Blockchain: Can we talk about impact yet?

by Shailee Adinolfi, John Burg and Tara Vassefi

In September 2018, a three-member team of international development professionals presented a session called “Blockchain Learning Agenda: Practical MERL Workshop” at MERL Tech DC. Following the session, the team published a blog post about the session stating that the authors had “… found no documentation or evidence of the results blockchain was purported to have achieved in these claims [of radical improvements]. [They] also did not find lessons learned or practical insights, as are available for other technologies in development.”

The blog post inspired a barrage of unanticipated discussion online. Unfortunately, in some cases readers (and re-posters) misinterpreted the point as disparaging of blockchain. Rather, the post authors were simply asserting ways to cope with uncertain situations related to piloting blockchain projects. Perhaps the most important outcome of the session and post, however, is that they motivated a coordinated response from several organizations who wanted to delve deeper into the blockchain learning agenda.

To do that, on March 5, 2019, Chemonics, Truepic, and Consensys hosted a roundtable titled “How to Successfully Apply Blockchain in International Development.” All three organizations are applying blockchain in different and complementary ways relevant to international development — including project monitoring, evaluation, learning (MEL) innovations as well as back-end business systems. The roundtable enabled an open dialogue about how blockchain is being tested and leveraged to achieve better international development outcomes. The aim was to explore and engage with real case studies of blockchain in development and share lessons learned within a community of development practitioners in order to reduce the level of opacity surrounding this innovative and rapidly evolving technology.

Three case studies were highlighted:

1. “One-click Biodata Solution” by Chemonics 

• Chemonics’ Blockchain for Development Solutions Lab designed and implemented a RegTech solution for the USAID foreign assistance and contracting space that sought to leverage the blockchain-based identity platform created by BanQu to dramatically expedite and streamline the collection and verification of USAID biographical data sheets (biodatas), improve personal data protection, and reduce incidents of error and fraud in the hiring process for professionals and consultants hired under USAID contracts.
• Chemonics processes several thousand biodatas per year and accordingly devotes significant labor effort and cost to support the current paper-based workflow.
• Chemonics’ technology partner, BanQu, used a private, permissioned blockchain on the Ethereum network to pilot a biodata solution.
• Chemonics successfully piloted the solution with BanQu, resulting in 8 blockchain-based biodatas being fully processed in compliance with donor requirements.
• Improved data protection was a priority for the pilot. One goal of the solution was to make it possible for individuals to maintain control over their back-up documentation, like passports, diplomas, and salary information, which could be shared temporarily with Chemonics through the use of an encrypted key, rather than having documentation emailed and saved to less secure corporate digital file systems.
• Following the pilot, Chemonics determined through qualitative feedback that users across the biodata ecosystem found the blockchain solution to be easy to use and succeeded at reducing level of effort on the biodata completion process. 
• Chemonics also compiled lessons-learned, including refinements to the technical requirements, options to scale the solution, and additional user feedback and concerns about the technology to inform decision-making around further biodata pilots. 

2. Project i2i presented by Consensys

• Problem Statement: 35% of the Filipino population is unbanked, and 56% lives in rural areas. The Philippines economy relies heavily on domestic remittances. Unionbank sought to partner with hundreds of rural banks that didn’t have access to electronic banking services that the larger commercial banks do.
• In 2017, to continue the Central Bank of the Philippines’ national strategy for financial inclusion, the central banks of Singapore and the Philippines announced that they would collaborate on financial technology by employing the regulatory sandbox approach. This will provide industry stakeholders with the room and time to experiment before regulators enact potentially restrictive policies that could stifle innovation and growth. As part of the agreement, the central banks will share resources, best practices, research, and collaborate to “elevate financial innovation” in both economies.
• Solution design assumptions for Philippines context:
  • It can be easily operated and implemented with limited integration, even in low-tech settings;
  • It enables lower transaction time and lower transaction cost;
  • It enables more efficient operations for rural banks, including reduction of reconciliations and simplification of accounting processes.
• Unionbank worked with ConsenSys and participating rural banks to create an interbank ledger with tokenization. The payment platform is private, Ethereum-based.
• In the initial pilot, 20 steps were eliminated in the process.
• Technology partners: ConsenSys, Azure (Microsoft), Kaleido, Amazon Web Services.
• In follow up to the i2i project, Union bank partnered with Singapore-based OCBC Bank, wherein the parties deployed the Adhara liquidity management and international payments platform for a blockchain-based international remittance pilot.  
• Potential for national and regional collaboration/network development.
• For details on the i2i project, download the full case study here, watch the 4-minute video clip.

3. Controlled Capture presented by Truepic

• Truepic is a technology company specializing in digital image and video authentication. Truepic’s Controlled Capture technology uses cutting-edge computer vision, AI, and cryptography technologies to test images and video for signs of manipulation, designating only those that pass its rigorous verification tests are authenticated. Through the public blockchain, Truepic creates an immutable record for each photo and video captured through this process, such that their authenticity can be proven, meeting the highest evidentiary standards. This technology has been used in over 100 countries by citizen journalists, activists, international development organizations, NGOs, insurance companies, lenders and online platforms. 
• One of Truepic’s innovative strategic partners, the UN Capital Development Fund (another participant of the roundtable), has been testing the possibility of using this technology for monitoring and evaluation of development projects. For example, the following Truepic tracks the date, time, and geolocation of the latest progress of a factory in Uganda. 
• Controlled Capture requires Wifi or at least 3G/4G connectivity to fully authenticate images/video and write them to the public blockchain, which can be a challenge in low connectivity instances, for example in least-developed countries for UNCDF. 
• As a work around to connectivity issues, Truepic’s partners have used Satellite Internet connections – such as a Thuraya or Iridium device to successfully capture verified images anywhere. 
• Public blockchain – Truepic is currently using two different public blockchains, testing cost versus time in an effort to continually shorten the time from capture to closing chain of custody (currently around 8-12 seconds). 
• Cost – The blockchain component is not actually too expensive; the heaviest investment is in the computer vision technology used to authenticate the images/video, for example to detect rebroadcasting, as in taking a picture of a picture to pass off the metadata.
• Rights of the image is the owner’s – Truepic does not have rights over the image/video but keeps a copy on its servers in case the user’s phone/tablet is lost, stolen, or broken. And most importantly, so that Truepic can produce the original image on its verification page when shared or disseminated publicly. 
• Court + evidentiary value: the technology and public-facing verification pages are designed to meet the highest evidentiary standards. 
  • Tested in courts; currently being testing at the international level but cannot disclose specifics due to confidentiality reasons.
• Privacy and security are key priorities, especially for working in conflict zones, such as Syria. Truepic does not use 2-step authentication because the technology is focused on authenticating the images/video; it is not relevant who the source is and this way it keeps the source as anonymous as possible. Truepic works with its partners to educate on best practices to maintain high levels of anonymity in any scenario. 
• Biggest challenge is usage by implementing partners – it is very easy to use, however the behavioral change to use the platform has been challenging. 
  • Other challenge: you bring the solution to an implementer, and the implementer says you have to get the donor to integrate it into their RFP scopes; then the donors recommend that we speak to implementing partners. 
• Storage capacity issues? Storage is not currently a problem; Truepic has plans in place to address any storage issues that may arise with scale. 

How did implementers measure success in their blockchain pilots?

• Measurement was both quantitative and qualitative 
• The organizations worked with clients to ensure people who needed the MEL were able to access and use it
• Concerns with publicizing information or difficulties with NDAs were handled on a case-by-case basis

The MEL space is an excellent place to have a conversation about the use of blockchain for international development – many aspects of MEL hinge on the need for immutability (in record keeping), transparency (in the expenditure and impact of funds) and security (in the data and the identities of implementers and beneficiaries). Many use cases in developing countries and for social impact have been documented (see Stanford report Blockchain for Social Impact, Moving Beyond the Hype). (Editor’s note: see also Blockchain and Distributed Ledger Technologies in the Humanitarian Sector and Distributed Ledger Identification Systems in the Humanitarian Sector).

The original search for evidence on the impact of blockchain sought a level of data fidelity that is difficult to capture and validate, even under the least challenging circumstances. Not finding it at that time, the research team sought the next best solution, which was not to discount the technology, but to suggest ways to cope with the knowledge gaps they encountered by recommending a learning agenda. The roundtable helped to stimulate robust conversation of the three case studies, contributing to that learning agenda.

Most importantly, the experience highlighted several interesting takeaways about innovation in public-private partnerships more broadly: 

• The initial MERL Tech session publicly and transparently drew attention to the gaps that were identified from the researchers’ thirty thousand-foot view of evaluating innovation. 
• This transparency drew out engagement and collaboration between and amongst those best-positioned to move quickly and calibrate effectively with the government’s needs: the private sector. 
• This small discussion that focused on the utility and promise of blockchain highlighted the broader role of government (as funder/buyer/donor) in both providing the problem statement and anchoring the non-governmental, private sector, and civil society’s strengths and capabilities. 

One year later…

So, a year after the much-debated blockchain blogpost, what has changed? A lot. There is a growing body of reporting that adds to the lessons learned literature and practical insights from projects that were powered or supported by blockchain technology. The question remains: do we have any greater documentation or evidence of the results blockchain was purported to have achieved in these claims? It seems that while reporting has improved, it still has a long way to go. 

It’s worth pointing out that the international development industry, with far more experts and funding dedicated to working on improving MERL than emerging tech companies, also has some distance to go in meeting its own evidence standards.  Fortunately, the volume and frequency of hype seems to have decreased (or perhaps the news cycle has simply moved on?), thereby leaving blockchain (and its investors and developers) the space they need to refine the technology.

In closing, we, like the co-authors of the 2018 post, remain optimistic that blockchain, a still emerging technology, will be given the time and space needed to mature and prove its potential. And, whether you believe in “crypto-winter” or not, hopefully the lull in the hype cycle will prove to be the breathing space that blockchain needs to keep evolving in a productive direction.

Author Bios

Shailee Adinolfi: Shailee works on Public Sector solutions at ConsenSys, a global blockchain technology company building the infrastructure, applications, and practices that enable a decentralized world. She has 20 years of experience at the intersection of technology, financial inclusion, trade, and government, including 11 years on USAID funded projects in Africa, Asia and the Middle East.

John Burg: John was a co-author on the original MERL Tech DC 2018 blog, referenced in this blog. He is an international development professional with almost 20 years of cross-sectoral experience across 17 countries in six global regions. He enjoys following the impact of emerging technology in international development contexts.

Tara Vassefi: Tara is Truepic’s Washington Director of Strategic Initiatives. Her background is as a human rights lawyer where she worked on optimizing the use of digital evidence and understanding how the latest technologies are used and weighed in courts around the world.