Rohingya turn to blockchain to solve identity crisis

Curated on Posted on by Stefaan Verhulst

Skot Thayer and Alex Hern at the Guardian: “Rohingya refugees are turning to blockchain-type technology to help address one of their most existential threats: lack of officially-recognised identity.

Denied citizenship in their home country of Myanmar for decades, the Muslim minority was the target of a brutal campaign of violence by the military which culminated a year ago this week. A “clearance operation” led by Buddhist militia sent more than 700,000 Rohingya pouring over the border into Bangladesh, without passports or official ID.

The Myanmar government has since agreed to take the Rohingya back, but are refusing to grant them citizenship. Many Rohingya do not want to return and face life without a home or an identity. This growing crisis prompted Muhammad Noor and his team at the Rohingya Project to try to find a digital solution.

“Why does a centralised entity like a bank or government own my identity,” says Noor, a Rohingya community leader based in Kuala Lumpur. “Who are they to say if I am who I am?”

Using blockchain-based technology, Noor, is trialling the use of digital identity cards that aim to help Rohingya in Malaysia, Bangladesh and Saudi Arabia access services such as banking and education. The hope is that successful trials might lead to a system that can help the community across southeast Asia.

Under the scheme, a blockchain database is used to record individual digital IDs, which can then be issued to people once they have taken a test to verify that they are genuine Rohingya….

Blockchain-based initiatives, such as the Rohingya Project, could eventually allow people to build the network of relationships necessary to participate in the modern global economy and prevent second and third generation “invisible” people from slipping into poverty. It could also allow refugees to send money across borders, bypassing high transaction fees.

In Jordan’s Azraq refugee camp, the United Nations World Food Programme (WFP) is using blockchain and biometrics to help Syrian refugees to purchase groceries using a voucher system. This use of the technology allows the WFP to bypass bank fees.

But Al Rjula says privacy is still an issue. “The technology is maturing, yet implementation by startups and emerging tech companies is still lacking,” he says.

The involvement of a trendy technology such as blockchains can often be enough to secure the funding, attention and support that start-ups – whether for-profit or charitable – need to thrive. But companies such as Tykn still have to tackle plenty of the same issues as their old-fashioned database-using counterparts, from convincing governments and NGOs to use their services in the first place to working out how to make enough overhead to pay staff, while also dealing with the fickle issues of building on a cutting-edge platform.

Blockchain-based humanitarian initiatives will also need to reckon with the problem of accountability in their efforts to aid refugees and those trapped in the limbo of statelessness.

Dilek Genc, a PhD candidate at the University of Edinburgh who studies blockchain-type applications in humanitarian aid and development, saysif the aid community continues to push innovation using Silicon Valley’s creed of “fail fast and often,” and experiment on vulnerable peoples they will be fundamentally at odds with humanitarian principles and fail to address the political roots of issues facing refugees…(More)”.

China’s Aggressive Surveillance Technology Will Spread Beyond Its Borders

Curated on Posted on by Stefaan Verhulst

Daniel Benaim and Hollie Russon Gilman at Slate: “…What happens when these technologies migrate to bigger, more fractious societies? This won’t happen overnight—and the financial and logistical obstacles to broad implementation are significant. But there is every reason to think that in a decade or two, if not sooner, authoritarians and would-be strongmen in places like Turkey, Hungary, Egypt, or Rwanda will seek these tools and use them to thwart civil society and crush dissent in ways that weaken democracy globally.

Already there are reports that Zimbabwe, for example, is turning to Chinese firms to implement nationwide facial-recognition and surveillance programs, wrapped into China’s infrastructure investments and a larger set of security agreements as well, including for policing online communication. The acquisition of black African faces will help China’s tech sector improve its overall data set.

Malaysia, too, announced new partnerships this spring with China to equip police with wearable facial-recognition cameras. There are quiet reports of Arab Gulf countries turning to China not just for the drone technologies America has denied but also for the authoritarian suite of surveillance, recognition, and data tools perfected in China’s provinces. In a recent article on Egypt’s military-led efforts to build a new capital city beyond Cairo’s chaos and revolutionary squares, a retired general acting as project spokesman declared, “a smart city means a safe city, with cameras and sensors everywhere. There will be a command center to control the entire city.” Who is financing construction? China.

While many governments are making attempts to secure this information, there have been several alarming stories of data leaks. Moreover, these national identifiers create an unprecedented opportunity for state surveillance at scale. What about collecting biometric information in nondemocratic regimes? In 2016, the personal details of nearly 50 million people in Turkey were leaked….

China and other determined authoritarian states may prove undeterrable in their zeal to adopt repressive technologies. A more realistic goal, as Georgetown University scholar Nicholas Wright has argued, is to sway countries on the fence by pointing out the reputational costs of repression and supporting those who are advocating for civil liberties in this domain within their own countries. Democracy promoters (which we hope will one day again include the White House) will also want to recognize the coming changes to the authoritarian public sphere. They can start now in helping vulnerable populations and civil society to gain greater technological literacy to advocate for their rights in new domains. It is not too early for governments and civil society groups alike to study what technological and tactical countermeasures exist to circumvent and disrupt new authoritarian tools.

Seven years ago, techno-optimists expressed hope that a wave of new digital tools for social networking and self-expression could help young people in the Middle East and elsewhere to find their voices. Today, a new wave of Chinese-led technological advances threatens to blossom into what we consider an “Arab spring in reverse”—in which the next digital wave shifts the pendulum back, enabling state domination and repression at a staggering scale and algorithmic effectiveness.

Americans are absolutely right to be urgently focused on countering Russian weaponized hacking and leaking as its primary beneficiary sits in the Oval Office. But we also need to be more proactive in countering the tools of algorithmic authoritarianism that will shape the worldwide future of individual freedom….(More)”.

Humans are a post-truth species

Curated on Posted on by Stefaan Verhulst

Yuval Noah Harari at the Guardian: “….A cursory look at history reveals that propaganda and disinformation are nothing new, and even the habit of denying entire nations and creating fake countries has a long pedigree. In 1931 the Japanese army staged mock attacks on itself to justify its invasion of China, and then created the fake country of Manchukuo to legitimise its conquests. China itself has long denied that Tibet ever existed as an independent country. British settlement in Australia was justified by the legal doctrine of terra nullius (“nobody’s land”), which effectively erased 50,000 years of Aboriginal history. In the early 20th century, a favourite Zionist slogan spoke of the return of “a people without a land [the Jews] to a land without a people [Palestine]”. The existence of the local Arab population was conveniently ignored.

In 1969 Israeli prime minister Golda Meir famously said that there is no Palestinian people and never was. Such views are very common in Israel even today, despite decades of armed conflicts against something that doesn’t exist. For example, in February 2016 MP Anat Berko gave a speech in the Israeli parliament in which she doubted the reality and history of the Palestinian people. Her proof? The letter “p” does not even exist in Arabic, so how can there be a Palestinian people? (In Arabic, “F” stands for “P”, and the Arabic name for Palestine is Falastin.)

In fact, humans have always lived in the age of post-truth. Homo sapiens is a post-truth species, whose power depends on creating and believing fictions. Ever since the stone age, self-reinforcing myths have served to unite human collectives. Indeed, Homo sapiensconquered this planet thanks above all to the unique human ability to create and spread fictions. We are the only mammals that can cooperate with numerous strangers because only we can invent fictional stories, spread them around, and convince millions of others to believe in them. As long as everybody believes in the same fictions, we all obey the same laws, and can thereby cooperate effectively.

So if you blame Facebook, Trump or Putin for ushering in a new and frightening era of post-truth, remind yourself that centuries ago millions of Christians locked themselves inside a self-reinforcing mythological bubble, never daring to question the factual veracity of the Bible, while millions of Muslims put their unquestioning faith in the Qur’an. For millennia, much of what passed for “news” and “facts” in human social networks were stories about miracles, angels, demons and witches, with bold reporters giving live coverage straight from the deepest pits of the underworld. We have zero scientific evidence that Eve was tempted by the serpent, that the souls of all infidels burn in hell after they die, or that the creator of the universe doesn’t like it when a Brahmin marries an Untouchable – yet billions of people have believed in these stories for thousands of years. Some fake news lasts for ever.

I am aware that many people might be upset by my equating religion with fake news, but that’s exactly the point. When a thousand people believe some made-up story for one month, that’s fake news. When a billion people believe it for a thousand years, that’s a religion, and we are admonished not to call it fake news in order not to hurt the feelings of the faithful (or incur their wrath). Note, however, that I am not denying the effectiveness or potential benevolence of religion. Just the opposite. For better or worse, fiction is among the most effective tools in humanity’s toolkit. By bringing people together, religious creeds make large-scale human cooperation possible. They inspire people to build hospitals, schools and bridges in addition to armies and prisons. Adam and Eve never existed, but Chartres Cathedral is still beautiful. Much of the Bible may be fictional, but it can still bring joy to billions and encourage humans to be compassionate, courageous and creative – just like other great works of fiction, such as Don Quixote, War and Peace and Harry Potter….(More)”.

Democracy Is a Habit: Practice It

Curated on Posted on by Stefaan Verhulst

Melvin Rogers at the Boston Review: “After decades of triumph,” The Economist recently concluded, “democracy is losing ground.” But not, apparently, in the West, whose “mature democracies . . . are not yet in serious danger.” On this view, reports of the death of American democracy have been greatly exaggerated. “Donald Trump may scorn liberal norms,” the reasoning goes, “but America’s checks and balances are strong, and will outlast him.” The truly endangered societies are those where “institutions are weaker and democratic habits less ingrained.”

It has become a common refrain, even among those critical of Trump’s administration. “Our democracy is hard to kill,” Harvard political scientist Steven Levitsky said in an interview about his new book with Daniel Zeblatt, How Democracies Die. “We do still have very strong democratic institutions. We’re not Turkey, we’re not Hungary, we’re not Venezuela. We can behave quite recklessly and irresponsibly and probably still muddle through that.”

Is democracy in the United States really so robust? At the outset of World War II, American philosopher John Dewey cautioned against so easy a conclusion—and the simplistic picture of democratic society that it presumes. In Freedom and Culture (1939), he worried that democracy might succumb to the illusion of stability and endurance in the face of threats to liberty and norms of decency. According to Dewey, we must not believe

that democratic conditions automatically maintain themselves, or that they can be identified with fulfillment of prescriptions laid down in a constitution. Beliefs of this sort merely divert attention from what is going on, just as the patter of the prestidigitator enables him to do things that are not noticed by those whom he is engaged in fooling. For what is actually going on may be the formation of conditions that are hostile to any kind of democratic liberties.

Dewey’s was a warning to be wary not just of bad governance but of a more fundamental deformation of society. “This would be too trite to repeat,” he admits, “were it not that so many persons in the high places of business talk as if they believed or could get others to believe that the observance of formulae that have become ritualistic are effective safeguards of our democratic heritage.”…

Dewey may seem like an odd resource to recall in our current political climate. For if we stand in what Hannah Arendt once called “dark times,” Dewey’s optimistic faith in democracy—his unflinching belief in the reflective capacity of human beings to secure the good and avert the bad, and in the progressive character of American democracy—may look ill-equipped to address our current crisis.

Yet this faith was always shaped by an important insight regarding democracy that many seem to have ignored. For Dewey, democracy’s survival depends on a set of habits and dispositions—in short, a culture—to sustain it. …

“The democratic road is the hard one to take,” Dewey concluded in Freedom and Culture. “It is the road which places the greatest burden of responsibility on the greatest number of human beings.” Precisely for this reason, Dewey believed the culture of democracy—the habits and sensibilities of the citizenry—in greater need of scrutiny than its constitution and procedures. For what are constitutions and procedures once you have deformed the ground upon which their proper functioning depends?…(More)”.

What Democracy Needs Now

Curated on Posted on by Stefaan Verhulst

The RSA Chief Executive’s Lecture 2018 by Matthew Taylor: “In 1989 with the fall of the Berlin Wall still echoing, Francis Fukuyama prophesied the global triumph of liberal democracy and the end of history. Thirty years on it is not history in jeopardy but liberal democracy itself.

China – the rising global power – is thriving with a system which combines economic freedom with political autocracy. There is the growth of what Yascha Mounk calls illiberal democracies – countries with notionally free elections but without the liberal foundations of accountability, civil liberties and cultural openness. The issue with nations like Russia, Hungary and Turkey, and with those exhibiting a backlash against liberalism like America and Italy, is not just how they operate but the tendency for populism – when given the excuse or opportunity – to drift towards authoritarianism.

While the alternatives to the liberal democratic system grow more confident the citizens living in those systems become more restless. Politicians and political institutions in countries are viewed with dismay and contempt. We don’t like them, we don’t trust them, we don’t think they can solve the problems that most matter to us. The evidence, particularly from the US, is starting to suggest that disillusionment with politics is now becoming indifference towards democracy itself.

Will liberal democracy come back into fashion – is this a cycle or is it a trend? Behind the global patterns each country is different, but think of what is driving anger and disillusionment in our own.

Living standards flat-lining for longer than at any time since the industrial revolution. A decade of austerity leaving our public services threadbare and in a mode of continual crisis management. From social care to gangs, from cybercrime to mental health, how many of us think Government is facing up to the problems let alone developing solutions?

Inequality, having risen precipitously in the 1980s, remains stubbornly high, fuelling anger about elites and making not just the economic divide but all divisions worse.

Social media – where increasingly people get their information and engage in political discourse – has the seemingly in-built tendency to confirm prejudice and polarise opinion.

The great intertwined forces shaping the future – globalisation, unprecedented corporate power, technological change – continue to reinforce a sense in people, places and nations that they have no agency. Yet the hunger to take back control which started as tragedy is rapidly becoming a farce.

If this is the warm climate in which disillusionment has taken root and grown it shows few signs of cooling.

For all its many failings, I have always believed that over the long term liberal democracy would carry on making lives better for most people most of the time. As a progressive my guiding star is what Roberto Unger has called ‘the larger life for all’. But for the first time, I view the future with more fear than hope.

There are those who disparage pessimism. To them the backlash against liberalism, the signs of a declining faith in democracy, are passing responses to failure and misfortune. Populism will give the system the wake-up call it needs. In time a new generation of leaders will renew the system. Populism need neither be extreme nor beget authoritarianism – look at Macron.

This underestimates the dangers that face us. It is too reminiscent of those who believed, until the results came in, that the British people would not take the risk of Brexit or that the Americans would reject the madness of Trump. It underestimates too how the turn against liberal democracy in one country can beget it in another. Paradoxically, today nationalists seem more able to collaborate with each other than countries ostensibly committed to internationalism. Chaos spreads more quickly than order. Global treaties and institutions take years to agree, they can breakdown overnight.

Of course, liberal democracy has failed over and again to live up to its own promise. But the fact that things need to change doesn’t mean they can’t get a whole lot worse.

We are also in danger of underestimating the coherence and confidence of liberalism’s critics. Last month Hungarian Prime Minister Victor Orban made a powerful speech defending his brand of nationalist populism and boasting of his growing alliances across Europe. He appealed to the continent’s centre-right to recognise that it has more in common with conservative nationalism than the EU’s liberal establishment. There are aspects of Orban’s analysis which have an understandable appeal to the mainstream, but remember this is also a man who is unashamedly hostile to Islam, contemptuous of humanitarianism, and who is playing fast and loose with democratic safeguards in his own country.

We may disagree about how malign or dangerous are figures like Orban or Erdogan, or Trump or Salvini, but surely we can agree that those who want to defend the open, pluralistic, inclusive values of liberal democracy must try to make a better case for what we believe?

In part this involves defending the record of liberal societies in improving lives, creating opportunities and keeping the peace, at least between themselves. But it also means facing up to what is going wrong and what must change.

Complex problems are rarely addressed with a single solution. To ever again achieve the remarkable and unprecedented economic and social advances of the three decades after the Second World War, liberal democracy needs profound renewal. But change must start some place. This evening I want to argue that place should be the way we do democracy itself…(More) (Video)”.

Tribal World: Group Identity Is All

Curated on Posted on by Stefaan Verhulst

Amy Chua in Foreign Affairs: “Humans, like other primates, are tribal animals. We need to belong to groups, which is why we love clubs and teams. Once people connect with a group, their identities can become powerfully bound to it. They will seek to benefit members of their group even when they gain nothing personally. They will penalize outsiders, seemingly gratuitously. They will sacrifice, and even kill and die, for their group.

This may seem like common sense. And yet the power of tribalism rarely factors into high-level discussions of politics and international affairs, especially in the United States. In seeking to explain global politics, U.S. analysts and policymakers usually focus on the role of ideology and economics and tend to see nation-states as the most important units of organization. In doing so, they underestimate the role that group identification plays in shaping human behavior. They also overlook the fact that, in many places, the identities that matter most—the ones people will lay down their lives for—are not national but ethnic, regional, religious, sectarian, or clan-based. A recurring failure to grasp this truth has contributed to some of the worst debacles of U.S. foreign policy in the past 50 years: most obviously in Afghanistan and Iraq, but also in Vietnam.

This blindness to the power of tribalism affects not only how Americans see the rest of the world but also how they understand their own society….(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)”.

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.

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.