Blockchain is a revolutionary solution to world problems
Digital identity, driven by blockchain technology, can solve global problems around refugees, human trafficking and food programmes. World agencies are taking the lead in testing and proving the technology.
We have written several articles about the importance of identity, and how blockchain offers a way for people to own their sovereign identity. We have looked at start-ups with digital identity solutions and countries experimenting with voting systems.
However, this concept of personally-owned identities registered on a blockchain will remain small and localized until there is widespread acceptance and coordination. It is useful, therefore to look at some projects that are aimed at achieving global acceptance.
The drive for acceptance of digital IDs
In 2015, the United Nations member nations adopted the 2030 Sustainable Development Goals (SDGs). Target 16.9 is a global commitment to “provide a legal identity for all, including birth registration” by 2030. There is, therefore, a political urgency to solve the problems of establishing identity, especially for the 1.1 billion people who have no legally recognized identity.
The General Data Protection Regulation (GDPR) by the European Parliament, passed in 2016, highlighted the importance of security and privacy of personal data. Companies are being required to protect individual data, while at the same time having to provide KYC and AML information (Know your company and Anti-Money laundering). This is extremely onerous and expensive.
There is increasingly a recognition that modern technology offers new solutions to an old problem. Smart devices, especially mobile phones, are proliferating and there is wide availability and adoption of the internet. The possibility now exists for established technologies such as biometrics to be combined with newer technologies such as blockchain to provide a safe and verifiable form of identification.
What are the requirements for acceptance of digital IDs?
Digital identities won’t be globally accepted until some key requirements are met:
· Central authorities, public institutions and private organizations agree that the identities are valid
· There are agreed standards for interoperability, and methods for how the information should be displayed and used
· There is coordination across geographic and institutional borders
· Specific properties to be included/criteria to be applied are clearly identified
· It can be shown that records will survive disasters and breaches that would compromise more centralized record-keeping systems
All of this clearly is going to take more than a few start-ups working in isolation. However, there are some very promising large-scale projects currently underway. They may pave the way for later smaller applications.
Large-scale digital identity projects
1. The World Bank and the ID4D initiative
The Identification for Development (ID4D) project aims to benefit a billion people who currently have no proof of identity. The goal is to develop digital IDs for these people to allow for “financial inclusion, health services, social protection for the poorest and most vulnerable and the empowerment of women and girls”.
The World Bank Group has provided analytics, assessments and financing for identification systems for over 30 countries. It has also set up relationships with a wide range of organizations, including the UN, various foundations, think tanks and academics, standards bodies and the private sector.
A research report titled “Technology Landscape for Digital Landscape” addresses the various technologies that can be utilized and combined to deliver digital IDs.
Three types of technologies are identified:
· Credential technologies, such as biometrics, barcodes, magnetic strips and security for physical ID cards, as well as authenticators, SIMs, etc for mobile IDs.
· Authentication and trust frameworks. This is where blockchain should be considered along with other systems such as FIDO UAF or U2F, and OpenID Connect.
· Analytics such as risk and predictive analytics, evaluation of business and operational activity and matching of bio-graphics.
The report predicts that mobile identification and authentication technologies (which would include blockchain) will grow in importance especially in developing countries.
2. The ID2020 Alliance
Three types of technologies are identified:
· Credential technologies, such as biometrics, barcodes, magnetic strips and security for physical ID cards, as well as authenticators, SIMs, etc for mobile IDs.
· Authentication and trust frameworks. This is where blockchain should be considered along with other systems such as FIDO UAF or U2F, and OpenID Connect.
· Analytics such as risk and predictive analytics, evaluation of business and operational activity and matching of bio-graphics.
The report predicts that mobile identification and authentication technologies (which would include blockchain) will grow in importance especially in developing countries.
The ID2020 Alliance says that it is committed to improving lives through digital identity. It is an alliance of governments, NGOs and the private sector. It believes that implementation at scale is possible if the global reach of all of its partners is leveraged and funds are channeled and directed towards high-impact projects. They plan to piggyback on current systems and processes already in place to reach large numbers of people. For example, immunization rates far exceed birth registrations in many countries. These immunization details could well form the basis for identity.
A focus of this alliance is the achievement of Target 16.9 of the UN’s Sustainable Development Goals, which is that everyone should have a legal identity by 2030.
Accenture, Microsoft, Gavi (the Vaccine Alliance) and the Rockefeller Foundation are founding partners. One of the technology partners is Hyperledger, a blockchain-based company.
The ID2020 Alliance has identified the criteria that are required if digital identity is to gain universal acceptance. Such an identity must be
· Personal: unique to you and only you
· Persistent: lives with you from life to death
· Portable: accessible anywhere you happen to be
· Private: only you can give permission to use or view data
Also important are security of data and interoperability across systems.
The role of the ID2020 Alliance will be to develop and test technological solutions for digital identity and to work with governments and existing agencies to implement the solutions. It will also fund digital identity pilot projects.
Accenture, one of the founding partners, will be rolling out a digital identity system to its hundreds of thousands of employees around the world. The system combines biometrics and blockchain. This will give employees the benefit of digital and persistent identity, cut back on the costs of background checks on Accenture employees sent to client sites, and serve as an example of how such a system would work.
3. The UN and the World Food Programme (WFP)
Refugees are a very important group of people who do not have legal identities. It is estimated that there are more than 20 million refugees worldwide.
The UN Building Blocks programme is a way to manage cash disbursements for refugees at the World Food Programme. The purpose is to allow refugees to select and buy what they want at local markets and supermarkets, rather than having food handed out to them. In 2016, this programme covered 14 million people and nearly a billion dollars.
Challenges include the relationship with financial service providers, fees, financial risk, privacy, reliance on vendor information and interoperability of systems.
A blockchain-based solution was tested in January 2017 in Pakistan and a pilot study commenced among refugees in Jordan in May 2017. It involved 10,500 refugees in the Azraq Camp in Jordan and covered 100,000 transactions with a value of more than a million dollars.
These refugees do not pay for their food in cash. Instead, they have an amount allocated to them and recorded on the Ethereum blockchain. In effect, they have digital wallets. At the supermarket, they are recognized by an eye scan matched to the information on the blockchain. What they spend is deducted from the sums they have been allocated as aid from the WFP. All transactions are recorded and verified in real time.
The results of the pilot project were very interesting as shown in the following slide taken from the WFP website:
The pilot is to be extended to cover all 100,000 refugees in Jordan. Further usages for blockchain were also identified by the WFP, including identity, supply chain, health, education and finance. It would prevent duplication of work between different UN agencies.
This project is an important one for food aid. Misappropriation of funds is a major issue, with up to a third of all UN funding lost to corruption.
While this project is designed to test aid rather than creating a digital identity, its usefulness for this purpose was confirmed by Caroline Rusten, head of the UN Women’s Humanitarian Unit:
“Blockchain could be used to create a secure, paperless record of skills and education that refugees can carry with them, to which information can be added as they are on the move. (This would allow) people to be appreciated for who they are and the qualifications they have and not just seen as refugees.”
4. Moldova, the UN and blockchain for anti-trafficking
Human trafficking has become a major global scourge with up to 40 million people, mostly women and children, thought to be trafficked every year.
Moldova is Europe’s poorest country and one of the worst affected by the trafficking of its citizens. Many of them don’t have proper identification and so quite quickly become “invisible” to authorities and easy to smuggle across borders on fake documents.
During 2017, Moldova partnered with the UN Offices for Project Services (UNOPS) and the World Identity Network (WIN). They plan to use blockchain to provide paperless IDs based on biometric data such as fingerprints and facial scans and stored on a blockchain. This would make these IDs impossible to fake.
Is identity a use-case for blockchain?
The UN, the World Bank, ID4D, ID2020, WFP and Moldova — important digital identity projects to solve world problems. And blockchain is a central part of the solutions.
So many people are still asking whether there are use-cases for blockchain. This might be because they are thinking too small. On the global stage, and with real and urgent needs, blockchain is proving to be a truly revolutionary technological solution.
