ICTworks

Of all the emerging technologies that are likely to shape the future of international development, blockchain is certainly at the peak of inflated expectations. International development organizations and mobile network operators are struggling to separate the hype from reality.

Blockchain in a sentence is a secure platform that lets people and organisations share information with each other with an unprecedented degree of trust and transparency. It could transform the way people and institutions are able to collaborate, exchange value, share information, track assets and deliver vital services. Or it could flounder like 3D Printing did.

Several blockchain use cases for international development are starting to emerge across several sectors (governmental, corporate, activist) and domains (benefits payments, medical records, performance rights, food chains and more), exploring the benefits of blockchain-enabled security, veracity and efficiency in distributed record-making.

Blockchain for Self-Sovereign Digital Identities

GSMA has released a new Blockchain for Development report that explores two short case studies that highlight how blockchain platforms are currently being used to improve people’s access to self-sovereign identities.

Experts on digital identity in international development are starting to shift their focus to developing “self-sovereign” identification systems in the belief that people should have greater control over their own personal identity and the value derived from personal data.

In contrast to systems where governments or institutions provide ID credentials, self-sovereign IDs are built to empower individuals to control the formalization of their identity, manage their digital personas, and actively monetize their personal data.

Self-sovereign identity systems will require a willingness from global institutions, governments and other service providers to collaborate and share sensitive information outside of their internal, trusted silos.

Despite the widely accepted belief that blockchain technologies replace the need for human trust, it is crucial to point out that with permissioned ledgers the user must still trust the people who designed the application, the platform owners and the verifiers of data that is recorded on the chain.

The blockchain for digital identity case studies in GSMA’s report are presented with one significant caveat: both highlight platforms that are in the early stages of development. There is still much work to be done to prove that blockchain platforms such as these are cost-effective, secure, sustainable, and more appropriate than other enabling technologies.

KYC Compliant Digital Identities with Gravity

In more than 140 countries, MNOs are now subject to mandatory SIM registration obligations which require customers to present Government-recognised identity credentials before a SIM card can be activated. Similar (or identical) Know-Your-Customer (KYC) requirements need to be met when customers open mobile money accounts.

In most cases, these KYC regulations only allow customers to present identity documents that have been issued by government authorities, such as national identity cards, passports, or drivers’ license

Gravity describes itself as a ‘next-generation identity solution’ with an ambition to give everyone access to a mobile phone by creating a digital identity infrastructure that is fundamentally inclusive. To do this, they help individuals establish a trusted identity – or ‘Proof of Existence’ – that is independent from public infrastructures and non-dependent on official identity documents, postal addresses or banking systems.

The platform has not been fully deployed to date, but Gravity has recently run a first pilot in Kenya registering 1,000 users over three days, and is currently working on a second pilot with an aim to register 10,000 people on their platform.

While Gravity’s end-to-end solution uses back-end blockchain technology to certify a customer’s KYC-related information, the customer’s experience and interaction with the app remains streamlined and easy: users do not need to know what blockchain is in order to use the platform, and the service works on any mobile device through a USSD menu or smartphone application.

Customers are guided through the enrollment process with help from a Gravity agent who visits them at their home or in their community. To begin, the customer uses a USSD menu in their own mobile device to self-declare their KYC-relevant information, including:

• First name
• Last name
• Phone number
• Date of birth
• Gender
• Nationality

All of these identity claims are then anonymously sealed on a public blockchain and stored on a second permissioned and cryptographically secured distributed ledger. At this point, confidence in the customer’s identity is at a base level.

Next, the blockchain enables the customer’s self-declared information to go through a process of ‘distributed vetting’. As a last step in the enrolment process, the user provides contact details for five or more of their peers (typically family members or friends), who are subsequently sent an SMS message asking them to verify each of the identity claims.

In this way, an entire virtual community becomes involved in validating the integrity of the user’s identity. A machine learning scoring module ensures that inaccurate or malevolent information is rejected, and as a further incentive to Gravity’s users to report information that is accurate, if the majority of their peers respond by confirming that the information is true, Gravity rewards the original user by providing them with free mobile airtime credit.

As more and more relationships are established and information is validated on the blockchain, confidence in the accuracy of the user’s attributes – and hence the identity itself – grows organically, allowing Gravity to build a real-time risk assessment of each customer’s profile. Additional critical fields of the KYC profile can be added subsequently, such as the user’s National ID, birth certificate, professional license for merchants, or any other information required by regulators.

Once a user’s KYC-relevant information has been authenticated, mobile operators can be given permission to link into Gravity’s blockchain to check a customer’s KYC-related information and see the most current picture of their risk profile. Importantly, the encrypted, PIN-protected application gives each user the ability to remain anonymous and in full control of their personal data until they decide to share specific information, with a specific service provider, for a specific purpose.

The solution complies by design to the EU General Data Protection Regulation (GDPR) requirements on personal data protection which is considered to be the most stringent anywhere.

Economic Identities for Smallholder Farmers with BanQu

BanQu‘s mission is to connect the world’s poorest people to the global economy by providing them with a secure, portable digital identity. Their proprietary blockchain-based platform allows smallholder farmers to set up a unique digital profile and then connect with their peers, aid organisations, governments, banks, and payment companies to accumulate data on variety of personal and financial transactions.

In a live production environment, BanQu has seen early evidence of success in Asia, where they are working with a global consumer product company to create economic identities as part of wider efforts to create a supply chain transparency tool. The ICTforAg application is designed to work on any mobile device, and is free to sign-up and use.

Through BanQu, anyone with a mobile phone is able to connect to the BanQu network and set up their economic identity. Knowing that farmers are unlikely to have access to physical documentation that verifies their economic credentials, the BanQu platform begins to create a unique, digital profile by capturing the user’s selfie and a ‘mashup’ of other immutable (i.e. unchanging) characteristics.

From there, the ethereum-based, permissioned ledger allows the user to connect to and interact with their ‘banked network’ – including family, friends, agribusinesses, service providers, and associated NGOs – who can use their own phones or BanQu’s website to record and authenticate any of the farmer’s personal and financial transactions.

This might include:

• Property records
• Cash disbursements
• Input purchases
• Harvest quality
• Health records
• Training records
• Credit histories

As the BanQu user starts accumulating a transaction history and a registry of their assets on the BanQu blockchain, this information is used to build a traceable, vetted and farmer-owned ‘economic identity’ that can provide new or more targeted access to a wide range of formal services.

Through the BanQu platform, the end user sees every transaction that is stored on the blockchain and maintains ownership of their personal information – as with the Gravity platform, the BanQu user decides what information is shared and with whom. When a farmer wishes to access new financial services, BanQu’s platform gives banks or other FSPs the ability to check the identity components as captured in the blockchain, ensuring they are able to fulfil any identity-related regulatory and compliance requirements.

While the concept behind an economic identity seems simple, the technologies available before blockchain were not strong enough to make it a reality; according to BanQu, a centralised approach to managing user identities would be too cumbersome, too insecure, and too ‘heavy’.

A permissioned, distributed ledger on the other hand is powerful, light and easy to configure. Furthermore, the fact that the platform is distributed and consensus-driven means that an endless number of trusted partners can contribute to the blockchain, and with each new addition the strength of the farmer’s economic identity is improved.

BanQu believes there are opportunities for mobile money providers to utilise the data collected through the BanQu platform to form a more complete picture of their customers.