How to Use Blockchain for International Development

Blockchain for International Development

Blockchain is at the peak of inflated expectations. Since last year’s Tech Salon on Bitcoin, the hype cycle has eclipsed cryptocurrencies to focus the underlying distributed ledger technology. Just look at who is putting blockchain front and center:

The decentralized digital ledger technology, originally a little understood aspect of Bitcoin, is now finding serious utility in dozens of non-financial applications. It’s at operational capacity in Estonia and Georgia, and other nations are taking notice. Prototypes abound, even in the ICT4D space.

Our November 2017 Technology Salon on blockchain for development, “How to Bring Blockchain to Your Programs?“, including comments from:

The top takeaways from our conversation reflect a cautious approach.

Everything is still in a proof of concept stage, by design.

“We don’t know all the questions to ask,” is a great reason as to why even larger institutions are limited to blockchain in a lab setting.  Giving these projects the space to fail fast and iterate is crucial in these early stages.

Why blockchain over another technology?

This is a necessary question in performing true, due diligence in justifying blockchain against platforms and systems around far longer, but it might not be entirely the right question.  Yes, there are prototype applications  built exclusively on a blockchain.

With existing platforms or processes, thinking about blockchain as an “augmentative” technology rather than a purely disruptive one might help not scare people off.  “Does blockchain have a place in our current architecture?” might be a better approach.

The biggest hurdles are regulations and standards.

Technical implementation is not to be underestimated, realizing one is establishing a network over installing a database, especially with fewer developers with the necessary skills available.

But if this technology is aimed to be truly interoperable with existing solutions and need on the group, consensus on how things are collected and shared.  Fortunately group like the World Bank’s ID4D program for digital identities are well underway working on broader standards to draw from.

“No intermediaries” is a myth.

It’s increasingly lauded that blockchain will allow for direct agreement between two parties via smart contracts without the required, third-party intermediary such as banks or lawyers.  While DLT will undoubtedly disrupt these and other fields, we’re speaking about just contract execution, not the formulation and review.

Moreover, as these parties are pushed more toward the fringe, as it was noted at our event: “Without an intermediary, it could be hard for people to accept having no party to hold responsible for problems that occur.  Without that, you are left with nothing or the gov’t would always have to step in.”

Ethics.

We’re still very much in the what-can-we-do honeymoon of blockchain, not yet addressing the should.  Consider the role a lack of connectivity plays.

This might not raise an immediate red flag given Microsoft and IBM have blockchain-as-a-service products already, but should the host government be a “full node” in our network?  Will they appreciate sovereign state data co-located to other countries?  What about KYC issues?

As members of USAID consider blockchain pursuits, it is encouraging that alongside the technical and social evaluations is considering The Principles for Digital Development.

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