ICTworks

In most developing and emerging economies, governments are in principle the main providers of public goods such as justice, security, health and education, among others.

However, this does not imply that governments themselves deliver such goods. Most times, implementation is outsourced to private partners, both for-profit and non-profit.

The new research paper Blockchain: Unpacking the disruptive potential of blockchain technology for human development shows this is the case for the design and current implementation of blockchain technologies in the global South.

The fact that local regulations are way behind new technologies has provided fertile ground for this to take place as has already happened with other technologies.

Government Services

In principle, blockchain technologies could be used for providing government services that involve the overall handling and management of public documents which, at least in many developing countries, people have a hard time obtaining.

More generally, blockchains could be used to support the overall provision of most public goods to citizens and stakeholders, especially those that demand personal interaction and require individual identification.

An implicit link between blockchain technology and e-government does exist, and it is now being explored by a selected group of blockchain startups.

• Procivis, a Swiss startup, will be soon launching a blockchain-based app store delivering selected government services to the public. It will also offer identity services to clients.
• Recently, Ukraine signed an agreement with BitFury to support the provision of public services to citizens, among other activities.
• Dubai has also joined the blockchain technology wave and is now planning to become a fully-fledged Blockchain City by 2020 as part of its ongoing Smart Dubai initiative.
• Several blockchain startups are now supporting these areas and doing work in countries such as the Philippines and Estonia, among others.
• Health is one of the key targets for Hyperledger, an inter-industry collaboration space to develop open protocols and standards for distributed ledger technologies
• In contrast, the education sector has not been able to attract a lot of interest from blockchain technology startups and consortia.

Most of the examples that follow show how blockchain technologies could support a wide variety of smart government programs and initiatives.

Land Tenure

Land titles were perhaps the first area where blockchain technology planning and potential deployment took place in a developing country. In 2015 the government of Honduras signed an agreement with Factom, a US startup, to use blockchains to manage land title registration and help manage fraud and corruption.

How did this happen? A local foundation promoting libertarian values initially approached the startup and then proactively built the bridge between the tech company and the central government. A confidential agreement was subsequently signed. However, a few months later the project came to a halt for reasons that are still unclear.

Last year, similar initiatives were also launched in Georgia and Ghana. In the case of Georgia, world-renown economist Hernando de Soto is involved as a member of the advisory board of BitFury, the blockchain startup implementing this initiative.

The case of Ghana is perhaps more interesting as a local not-for-profit startup, BitLand, is using Bitcoin’s blockchain to manage land titles and settle land disputes. BitLand is closely working with local institutions whose mandate is to issue land titles and are willing to try new technologies to solve issues that has been outstanding for decades.  BenBen is yet another startup in Ghana working on the same topic.

While the initiatives in Ghana seem to have fizzled out, Sweden is successfully moving ahead with its own land titles project, thus moving beyond the proof-of- concept stage. In any event, this seems to suggest that blockchain deployments in developing countries face complex challenges.

Identity Services

Several startups are already working on blockchain identity services. For example:

• OneID84 provides multiple-factor authentication and Single Sign On services, among others.
• Namecoin developed key technology for potentially protecting and authenticating personal identity, fostering freedom of speech and preventing surveillance.

This seems to be one of the most promising fields for the successful application of blockchain technologies as reflected by the increasing number of startups working in this area.

Blockchain technology-based identity can be effectively used for managing passports, birth and wedding certificates, national and electoral IDs, and handling e-residence programs, among others.

However, some critics argue that existing digital ID technologies are working  fine and are far more scalable than those using blockchain platforms. Blockchain technology scalability limitations could prevent massive deployments in countries with large populations such as India and China.

Freedom of Speech

Startups such as FlorinCoin and Publicism promote freedom of speech in different ways. The former has created a distributed ledger application (Dapp) called Alexandria that aims to be a decentralized repository of knowledge and information managed directly by end users. One of its applications is the preservation of censored digital content that usually quickly disappears from the Internet.

• Floricoin has enhanced the blockchain by introducing the possibility of attaching comments to blocks in the chain.
• Publicism offers support to journalists that face censorship in many countries, allowing journalists to use pseudonyms to protect their identities.
• MazaCoin, whose goal is to support native and indigenous US communities, recently started using its platform to protect freedom of speech and store protest photos on the blockchain.

Anti-Corruption

The US National Democratic Institute (NDI) has partnered with BitFury, the same startup doing land titles in Georgia, to promote anti-corruption efforts with a platform called Blockchain Trust Accelerator.

The purpose is to promote the development of blockchain applications that can foster open government and transparency. Launched in June 2016, there is not much information available yet on how the accelerator is evolving.

Electoral Processes

Electoral processes of various sorts have also bene ted from the deployment and use of blockchain technologies. Follow My Vote is a startup using distributed ledgers to run voting processes and prevent fraud and identity theft. One of the potential advantages is that voters using blockchains can verify their voting choices using their private keys at any point in time.

Ukraine is one country that has jumped into this area. The country will use E-vox, an Ethereum-based distributed ledger for local elections. Implementation has already started in a couple of towns.

One of the core issues however is access to the private keys which hackers could acquire in a variety of ways, or voters could offer to loan or sell their private keys for economic benefit. Once it emerges as a viable method, it will be interesting to compare blockchain voting with Internet voting, which is already in use in Estonia.

New Forms of Government

Some blockchain platforms aim at replacing or at least emulating government. The best example is Bitnation which allows users to create their own borderless countries that offer a series of services to its citizens. These countries have their own constitutions and some even offer basic income to its citizens.

Aid and Development

Aid:Tech, a London based company is perhaps the first blockchain technology startup that supported humanitarian and development efforts in the Middle East. The company provides a voucher system that can be used in even the most challenging contexts and helps ensure that financial resources securely reach their final destinations. Bitnation is now also offering support to refugees.

According to one report, seven UN agencies are exploring and/or using blockchain technologies to support their operations and programs.

• UNICEF disbursed USD 100,000 to support a startup, 9Needs, and has plans for doing the same for another five to ten startups. 9Needs works on health and development innovations.
• UNDP is supporting cash transfers and financial tools in Serbia and Moldova, and has plans to expand to other countries soon.
• UNWFP announced a blockchain technology pilot using Ethereum to disburse financial support to those in need in Jordan, building on the results of a smaller initiative in Pakistan.

In Conclusion

Deployments of blockchain technology in developing countries are not yet delivering any major disruptions on a sustained basis. Most are supply driven, operate as standalone initiatives not linked to ongoing programs, and local institutions play only a passive role with little sustained ownership.

Local economic and political challenges are still formidable and will remain so unless blockchain technology deployments adopt a more comprehensive approach. In this light, blockchain technology initiatives engaged in broader smart government programs and identity services likely have the best chance for success in the medium term.

Read more at Blockchain: Unpacking the disruptive potential of blockchain technology for human development, which served as the basis for this post.