Much has been written about blockchain technology, but much of it is impenetrable to outsiders. Aid organisations are therefore dependent on the honesty and clarity of specialists – usually private companies like ours, with a product to sell to those organisations – in order to make judgments about the utility (or otherwise) of blockchain.
Unfortunately there’s too much hype around blockchain in general, and definitely too much hype around blockchain for aid.
It always takes longer for projects to come to fruition than you hope, ours included – yet the technology press announces initiatives as if they’ve already achieved exactly what they claimed in their press release. Seeing through this smoke and mirrors is critical, and the best tool for this is transparency.
Transparency is what makes it possible for all of us to learn, and it’s critical for meeting the ethical challenges that face the aid industry as it applies new technologies.
I’m the COO of Disberse, which is currently testing the alpha version of a blockchain-based fund distribution platform in a series of small-scale pilots with NGO partners. We decided early on that we wanted to be as transparent as possible, both with potential clients and with the wider sector; so, we thought we’d start by identifying some lessons we’ve learned in our first 18 months.
1. Blockchain is not a swiss army knife
If somebody claims their blockchain solution can do it all – digital identity, peer-to-peer donations, cash transfers, impact monitoring, health records – you should probably press them on the details, especially if they don’t appear to have much experience with any of those things.
You need to target a specific problem – in our case, our long experience in the aid sector showed us the challenges involved in distributing funds to where they’re needed, as described in the Grand Bargain – and you need to explain clearly how and why blockchain could be part of a solution.
2. Translate technical terms to business processes
Discussions about public, private, and permissioned blockchains, or about proofs of work, stake, and authority – these are all pretty incomprehensible to most people. They’re important technical points, but it’s essential to translate them into business processes; fundamentally aid organisations want to know what blockchain can do, not how it works.
For Disberse, blockchain improves two aspects of financial processes: transparency (which is essential for accountability) and decentralisation (which is essential for localisation).
3. Be honest about your capability – and your ambition
We are only the beginning of a much longer change process for the sector. During our pilot phase, we don’t leverage the distributed capability of blockchain since we’re still using the Ethereum testnet. While this is disappointing for blockchain purists, we believe we have a good rationale.
This is a new technology with transformative potential – but we still need to show that it works, that it’s reliable, and that as a company we’re responsible regarding the risks involved. Due diligence – on both the non-profit and for-profit sides – is critical.
4. There is no progress without experimentation
Could a centralised solution do the job as well as blockchain? At the moment, probably. But this isn’t just about the present moment, it’s about building for the future; in our case, a distributed financial infrastructure maintained by a regulated financial institution.
We don’t know exactly what that will look like, because as far as we know nobody has ever built it before. It might not work, but that brings us to the assumption that we started the company with: you’ll never know if your idea will work unless you test it in the real world.
By Paul Currion, Founder & COO, Disberse
From this blog post:
> »It always takes longer for projects to come to fruition than you hope, ours included – yet the technology press announces initiatives as if they’ve already achieved exactly what they claimed in their press release. Seeing through this smoke and mirrors is critical, and the best tool for this is transparency.«
From Disberse’s linked press release
> »First successful test of blockchain for international distribution of aid funding«
😀
I’m afraid that someone building and selling a product isn’t exactly the one’s you’d expect to write an interesting coverage of said product 🙂 It’s almost unreadable, because all you can do is think “what are they hiding or not explaining”. Anyways, that’s just a general observation, which applies exactly to this blog post and any other press release that a company would do to promote their product.
The interesting thing here is the way that Paul Currion mimics common blockchain critique to appear as if Disberse is different… but somehow magically doesn’t explain how or why it’s different, just repeats the same hollow statements that have always been made about Blockchain. Yes, it’s transparent, yes it’s distributed.. friend, we know that, we read ICTWorks, we don’t live under a stone 😉
Benjamin, thanks for your comment. I should point out that the “press release” that I linked to is not a Disberse press release; it was written and published by our partner, the Start Network. So the people who built and sold the product were not the ones who wrote the coverage – and we’re fine with that precisely because we agree with you on that point. Self-published press releases are questionable at best.
Start Network also carried out a learning exercise to accompany that pilot, and circulated the findings of the learning exercise to the membership of the Start Network. Overall the pilot was successful, but it certainly wasn’t perfect, and we were open about the problems with a group of 42 NGOs – all of whom were potential clients. If you want to verify this, you’re welcome to contact the Start Network.
The blog post here on ICTworks was written partly as a response to the critical blog post a couple of weeks ago, and I reject your accusation that I’m “mimicking” common blockchain critique. If you feel like it, you can review my twitter feed or read previous blog posts; I actually think those critiques are on the mark. Where are the successes at scale of blockchain, for aid or otherwise? They simply don’t exist.
My draft of this blog post was guided by our gracious host Wayan, who wanted me to focus on some simple lessons that aid organisations could use to frame their engagement with the technology. Believe it or don’t, not everybody is as smart as you; and most people are really struggling to work out if they should engage in the first place. I think these four lessons are a good starting point for that; what do you think?
Hey Paul! Good write-up and thanks for the reference to the hype article I wrote a few weeks ago here on ICTWorks. The main thing I was really trying to get at in that piece is yes, the hype, but really the slight-of-hand trickery that exists with promises of major enhancements of transparency, censorship resistance, etc coupled with private chain solutions and permissioned systems.
“Discussions about public, private, and permissioned blockchains, or about proofs of work, stake, and authority – these are all pretty incomprehensible to most people. ”
I totally agree here! I don’t think a lot of people understand the differences between private chains and public chains and I hope the first question everyone asks with a project that claims those attributes is “is it on a private chain or public chain”, and if they say private, ask a lot more questions like “Who are the validating nodes?”, “Can the same level of security and trust be done at a more efficient centralized level?”, etc. This is a new technology with new concepts and people need to start becoming familiar with the meaning behind foundational characteristics like public and private chains. I’d agree that most people on the outside edges of the space don’t need to go in-depth on all the different consensus algorithms, but foundationally they need to know some basics from my perspective before promoting them or buying into them in some way. My explanation on the differences between public and private chains was shortened down considerably because the article was getting too long and verbose, but it is in its original format here: https://medium.com/coinmonks/are-some-blockchain-for-good-projects-fooling-us-7576932d0093
I’d love to see some more transparency in technical implementation so people can validate claims of transparency and usefulness. Without it, I get concerned that people are being misled by the claims these organizations are using to raise money, exposure, etc.
I agree about the sleight-of-hand regarding enhancements of transparency – there is a lot of nonsense talking about this. I think what we’re building can really deliver on that front – but it actually raises a new batch of questions. Now that we can have transparency in the funding chain, what do we do with it? How does it affect the balance of power? In the end, cui bono?
On transparency in technical implementation, we plan for our code to be open source. This is possible because we see our added value in the service, not just in the technology. We put in the effort to get authorisation from the FCA, we’re building partnerships with liquidity providers, we’re engaged in discussions with clients to make sure we design something useful.
People are getting misled, and it makes me angry. I hope we can do better, but obviously you shouldn’t just take my word for it!
Totally and that’s all good to hear (and sorry for the delayed second comment, I accidentally submitted the first one before finishing).
I really love some of the open source blockchain communities’ standards. I love that I can read a whitepaper from Alice.si and understand what they’re trying to do and how they’re trying to execute. I love how people and organizations write their proposals publicly and get feedback on them. I think this will be as important as M&E. Like M&E, it takes resources, but shouldn’t be optional… or at least that we’re moving towards that standard. I’m still thinking a lot of this through and processing this kind of stuff though.
Cheers.
“We are only the beginning of a much longer change process for the sector. During our pilot phase, we don’t leverage the distributed capability of blockchain since we’re still using the Ethereum testnet. While this is disappointing for blockchain purists, we believe we have a good rationale.”
No problems from me here, but I just believe that the rationale should be publicly published and easily accessible. Testnet is awesome… to test on! Some people are doing some neat things with Testnet as a sidechain which is neat too, and totally makes sense (see Giveth.io and Griff Green and Vojtěch Šimetka’s work! It’s pretty cool!). I actually think how Giveth operates in terms of how they publish everything they’re doing and their direction is a great example, (not talking project specifically here, but transparency execution and implementation).
“Could a centralised solution do the job as well as blockchain? At the moment, probably. But this isn’t just about the present moment, it’s about building for the future; in our case, a distributed financial infrastructure maintained by a regulated financial institution.”
I totally agree with your premise of “there is no progress without experimentation. On point. I’m not against it. But any organization saying their solution is more transparent, decentralized, etc, and marketing it as such should provide a product that is more transparent, decentralized, etc and publicly publish how for those evaluating systems and platforms to support and use. I’m totally fine with using ethereum testnet, I just wouldn’t personally advertise decentralization or note somewhere on the website (blog, or some layer 2 part of the site) that the ethereum testnet is being used with the goal of testing. I think that’s totally fine. Just want to see some more transparency from companies and orgs.
All in all, I’d love to just see more transparency from organizations that claim to be improving transparency. This includes publishing some basic level implementation details, and if things aren’t where they need to be yet and need to ramp up, just some basics of that published publicly and accessible. This is vital from my perspective.
Anyway- Thanks again for the article. I love the conversation and it’s something we need to have to continue to have to help this space grow and mature. Kudos and cheers.
If it wasn’t clear, our rationale for using testnet is due diligence – the paragraph break possibly obscures that! While we’re doing pilots, it’s an extra “security feature” to reassure participating organisations who might be more worried about wallet security.
Re: transparency. While we are trying to be more transparent as a company, our value proposition is mainly to do with improving transparency in the funding chain. So it’s not the solution that we’re claiming is transparent, it’s what the solution enables.
I may have misunderstood your point there, I’m not sure – please correct me! I should also note that we’re bootstrapping, we don’t have any PR, and conversations like this (and directly with potential clients) are our focus, more than writing up technical specifications.
I hope that doesn’t come off as a weak excuse!
Thanks for the clarification re: testnet use. I was generalizing there a bit but did misinterpret that a bit.
I get that transparency is the value proposition, but I think for that to be a value proposition as a company, the technology re: the integrity of that transparency goes hand in hand in many ways when looking at things in a distributed trust kind of way. That’s the real value-add of blockchain is “trustless” consensus. It’d be hard to have a company touting trustless validation and transparency being a cornerstone while having to have clients to trust this third party without having much or any information on how it’s setup. Even many centralized companies are straightforward about their technical implementations to gain trust with secure and important data.
Just to make sure my previous statements aren’t misinterpreted, they aren’t of you or Disburse. I largely am just learning about what you folks are doing and will keep my eye out on it in the future, but haven’t done any homework or research or whatever, so none of this is personally directed.
I’ll be rooting for your team and hope you do super well!