emerging field of “‘conflict-free’, ‘fair’ and ‘transparently sourced and traded’ minerals” in global industry supply chains.
  • Van Bockstael describes three areas of practice aimed at increasing supply chain transparency:
    • “Initiatives that explicitly try to sever the links between mining or minerals trading and armed conflict of the funding thereof.”
    • “Initiatives, limited in number yet growing, that are explicitly linked to the internationally recognized ‘Fair Trade’ movement and whose aim it is to source artisanally mined minerals for the Western jewellry industry.”
    • “Initiatives that aim to provide consumers or consumer-facing industries with more ethical, transparent and fair supply chains (often using those concepts in fuzzy and interchangeable ways) that are not linked to the established Fair Trade movement” – including, among others, initiatives using Blockchain technology “to create tamper-proof supply chains.”

Global Governance, Standards and Disclosure Practices

Lafarre, Anne and Christoph Van der Elst. “Blockchain Technology for Corporate Governance and Shareholder Activism.” European Corporate Governance Institute (ECGI) – Law Working Paper No. 390/2018, March 8, 2018.

  • This working paper focuses on the potential benefits of leveraging Blockchain during functions involving shareholder and company decision making. Lafarre and Van der Elst argue that “Blockchain technology can lower shareholder voting costs and the organization costs for companies substantially. Moreover, blockchain technology can increase the speed of decision-making, facilitate fast and efficient involvement of shareholders.”
  • The authors argue that in the field of corporate governance, Blockchain offers two important elements: “transparency – via the verifiable way of recording transactions – and trust – via the immutability of these transactions.”
  • Smart contracting, in particular, is seen as a potential avenue for facilitating the ‘agency relationship’ between board members and the shareholders they represent in corporate decision-making processes.

Myung, San Jun. “Blockchain government – a next for of infrastructure for the twenty-first century.” Journal of Open Innovation: Technology, Market, and Complexity, December 2018.

  • This paper argues the idea that Blockchain represents a new form of infrastructure that, given its core consensus mechanism, could replace existing social apparatuses including bureaucracy.
  • Indeed, Myung argues that blockchain and bureaucracy share a number of attributes:
    • “First, both of them are defined by the rules and execute predetermined rules.
    • Second, both of them work as information processing machines for society.
    • Third, both of them work as trust machines for society.”  
  • The piece concludes with five principles for replacing bureaucracy with blockchain for social organization: “1) introducing Blockchain Statute law; 2) transparent disclosure of data and source code; 3) implementing autonomous executing administration; 4) building a governance system based on direct democracy; and 5) making Distributed Autonomous Government (DAG).  

Peters, Gareth and Vishnia, Guy (2016): “Blockchain Architectures for Electronic Exchange Reporting Requirements: EMIR, Dodd Frank, MiFID I/II, MiFIR, REMIT, Reg NMS and T2S.” University College London, August 31, 2016.

  • This paper offers a solution based on blockchain architectures to the regulations of financial exchanges around the world for trade processing and reporting for execution and clearing. In particular, the authors give a detailed overview of EMIR, Dodd Frank, MiFID I/II, MiFIR, REMIT, Reg NMS and T2S.
  • The authors suggest the increasing amount of data from transaction reporting start to be incorporated on a blockchain ledger in order to harness the built-in security and immutability features of the blockchain to support key regulatory features.
  • Specifically, the authors suggest 1) a permissioned blockchain controlled by a regulator or a consortium of market participants for the maintenance of identity data from market participants and 2) blockchain frameworks such as Enigma to be used to facilitate required transparency and reporting aspects related to identities when performing pre- and post-trade reporting as well as for auditing.

“Blockchain Technology and Competition Policy – Issues paper by the Secretariat,” OECD, June 8, 2018.

  • This OECD issues paper poses two key questions about how blockchain technology might increase the relevance of new disclosures practices:
    • “Should competition agencies be given permission to access blockchains? This might enable them to monitor trading prices in real-time, spot suspicious trends, and, when investigating a merger, conduct or market have immediate access to the necessary data without needing to impose burdensome information requests on parties.”
    • “Similarly, easy access to the information on a blockchain for a firm’s owners and head offices would potentially improve the effectiveness of its oversight on its own subsidiaries and foreign holdings. Competition agencies may assume such oversight already exists, but by making it easier and cheaper, a blockchain might make it more effective, which might allow for more effective centralised compliance programmes.”

Michael Pisa and Matt Juden. “Blockchain and Economic Development: Hype vs. Reality.” Center for Global Development Policy Paper, 2017.

  • In this Center for Global Development Policy Paper, the authors examine blockchain’s potential to address four major development challenges: (1) facilitating faster and cheaper international payments, (2) providing a secure digital infrastructure for verifying identity, (3) securing property rights, and (4) making aid disbursement more secure and transparent.
  • The authors conclude that while blockchain may be well suited for certain use cases, the majority of constraints in blockchain-based projects fall outside the scope of technology. Common constraints such as data collection and privacy, governance, and operational resiliency must be addressed before blockchain can be successfully implemented as a solution.

Industry-Specific Case Studies

Chohan, Usman. “Blockchain and the Extractive Industries: Cobalt Case Study,” University of New South Wales, Canberra Discussion Paper Series: Notes on the 21st Century, 2018.

  • In this discussion paper, the author studies the pilot use of blockchain in cobalt mining industry in the Democratic Republic of Congo (DRC). The project tracked the movement of cobalt from artisanal mines through its installation in devices such as smartphones and electric cars.
  • The project records cobalt attributes – weights, dates, times, images, etc. – into the digital ledger to help ensure that cobalt purchases are not contributing to forced child labor or conflict minerals. 

Chohan, Usman. “Blockchain and the Extractive Industries #2: Diamonds Case Study,” University of New South Wales, Canberra Discussion Paper Series: Notes on the 21st Century, 2018.

  • The second case study from Chohan investigates the application of blockchain technology in the extractive industry by studying Anglo-American (AAL) diamond DeBeer’s unit and Everledger’s blockchain projects. 
  • In this study, the author finds that AAL uses blockchain to track gems (carat, color, certificate numbers), starting from extraction and onwards, including when the gems change hands in trade transaction.
  • Like the cobalt pilot, the AAL initiative aims to help avoid supporting conflicts and forced labor, and to improve trading accountability and transparency more generally.

The promise and peril of military applications of artificial intelligence

Curated on Posted on by Stefaan Verhulst

Michael C. Horowitz at the Bulletin of the Atomic Scientists: “Artificial intelligence (AI) is having a moment in the national security space. While the public may still equate the notion of artificial intelligence in the military context with the humanoid robots of the Terminatorfranchise, there has been a significant growth in discussions about the national security consequences of artificial intelligence. These discussions span academia, business, and governments, from Oxford philosopher Nick Bostrom’s concern about the existential risk to humanity posed by artificial intelligence to Tesla founder Elon Musk’s concern that artificial intelligence could trigger World War III to Vladimir Putin’s statement that leadership in AI will be essential to global power in the 21st century.

What does this really mean, especially when you move beyond the rhetoric of revolutionary change and think about the real world consequences of potential applications of artificial intelligence to militaries? Artificial intelligence is not a weapon. Instead, artificial intelligence, from a military perspective, is an enabler, much like electricity and the combustion engine. Thus, the effect of artificial intelligence on military power and international conflict will depend on particular applications of AI for militaries and policymakers. What follows are key issues for thinking about the military consequences of artificial intelligence, including principles for evaluating what artificial intelligence “is” and how it compares to technological changes in the past, what militaries might use artificial intelligence for, potential limitations to the use of artificial intelligence, and then the impact of AI military applications for international politics.

The potential promise of AI—including its ability to improve the speed and accuracy of everything from logistics to battlefield planning and to help improve human decision-making—is driving militaries around the world to accelerate their research into and development of AI applications. For the US military, AI offers a new avenue to sustain its military superiority while potentially reducing costs and risk to US soldiers. For others, especially Russia and China, AI offers something potentially even more valuable—the ability to disrupt US military superiority. National competition in AI leadership is as much or more an issue of economic competition and leadership than anything else, but the potential military impact is also clear. There is significant uncertainty about the pace and trajectory of artificial intelligence research, which means it is always possible that the promise of AI will turn into more hype than reality. Moreover, safety and reliability concerns could limit the ways that militaries choose to employ AI…(More)”,

Israeli, French Politicians Endorse Blockchain for Governance Transparency

Curated on Posted on by Stefaan Verhulst

Komfie Manolo at Cryptovest: “Blockchain is moving into the world’s political systems, with several influential political figures in Israel and France recently emerging as new believers in the technology. They are betting on blockchain for more transparent governance and have joined the decentralized platform developed by Coalichain.

Among the seven Israeli politicians to endorse the platform are former deputy minister and interior minister Eli Yishay, deputy defense minister Eli Ben-Dan, and HaBait HaYehudi leader Shulamit Mualem-Refaeli. The move for a more accountable democracy has also been supported by Frederic Lefebvre, the founder of French political party Agir.

Levi Samama, co-founder and CEO of Coalichain, said that support for the platform was “a positive indication that politicians are actively seeking ways to be transparent and direct in the way they communicate with the public. In order to impact existing governance mechanisms we need the support and engagement of politicians and citizens alike.”

Acceptance of blockchain is gaining traction in the world of politics.

During last month’s presidential election in Russia, blockchain was used by state-run public opinion research center VTSIOM to track exit polls.

In the US, budding political group Indie Party wants to redefine the country’s political environment by providing an alternative to the established two-party system with a political marketplace that uses blockchain and cryptocurrency….(More)”

If, When and How Blockchain Technologies Can Provide Civic Change

Curated on Posted on by admin

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.

Gartner Hype Cycle

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;Attributes of DLT
  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.

Three Blockchange applications

  1. 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. 

ID Lifecycle and DLT

  1. 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) .

Design Principles

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.

 

The world’s first neighbourhood built “from the internet up”

Curated on Posted on by Stefaan Verhulst

The Economist: “Quayside, an area of flood-prone land stretching for 12 acres (4.8 hectares) on Toronto’s eastern waterfront, is home to a vast, pothole-filled parking lot, low-slung buildings and huge soyabean silos—a crumbling vestige of the area’s bygone days as an industrial port. Many consider it an eyesore but for Sidewalk Labs, an “urban innovation” subsidiary of Google’s parent company, Alphabet, it is an ideal location for the world’s “first neighbourhood built from the internet up”.

Sidewalk Labs is working in partnership with Waterfront Toronto, an agency representing the federal, provincial and municipal governments that is responsible for developing the area, on a $50m project to overhaul Quayside. It aims to make it a “platform” for testing how emerging technologies might ameliorate urban problems such as pollution, traffic jams and a lack of affordable housing. Its innovations could be rolled out across an 800-acre expanse of the waterfront—an area as large as Venice.

Sidewalk Labs is planning pilot projects across Toronto this summer to test some of the technologies it hopes to employ at Quayside; this is partly to reassure residents. If its detailed plan is approved later this year (by Waterfront Toronto and also by various city authorities), it could start work at Quayside in 2020.

That proposal contains ideas ranging from the familiar to the revolutionary. There will be robots delivering packages and hauling away rubbish via underground tunnels; a thermal energy grid that does not rely on fossil fuels; modular buildings that can shift from residential to retail use; adaptive traffic lights; and snow-melting sidewalks. Private cars are banned; a fleet of self-driving shuttles and robotaxis would roam freely. Google’s Canadian headquarters would relocate there.

Undergirding Quayside would be a “digital layer” with sensors tracking, monitoring and capturing everything from how park benches are used to levels of noise to water use by lavatories. Sidewalk Labs says that collecting, aggregating and analysing such volumes of data will make Quayside efficient, liveable and sustainable. Data would also be fed into a public platform through which residents could, for example, allow maintenance staff into their homes while they are at work.

Similar “smart city” projects, such as Masdar in the United Arab Emirates or South Korea’s Songdo, have spawned lots of hype but are not seen as big successes. Many experience delays because of shifting political and financial winds, or because those overseeing their construction fail to engage locals in the design of communities, says Deland Chan, an expert on smart cities at Stanford University. Dan Doctoroff, the head of Sidewalk Labs, who was deputy to Michael Bloomberg when the latter was mayor of New York City, says that most projects flop because they fail to cross what he terms “the urbanist-technologist divide”.

That divide, between tech types and city-planning specialists, will also need to be bridged before Sidewalk Labs can stick a shovel in the soggy ground at Quayside. Critics of the project worry that in a quest to become a global tech hub, Toronto’s politicians may give it too much freedom. Sidewalk Labs’s proposal notes that the project needs “substantial forbearances from existing [city] laws and regulations”….(More)”.