The hidden Digital Assets problem: use cases for contributing to growth in the real economy

MaRi Eagar
Oct 23, 2018 · 6 min read
Image: Money Tree

“The poverty rate in B.C. is among the worst in Canada. Too many people are struggling to make ends meet, earn a living wage, or find and keep affordable housing. Too many families are suffering without basic necessities, relying on food banks, going hungry or sending their children to school hungry.” The BC Poverty Reduction Initiative, BC Government.

The Problem in the distributed digital economy: Slow adoption and use cases for contribution to the real economy

The real economy is defined as “the part of the economy that is concerned with actually producing goods and services, as opposed to the part of the economy that is concerned with buying and selling on the financial markets.” (FT Lexicon)

Consider the research of the United Way ALICE project

“ALICE is a hardworking member of the community who is employed yet does not earn enough to afford the basic necessities of life.

ALICE earns above the federal poverty level, but does not earn enough to afford a bare-bones household budget of housing, child care, food, transportation, and health care. The United Way ALICE Reports use new measures to provide a more accurate picture of financial insecurity at the state, county, and municipal level.”

Traditional measures of poverty do not capture the magnitude of people who are struggling financially. Our new metric offers a better way to count and understand ALICE, and to ultimately inform policy decisions to affect positive change for this growing portion of our population.”

ALICE is a United Way acronym that stands for Asset Limited, Income Constrained, Employed.”

Reference: The United Way: Alice Project

Why this is important

Significant resources and efforts are applied by digital assets and digital economy technology initiatives from North American entrepreneurs to address the challenges faced by the unbanked.

There is a large proportion of society in North America who are currently finding it challenging to engage, adopt and contribute to development of decentralized technologies and the digital economy.

This increases the risk that they will be “left behind” in the digital economy, creating a bigger challenge fo them to achieve financial wellbeing and achieve the good life including physical and mental health.

The ALICE demographic faces a variety of challenges in accessing the blockchain economy safely, which could prevent us for achieving our dreams for a more inclusive economy and just society:

  1. Lack of knowledge about the industry, the risks and opportunities for their financial future
  2. Time: to attend meetups, study after hours, learn how to use the technology
  3. Physical constraints: e g inability to travel to events, lack of access to social media and other leading edge technology (including smartphones)
  4. Almost impossible to participate in the blockchain economy: difficult to invest in compliant security tokens and other tokenized digital assets (technology barrier as well as issues of scams, etc)

The Risk: Increasing financial inequality and future exclusion from the digital economy

Considering that it is estimated that between 70% to 80% of people in Canada and the USA live within the definition of being financially distressed or close to financial distress: for them not being able to participate in the distributed digital economy will inevitably result in deepening socio-economic and digital inequality.

Missed opportunity?

Unlike what many pundits declare, most people in North America are very aware of the fact that their personal and private data are utilized as “free labour”.

Many of them are worried about increasingly losing their privacy through surveillance technology.

They also understand the problems of being unable to access information because of the monopolies of large technology companies.

And those who are aware of new technologies and opportunities they present, desperately want to participate as they understand it will potentially provide them with financial access in the future.

Examples of Potential Use Cases currently not explored — Use of data

  1. Household Data Collection: in a way that households who provide the data can also directly benefit from use of the data
  2. Household Data Collection: households and data collection organizations can be assured of better security and data protection
  3. Household Community Rewards Program: Completion of Financial Wellbeing surveys in a way that contributing households earn reward tokens (that can be turned into real money or cost saving for life’s necessities)
  4. Financial Wellbeing Partner Reward Program: Reputation Rewards Partner Program completing activities in a way that they earn reputational tokens that will increase their influence in helping to promote new policies in BC based on real time economic measurements of financial hardship
  5. Improved reputation and accuracy for Social Impact Bonds: Payments by the public sector/financier for improved social outcomes that result in public savings.

Understanding this market and considering use cases

There are various reasons why Alice and Bob currently find it challenging to engage and fully participate in the digital economy.

Below are some resources to understand these challenges.

These resources will help provide insights and simulate ideas on how the token and blockchain economy can contribute to reducing poverty and contribute to new financial wellbeing opportunities.

User Experience

Take the United Way challenge to understand the tough financial choices Alice and Bob make.

Watch this inspiring TED Talk about changing stereotyping of poverty: “Poverty isn’t lack of character, it’s lack of cash.”

Meet Alice

She is divorced with two children ages 7 and 10. Her ex-husband does not pay alimony, and has little involvement with her and the children because of his personal health issues.

Alice works full time as an administrator in a low paying role in the government and studies after hours to complete a certificate in HR. Over weekends Alice makes extra money by cooking meals and cleaning the apartments of senior citizens.

She would love to be a psychologist, but would simply never earn enough to even get a student loan to study or take time off for full time studies.

Alice is worried that new changes in technology will make her work redundant.

She is unable to attend any meetups or get involved with new technologies as she does not have money to travel nor pay someone to look after the children when she is not home.

As a government employee she works on outdated computers due to austerity policies and will have no exposure to machine learning or even blockchain or fintech technologies.

She does not use social media and does not have internet at home as she cannot afford it. Her children do not have mobile phones, and attend a public school.

Meet Bob

Bob just celebrated his 50th birthday. A month ago he had an annual performance meeting, and was informed that the retail company where he worked as a manager, lost significant business due to Amazon’s online shopping platform. Bob was given a three month severance package, three free career counselling meetings to transition to a new job, and qualifies for Unemployment Insurance for 6 months after the three months severance is over.

He is frantic as his wife has been unable to find work for more than two years and they already live frugally in a rented studio in a basement.

Bob and his wife heard about bitcoin and blockchain, and want to get involved as they hopes it will help him get work with blockchain or AI projects, but he does not know where to start.

Bob also discovered last week that he has a heart problem, which is made worse because of his stress about not having a job anymore.

The company where he worked did not invest much in technology, and Bob has therefore limited experience using collaboration platforms. He has never been involved in any entrepreneurial projects.

They both attend blockchain and AI meetups, but find that it is difficult to fit in due to their age.

Example of initiatives to create awareness and create products and services for Alice and Bob

Decentralized Financial Wellbeing Hackathon in Vancouver

Photos from the event by Women in Emerging Tech

#Financial #inclusion #ALICEProject United Way #Real-Economy #prosperity-for-everyone

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