The real-world difficulties with “banking the unbanked” (and how Shyft can address them)

There’s long been talk in the blockchain space about the problem of “the unbanked.” This term refers to some 1.7 billion people around the world who currently do not have a bank account of any kind. That’s a huge number of people, and the specifics of their circumstances (location, income level, degree of disenfranchisement) differ greatly. Yet they’re often spoken of as a monolith, which might point to the lack of seriousness among people who purport to care about building a solution to this problem.

The fact of the matter is, onboarding people with little or no existing institutional credentials is a complex task that requires a highly flexible, considered approach to truly solve.

Really, the problem of “banking the unbanked” is inextricable from the greater problem Shyft exists to solve: the problem of online identity. Whether you have a checking account with a major bank or not, the fundamental question and problem remains the same: “how can you prove you are who you say you are?”

The unbanked present an extreme example of this problem because they have the least obvious collateral to prove their identity with. In many cases, this is due to institutional deficiencies that are no fault of their own. Being a resident of a failed state, for instance, is clearly an unjust reason to be excluded from formal participation in the global economy. Justice, incidentally, should be understood as the building block of trust, which is itself the engine of prosperity. This might sound lofty, but we truly believe that a more just society is ultimately a more prosperous one. That’s why we’re looking to make sure that the Shyft Network offers as many paths to inclusion as possible.

Image from a 2017 FINCA report showing global account ownership rates

Trust Anchors, Attestations, and private key management

For anyone who hasn’t read up on how our network functions, I’ll briefly explain two key concepts: Trust Anchors and Attestations. Trust Anchors are third-party organizations, businesses and government offices that perform some level of identity verification on their end, usually via physical signup with an actual clerk. They exist on our network as their own nodes, and they can broadcast Attestations of the data to each other. Attestations consist of anonymized metadata — in other words, data about data. Assuming users have given consent, these attestations are then shared by request. An Attestation could confirm, for instance, that the user in question is over 18 and resides in a particular jurisdiction. With that information confirmed, the user will gain access to the service provided by the data requester — all without any sensitive data ever touching the network.

Now, the unbanked and totally disenfranchised offer a unique challenge to this model because they may not have any kind of traditional documentation associated with trustworthy entities that could be used to help onboard them. That’s when it becomes necessary to get a little more creative! For example, one concept is to start by assigning new “identities” (actually cryptographic addresses, of course), then beginning to build trust in those identities via less traditional means, such as allowing others with traditionally accepted credentials to vouch for them.

Building out our solution in the real world

As we’ve previously discussed, Shyft has signed a Memorandum of Understanding with Bermuda to pursue a comprehensive electronic ID solution that will look to combine services and generally streamline a lot of currently redundant and costly onboarding processes. We’re also working with other governments in the region to hopefully expand this network. As you might imagine, working with a government to implement a blockchain-based solution is a world apart from the “traditional” crypto ecosystem and its lone-wolf ideals. For institutional players, the notion that individual users have to assume all the responsibility for keeping track of their private keys and there’s little to no recourse or actions to be taken if and when they’re lost (or, heaven forbid, forcibly taken via rubber hose or black bag cryptanalysis) is simply not acceptable. Clearly, for the network to satisfy all parties, there need to be robust protections in place for everyone. Add the concept of onboarding the unbanked and the need for those protections becomes even more urgent, because the risk level would seem to go up significantly.

Revocation of attestations

So one of the major features we’ve built into Shyft is the ability of to revoke attestations. This simply means that the network can require users to re-submit their credentials to their Trust Anchor in certain circumstances. The conditions that trigger revocations may differ depending on network standards, as well as the precise scenario that precipitated the revocation. For example, if a user loses the cell phone containing the wallet app with which they manage their keys, they need to be able to ping the network by other means and “pause” the use of their key until they can ensure that no one else has access to their data. Since blockchains function on a single source of truth, they’re actually a much more natural and functional fit for revocation features than existing protocols like SSL.

This ability to perform revocations runs totally counter to the traditional risk model associated with the crypto sector, but the fact of the matter is, we’re building a network intended for mass use and mass adoption, and tools for the public need to actually work for the public. For these purposes, we much prefer a semi-centralized web of trust model that safeguards accessibility while leveraging the safeguards and efficiencies offered by blockchain. We firmly believe this model is the best way to pursue our broader goals for the network. We know that’s not going to make everyone happy, but, ¯\_(ツ)_/¯ .

Where do we go from here?

As is hopefully clear by now, Shyft is being built and designed around the real needs and problems we all know about from our actual lives, not some abstract set of ideas based on the dogma of decentralization. Over the next couple of months, you’ll be hearing a lot more from us about how you can get involved with the Shyft Network; when you do, we hope you’re every bit as excited about what it can do as we are.

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