Development
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Blockchain technologies have already irrevocably changed many industries, with the most obvious example being finance. Fortunes are both made and lost with cryptocurrencies, but the blockchain itself acts as a constant and new force in the finance sector.
However, the blockchain is about far more than money, and many governments and organizations have started looking at what else it can do. A new project in Finland utilizes the blockchain to help refugees adjust to their new lives.BLOCKCHAIN FOR THE UNBANKED
Given the devastating conflicts arising in the Middle East and appalling economic conditions elsewhere in the world, many refugees have sought asylum and safety in European and Scandinavian nations.
Many of these people do not have much, and making sure that they have identifying documents is the last thing on anyone’s mind when seeking to escape death. This presents a huge problem in the traditional banking model we have set up today.
As many of us know, it can be incredibly frustrating to set up a bank account. Doing so requires countless documents and time even for settled members of society.
Unbanked individuals have a much harder time getting settled anywhere, since employers require that one have a bank account into which to send wages, landlords far prefer bank transfers to cash, and there is a certain level of security a bank provides that hiding spaces in homes do not.
Finland has come up with a pretty interesting solution to combat these problems with the help of the blockchain. In a partnership with a company called MONI, the Finnish government has provided prepaid Mastercard debit cards to those refugees who do not have bank accounts.
This is a sharp break from the past, when cash was simply dispersed.Each card has a unique identifier that is stored on the blockchain. This immediately eliminates the need for a third party bank or other financial institution to require verifying identities.
The card and cardholder are given that identity, it is stored on an immutable blockchain, and the account’s private keys can only be associated with the cardholder.
Advantages for the cardholders are incredible. These individuals went from barely being able to live a safe life to not having to worry about whether they are employable given their unbanked status. This is because the card acts like a bank account and can receive direct deposits from users’ employers.
Since only cardholders would have access to the private keys associated with the card, positively identifying individuals is both easy and secure. In fact, it seems the identities of...continue reading:
https://themerkle.com/finland-uses-the-blockchain-to-help-refugees/-
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Francisco Gimeno - BC Analyst A good case for blockchain being used for more than speculation indeed. In fact this could be extrapolated to every individual on Earth from the first world to those on the least developed countries, freeing the individuals from carrying papers certificates, titles etc, and easing the logistics and bureaucracies of this world. And in the Cas elf refugees who feel like living in a limbo this is a very very good practice.
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Use Case: ConsenSys puts up $50 million to hunt for blockchain solutions to glob... (news.impactalpha.com)Blockchain, meet the 2030 global goals.ConsenSys, an ambitious Bushwick, Brooklyn software company founded by blockchain tech guru Joseph Lubin, has launched a $50 million in-house venture capital fund to back startups turning the distributed-ledger technology on global challenges like refugee assistance, distributed energy, and supply-chain tracing.
The firm employs more than 150 former bankers, management consultants, mathematics, engineers and techies to build and support ventures developing new services and business models built on the blockchain.
The new venture fund signals the firm’s intention to demonstrate the potential of the emerging digital transaction architecture to transform the lives of world’s poor.“I believe resolutely in the 100-year mission of blockchain: to completely change the way society functions through decentralized technologies,” says Kavita Gupta, who was tapped to head the fund.
A former World Banker and previously an impact investor at the Schmidt Family Foundation of Alphabet’s executive chairman Eric Schmidt, Gupta told ImpactAlpha, “Blockchain is going to revolutionize the way we do business and use and share data.”Blockchain already is opening up entire new avenues for social and environmental impact, says Gupta.
Think about a Syrian family preparing to flee their home as war approaches. They’d have little time to collect their birth certificates and IDs, property deeds, education credentials and financial accounts.
“If you lived in a country that used blockchain from birth, you’d have all of that information accessible and instantly verifiable when needed,” Gupta said.Gupta says there are blockchain applications for nearly all of the 17 Sustainable Development Goals adopted by the United Nations, which aim to end poverty, guarantee universal education and much more, by 2030.
“I’m a huge believer in the SDGs and have worked with the U.N. to boost them,” Gupta told me. “Blockchain is an architecture. It can enable solutions to almost any SDG.”The potential of blockchain for good, and Gupta, will be center stage at the TBLI, for Triple Bottom Line Investing, conference in Stockholm September 28–29.Distributed ledgers
Blockchain allows two parties to make safe and transparent digital transactions, without the need for a middleman. It’s often described as “a digital ledger” or decentralized database that records exchanges of digital assets like money, goods or property.
Just as email is one particular use of the internet, currency, Bitcoin for example, is one particular use of blockchain. Other applications developers are building for blockchain include digital identifications such as birth certificates, property records, education documents, electronic voting and a range of financial services including remittances.
Roughly $20 billion, or 0.025% of global GDP, is held in blockchain. Blockchain-enabled transactions reduce time and costs, ensure accountability and reduce fraud. Where distrust of governments, banks and companies is real and founded, and people in transit, Blockchain can be revolutionary.
“When I speak about it in the West, people say they trust Google, Facebook, or their banks,” says Vitalik Buterin, a Russian-Canadian programmer and co-founder of Ethereum, an open software platform that has allowed developers to build applications beyond currencies on blockchain.
“But the rest of the world doesn’t trust organizations and corporations that much — I mean Africa, India, the Eastern Europe, or Russia.”It’s not about the places where people are really rich, he says. “Blockchain’s opportunities are the highest in the countries that haven’t reached that level yet.”Finance idealists
Lubin, a Goldman Sachs alum, has “a particular talent for peeling idealists away from their jobs in traditional finance,” according to Wired’s Morgen Peck.
The Consensys team page includes talent from Bank of America and Capital One, UBS, Deutsche Bank and JPMorganChase and other venture capital and hedge funds....continue reading: http://www.blockchaincompany.info/post/6524552/use-case-blockchain-voting-app-puts-democracy-in-the-...-
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Francisco Gimeno - BC Analyst I agree is a revolution. I already have said before I am very interested on this aspect of block chain, and again I say this is probably one of the most revolutionary sides, as there will be no more passive recipients but just people fighting against underdevelopment and global crisis.
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Maria Gimeno Again a fantastic development on blockchain development with a very powerful potential of not just changing but also rearranging the policies of how to deal with hunger, poverty, refugee crisis, education and other global challenges. I believe this should be coming soon and it will bring everybody together to participate into fighting inequality and poverty etc. Anyone through tokenization will be able to be an active fighter against these global challenges, included those who now are passive recipients of development help. A revolution indeed.
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Blockchain is an innovative new technology with the power to disrupt existing economic and business models, as discussed in EMCompass Note 40. Blockchain also has enormous potential for emerging markets. These nations appear poised for a more rapid adoption of blockchain, though a framework is needed to assess how the technology can be deployed and which applications and use cases are likely to be seen in the near future. While the potential of blockchain is great, the technology is still at an early stage of development and will need to overcome potential setbacks—technical, regulatory, and organizational—before it becomes mainstream. In such a context of uncertainty, companies in emerging markets can neither afford to wait until the outcome is evident nor expose their existing business models to overly risky wholescale blockchain initiatives. Instead, they will need to adopt an experimental approach that allows them to develop
Blockchain’s full capability is difficult to predict at this early stage in its development. Yet while most of the attention surrounding blockchain has taken place in advanced economies, its greatest potential for decisive impact may lie in emerging market economies. In 2016 Christian Catalini, Assistant Professor of Technological Innovation, Entrepreneurship, and Strategic Management at MIT’s Sloan School of Management, and Joshua Gans, Professor of Strategic Management at the University of Toronto’s Rotman School of Management, proposed an economic framework to assess the potential impact of blockchain and its capacity to disrupt the current market by reducing verification and networking costs.1 Their paper concluded that when blockchain is combined with cryptocurrency, marketplaces can be ‘bootstrapped’ to function without the use of traditional ‘trusted parties’ and thereby result in significantly lower networking costs for participants. 2 The paper also finds that open blockchains will likely have the most drastic effect on market structure, challenging the market power of incumbents and lowering the cost of entry for new entrants. Nevertheless, given the relatively high costs of the proof of concept, it is likely that most early adoptions of blockchain will take place in the form of (i) value-added applications built on top of existing blockchains such as bitcoin; (ii) private or semi-private blockchains targeting process efficiencies in financial services; or (iii)
The coexistence of public and private blockchains is assured, depending on the type of services and the nature of the industry where they are applied. A compelling business case for blockchain can be made in currently neglected or underserved markets, where there is a less competitive market structure and high verification costs. Use cases that are relatively simple to design and implement, and which are combined with already tested technological solutions such as cryptocurrencies, will likely find early adoption (for example, adding a digital currency payment option for wallets and cross-border payments). Intraorganizational projects intended to reduce organizational complexity and reconcile multiple databases would be another possibility. 3 Financial services firms are extending that kind of collaboration to trusted counterparties to reduce costs through private blockchains. Truly disruptive blockchain solutions that depart from existing business practices carry high potential for future growth, but their heightened complexity and need for stakeholder collaboration (such as elaborate financial instruments and smart contracts) will likely delay their adoption. Building on this hypothesis, emerging markets appear poised for a more rapid adoption of blockchain technology, as they meet many of the conditions listed above, including high verification costs, underserved populations, and in many cases
have a relative lack of traditional incumbents with significant market power to impede new entrants. In financial services, for example, the existing infrastructure is shallow in almost all low-income countries, many of which have also suffered from de-risking in the wake of the financial crisis. Fortunately, this handicap may accelerate adoption of blockchain, as a lack of financial infrastructure also means less organizational resistance to the new technology and lower transition costs for moving from a legacy to a new system. Consequently, regulators and existing financial institutions in emerging markets have less incentive to prevent the blockchain revolution, as it does not massively disrupt existing market conditions. Global payments and trade finance are examples of sectors experiencing a flurry of initiatives from market frontrunners and new entrants alike. Both have high transaction and verification costs that blockchain can reduce by improving the speed, transparency, and process. Emerging market nations have large population segments that remain underserved in terms of financial and banking services due to the high cost of customer acquisition for traditional financial institutions. In addition, the extensive use of mobile based services, particularly in Africa and Asia, provides an easy avenue for a blockchain-based system to extend its services. Even in lower income countries, mobile penetration is extremely high, at 83 percent among the 16-to-65 age bracket. 4 If blockchain manages to provide proof of concept for a viable business model in payments for mobile banks and other financial players, it would advance the longstanding developmental goal
of financial inclusion. Serving previously unprofitable customers and small and medium-sized companies can generate up to $380 billion in additional revenues.5 So blockchain may provide emerging markets an opportunity to leapfrog traditional technologies, as happened with mobile technology in many emerging market regions, particularly Sub-Saharan Africa.
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About IFC and World Bank Group work on blockchain IFC is part of the World Bank Group, mandated to foster development through private sector focused investment and advisory interventions. Within the World Bank Group, IFC participates in the initiative “Blockchain Lab” that was launched on June 27 by the World Bank Group VP Information and Technology Solutions (ITS) and CIO Denis Robitaille. The Blockchain Lab serves as a learning, experimentation, and collaboration platform on DLT (Distributed Ledger Technologies) and Blockchain inside and outside the WBG. The ITS Blockchain Lab engages and partners with leading technology companies, start-ups, entrepreneurs, innovators and development organizations to experiment, develop, and roll out blockchain-enabled solutions. The Blockchain Lab conducts knowledge-sharing events open to anyone interested in topics related to blockchain and development. This initiative aims to connect development practitioners and disparate efforts across the WBG in DLT and Blockchain technologies. The Lab will boost and contribute to increased WBG knowledge and expertise in DLT and Blockchain, and improve its capability to respond to client countries inquiries and needs. For more information please contact the Blockchain Lab team [email protected] or Stela Mocan, Lead IT Officer, Business Solutions, World Bank at [email protected]-
Francisco Gimeno - BC Analyst I agree with the article where it says that Block chain will be useful and will be accepted faster in emerging markets in the financial sector. I would say also on the development sector and in adding value and lowering verifications costs to agricultural products which are so important in emerging markets. I have lived the revolution of Mobile money in East Africa and understand how fast and easy will be for the public and the institutions there to jump to the Block chain wagon when needed. For me is also interesting when comparing with financial institutions in developed countries which are more cautious or even against BC startups and their ICOS. Again, the forefront of technology will be on developed countries but I strongly believe that many successful applications will be based on emerging markets first.
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“Are you ready for Isaac?”I attended a startup and tech conference four years ago, and one of the presenters asked this as the main argument of his keynote about fintech.
Back then, the industry wasn’t yet widely known as fintech. But the presenter, Scott Bales, had a vision for the banking system, and that is for tech firms to give better access to the millions and millions of unbanked and underbanked individuals across the globe through democratized financial services that are mainly digital-first or mobile-first.
He highlighted that for the financial sector, it’s now becoming more common to be “sans branch”. This means the physical presence of a bank branch is becoming less and less important, in favor of digital services that can be offered in lieu of it. Central to all these is the proverbial “Isaac”, a young person born in a digital native age, where persistent mobile data connections and mobile apps are ubiquitous, and where people’s first access to the internet are done on a mobile device instead of a computer.
This generation, argued Bales, who is now Managing Director at venture fund Innovation Labs Asia, does not know a world without the internet. And this means that startups will need to tailor-fit their services to an audience like “Isaac”. Startups, especially fintechs, will need to make leaps and bounds in order to better address the needs of a digital native generation – whether they are millennials or younger.With blockchain tech, tomorrow’s dreams are realized today
Fast forward to 2017, I am increasingly of the opinion that Bales’ thoughts were prophetic. However, back then we probably did not expect the potential of fintech to be so big. That was four years ago — startups were already dealing with peer-to-peer banking through mobile devices, and digital accounts could be opened through smartphone apps.
Still, these were largely based on the traditional banking transactions: depositing or withdrawing money, paying merchants for purchases, and using mobile devices for other such payment transactions. For years, Bitcoin and the blockchain already proved to be viable means to establish trust and authentication among fintech users and providers. However, the cryptocurrency’s rise was the bigger news.
Blockchain tech took a backseat role behind the scenes.Today, it is simpler than ever for users to take care of their banking and financial transactions through blockchain-powered services. And this has the potential to change the lives of millions of poor and marginalized users for the better, particularly through better access to capital, financial resources, and game-changing small business transactions.Reducing poverty through better access
According to the World Bank’s global financial index, there are around 2.5 billion unbanked or underbanked individuals across the globe, representing a quarter of the world’s population. For this number, the inability to access financial systems and transactions can be debilitating in terms of not being able to secure potentially life-changing resources.
For example, credit cards offer a good way to access credit during times of emergencies – medical expenses, urgent repairs, and even the need for small business expansion can usually be addressed with the swipe of a card. But what if you don’t have a credit card or even a bank account?
For most underbanked users, the last resort would be to turn to loan sharks and their extremely predatory interest rates. This contributes to the cycle of poverty, as such predatory lending practices often result in the borrower getting deep into debt even before they can finish off principal payments.
Thus, fintech companies and other startups are now tasked to address not only the highly-capable and moneyed crowd, but also the marginalized sectors, who stand to gain the most from innovations in finance.“We believe that if you really want to increase wealth, in any country, the best way is to make it easy to do business”, writes Alexi Lane, founder and CEO of Everex, a Singapore-based blockchain-powered startup that provides cryptocash services with focus on easy and inexpensive access to fintech services.
“Capitalism, entrepreneurship, and free flow of money have improved more lives than any development scheme or government policy. History is proof”, he adds.Lane has shared on Quora that the decentralized nature of the blockchain makes such payment platforms significantly more efficient and secure.
“So we’re opening up financial world to the underserved. International ecommerce for everyone. You can only achieve this with blockchain tech; everything else is too centralized. Once everyone has the same access to payment and business services, everyone has a better chance to make money and a better life. ”While its platform can be used globally, Everex is focusing on emerging markets, such as Thailand and Myanmar, where it has already established a foothold, enabling migrant workers to send money back home through blockchain-powered transactions.
Of course, the bigger opportunity is with how users can borrow small amounts of money through micro-credit transactions, without the need to undertake formal processes that traditional banks require, or without the predatory interest rates offered by loan sharks.In such transactions, cost and speed are main drivers of innovation.
“Ethereum, and blockchain technology generally, have the capacity to lower transaction costs, increase transparency and onboard diverse swathes of individuals who don’t have access to the financial services many of us take for granted”, says Lane.
These innovations are seen to bolster financial infrastructures, especially in emerging regions like Asia – one reason why Chinese firm Holley Group, has chosen to invest a US$500,000 round in Everex as its first capital infusion into a tech company in Southeast Asia.
It is “not just a single project investment, but an investment into the future”, says Wenxin Liu, Regional President of Holley Group ASEAN Region Headquarter, especially since such blockchain-powered platforms can equally service banks, financial institutions, and individuals.
As part of growing its platform, Everex is launching its initial coin offering (ICO), meant to crowdfund capital in exchange for digital tokens, wherein early adopters can get gains from better pricing on its cryptocurrency upon launch.. The ongoing ICO is currently at 30,000 ETH, equivalent to around US$ 6 million. Once complete, Everex aims for a total of $157.5 million in capitalization.Breaking the cycle of poverty through economic inclusion
It is certainly easy to take financial transactions for granted if a credit card and mobile banking app were easily accessible on a daily basis. However, it is not just in financial transactions where blockchain tech can potentially reduce poverty. At the Singularity University’s Exponential Finance Summit in Singapore this June, Ashish Gadnis, founder of blockchain-powered ID startup BanQu, says that economic identity is essential to breaking out of the poverty cycle.
It is not just about transactions, but also longer-term economic inclusion. Economic identity, he says, is “the marriage of identity and commerce, resulting in a global, vetted, and manageable asset. ”Again, it’s easy to take for granted the fact that you have an established identity, bank records, credit history, and the like. But for the billions of underbanked, such transactions and credentials are currently difficult to establish.
Platforms like BanQuenable users to “build a recognizable, vetted identity, which is the base prerequisite to participating in any form of ownership or transactions in the global economy”, adds Gadnis. BanQu does this by storing user data on its blockchain, which provides the ability to share data directly between two users without a centralized authority.
The secure and immutable nature of the blockchain offers a way to share sensitive user data without worrying about the information getting lost or altered along the way.
Thus, helping the marginalized goes beyond the infrastructure for transactions. The real value in pulling people out of poverty in the long term, says Gadnis, is giving them the identity in order to participate in these transactions. “People need to be connected to the supply chain, not be given more money.”In conclusion: Better access means better opportunities
It’s easy to take fintech applications for granted as faster, easier, and...continue reading:
https://thenextweb.com/contributors/2017/07/25/heres-blockchain-can-potentially-end-global-poverty/#...-
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