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Look Who Is Riding the Blockchain Hype Train

By Guest Writer on May 31, 2018

blockchain international development
A blockchain is basically a special kind of database. They are inherently inefficient compared to a traditional database, but that is viewed as a sacrifice to gain security, transparency, censorship resistance, and even exciting things like giving users the ability to even own their own data.

Private blockchains do not offer these benefits, or at least not as clearly as public chains. They basically perform the same function as a standard database, with the exception of sharing ownership amongst the entities in power.

A lot of organizations in the global development space are using private blockchains to ride the hype train when a centralized solution can do the same thing, but better.

Is that a real blockchain use case?

For example, when I heard about the World Food Programme piloting blockchain, I was really excited. They make claims like:

The blockchain is a digital ledger technology used as a trusted way to track the ownership of assets without the need for a central authority, which could speed up transactions while lowering the chance of fraud or data mismanagement.
World Food Programme

After looking into the Building Blocks project and learning that it is a private chain that utilizes Proof-of-Authority, I can’t help but ask, why not just use standard tools from Amazon Web Services that will be cheaper, easier, and much more efficient?

There is no magic dust here, and if authority notes are going to comprise of people that the WFP controls or has the influence of, there seems to be no difference functionally relating to security.

The authority itself is centralized and there’s no real reduction in fraud or data management unless the WFP is giving authority to other entities they have no power over, and even then, is it really worth it?

I am remarkably skeptical when organizations describe benefits of a public blockchain to describe their privately held solution. They go on to say things like:

As of January 2018, more than 100,000 people residing in camps redeem their WFP-provided assistance through the blockchain-based system. Thanks to the technology, WFP has a full, in-house record of every transaction that occurs at that retailer, ensuring greater security and privacy for the Syrian refugees.
World Food Programme

WFP has a full, in-house record of every transaction? Sounds awfully familiar… very much like a traditional database. To be fair, it is feasible that this implementation would have some value if the WFP adds partner organizations to form digital trust between WFP and said organization, but even then, was trust a major issue between partner organizations?

What is and is not a blockchain use case

To be clear, I love that WFP is looking into this technology in an active way. I am happy they partnered with some industry leading companies like ParityTech. I believe we as global practitioners need to be more involved with the development of blockchain today instead of waiting for Silicon Valley technical biases to complain about tomorrow.

My concern regarding projects like WFP’s Building Blocks is two fold:

  • There is understandable confusion between benefits of public and private blockchains and the lack of clarity adds to that confusion, and
  • Will this continue to cause critical global development researchers and practitioners to roll their eyes any time they hear the word “blockchain” because it’s not actually offering anything new, and overcomplicating something unnecessarily?

There are seemingly countless projects that are private chain-based that are disguised as having benefits of the public chain, and even more concerning are projects that don’t publish information at all on their technical implementations that affect vulnerable people.

More blockchain hype train

Aid:Tech, an organization that has won major awards and grants, been featured in dozens of major media outlets, and is partnering with organizations like the Irish Red Cross and the United Nations Development Programme (UNDP) seems to be doing just that.

The programs they are running seem very exciting that use “blockchain” with digital identity and a financial payments implementation that seems cutting edge while promoting their implementation of blockchain as providing more security and transparency.

As an advocate of the Digital Principles, I feel uncomfortable when organizations like Aid:Tech are not being transparent with their system designs or at the least, not making that information easily accessible.

At the time of writing, for example, they have a section entitled “Case Studies” which has a link to an area of their website that consists of two short paragraphs with very basic information on the project, and a handful of photos, and a graphic that presents benefits of the program in 8 bullet points. I have also reached out to Aid:Tech about more information about their implementation and received no response.

We need to cultivate a culture of forthrightness and transparency about a technology that is billed as being for transparency and security.

In fairness, public chains might seem scary to organizations. They are available to be validated by anyone, and privacy and security protections need to be thought through thoroughly, but to be honest, we came here for the benefits of the public chain, not an overly complicated, inefficient database disguised as innovation.

By Matt Crum and originally published as Are Some Blockchain for Good Projects Fooling Us?

Filed Under: Solutions
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14 Comments to “Look Who Is Riding the Blockchain Hype Train”

  1. One of the best pieces I’ve read on blockchain to date. Clear and easy to understand, and well-made arguments. Thank you for sharing!

  2. Willie Ngumi says:

    I think the term ‘riding the wave’ is appropriate. There is undue pressure to be the next big thing, and even often fixing what is not broken. But my comment will be about the temptation to mis-label innovations in development. There seems to be a need to be on top of it, leading to projects named as the technology, rather than the interventions. Here are random examples I have cobbled up (no intended reference to any actual project).
    – Unix for Tuberculosis project
    – Windows 10 for refugees project
    – Ride share for pregnant women
    These to me are synonymous with Blockchain for XYZ. AS you say, block chain is just a technology that serves a function. The function could be useful in certain situations, but not necessarily every situation. So interventions are named by the tech piece, they glorify the tech… despite it service one of several functions towards an end. So emphasis should not be on the tech… but on the overall solution… otherwise its riding the hype.

  3. Houman says:

    Dear Matt,

    I’m behind WFP’s Building Blocks project. Thank you for your thoughts. I have previously replied to similar ones in the comments section of this post (https://davidgerard.co.uk/blockchain/2017/11/26/the-world-food-programmes-much-publicised-blockchain-has-one-participant-i-e-its-a-database/). I have also outlined some of the reasons of why we are exploring blockchain and what we hope to achieved in my Devcon3 presentation (https://www.youtube.com/watch?v=y50C2JEZMrQ).

    In short, we have just started and have a long way to go. Conceptually we favour a public chain as it is self-sustaining and does not require the backing of the WFP or any other particular entity to function and hence better suited for long term resilience. In fact, we did our proof of concept on a public chain for this reason. Based on the learnings, however, we switched to a private implementation as the public Ethereum chain, for example, is currently too slow and too expensive, and there are some security and privacy issues to be worked out. However, solutions are constantly being developed and I believe it is only a matter of time before the current impediments for us to use a public chain are sorted out. Smart contract code runs pretty much the same on a private chain as does on a public one, so we would be able to port our developments to the public chain once it is ready for us.

    In a large organization such as ours, technology is only one of the components of implementing innovation. We dedicate a significant effort to adapting policies and procedures as well as gaining agreements. On a comparative basis, the technological innovation has been the easy part, to a large extent due to the strength of our development partners. However, for this to be an impactful initiative, we must also advance the non-technological components as well and gain buy-in not only from within WFP, but also from humanitarian actors at large. If the humanitarian community collaborates around a neutral blockchain network, there is a true potential to reduce the fragmentation and duplication that exists in the system and empower the people we serve in a meaningful way. As such we are actively inviting others in our filed to explore the space together and collaboratively develop solutions that make could make a difference.

    It is correct that Proof of Authority (PoA) is our current consensus mechanism as we have determined it is the best available option for our current needs/implementation. However other consensus algorithms regularly emerge and we will consider switching if we find something superior. Regardless, the idea is not for the other PoA nodes to be hosted by entities under WFP’s control, but rather by other independent humanitarian actors who are also implementing their work through the network so that collectively we increase security and transparency by validating each other’s transactions. As also noted earlier, through this we could potentially also reduce the fragmentation and duplication that exists in the system and empower the people we serve. We think it’s worth a shot.

    Hit me up if you wish to chat more (houman.haddad@wfp.org).

    Best,
    Houman

    • Scott Kipp says:

      Houman, thanks for the link to your Devcon3 presentation – it is excellent and I hope everyone else can take a look. While I’d agree with the post here that there seems to be an abundance of hype about what a blockchain can do and that there are (perhaps) cases proliferating of where a standard database would be just as effective, what you are doing strikes me not only as justifiable innovation, but as judificious, impactful and imperative. I can’t think of any other cases or efforts out there that stand a better chance of reducing waste, duplicative effort and transactional inefficiencies in donor programs. As you’ve rolled this out, even though using a private chain, have you come into any issues of transactional scale? Will you or have you already started using smart contracts with your vendors or partners? And lastly, just curious if you have a method for users (such as in the Jordan example) to remove themselves from the ledger, request that their biometric ID be forgotten?

      • Houman says:

        Hi Scott,

        Thanks very much for your kind words!

        One of the advantages of a private network and PoA is that we do not foresee any throughput issues even if our current case load increased by a factor of 20 (and we have solutions in mind once/if we move beyond that).

        We do use smart contracts, but not yet for payments to vendors, mainly because we are not currently employing cryptocurrencies. If we could use cryptocurrencies, life would be easier as the transaction would also be the settlement, and if widely accepted, the beneficiary blockchain wallets would also become their ‘bank’ accounts, taking a major stride towards financial inclusion. However, we can’t (yet) use Crypto as they are currently volatile and not always legal. Having said this, a number of governments are looking into putting their own currencies on blockchain and if/when this happens, we could do so much more, including paying our vendors through smart contracts (which by the way could have massive implications for us if that means paying faster and taking advantage of better payment terms).

        While we are cautiously pushing the envelope, our main commitment is ensuring we do not put the people we serve at risk. This was one of the decision factors in going with a private chain so that we do not inadvertently put any sensitive beneficiary information in the public domain that should not be there. In fact, we put no personally identifiable information about our beneficiaries even on our private chain, much less their biometric data. In Jordan, the Syrian refugees that WFP assists are biometrically registered with the United Nations High Commissioner for Refugees (UNHCR) and even WFP does not have direct access to their data. When a benfeciary scans their iris, the iris template (to which WFP does not have access) is verified by UNHCR and the resulting confirmation used to trigger their private key. As such, beneficiary biometric data currently come nowhere close to our blockchain. One aspect of blockchain that has us excited is the potential for beneficiaries to own and control their own data, and ideally all sensitive information, including biometrics (should they be used), would be stored locally with the beneficiary and they would authorize every single use of any of their data.

        I hope this has been useful.

        Best,
        Houman

      • Matt Crum says:

        Hey Scott-
        My intention with this article isn’t to dump on projects but to do two things: 1) educate and differentiate public and private blockchains and 2) advocate for more public transparency published alongside projects. My unedited article (posted here: https://medium.com/@mattscottcrum/are-some-blockchain-for-good-projects-fooling-us-7576932d0093 which had to be shortened because it was too long for this forum) explains more in-depth my feelings regarding public and private chains. I hope I’m not being unfair or overly nitpicky, but when I read from their project site http://innovation.wfp.org/project/building-blocks “Blockchain is a digital ledger technology used as a trusted way to track the ownership of assets without the need for a central authority, which could speed up transactions while lowering the chance of fraud or data mismanagement. Crucially, its peer-to-peer nature removes the need for verification from costly intermediaries such as banks or other institutions.” I get rubbed the wrong way. PoA is not peer-to-peer. There is a need for a central authority in this case, and in any PoA private chain there is still central authorities, but perhaps 1, 2, or 3 in these cases (the reality is 1). I’d like to see well-resourced organizations like WFP publish more information to the greater community and help move public blockchains forward in such a young space instead of what in my view would be compromising on still-very-centralized private chain solutions. I applaud Houman and that team for at least being public about their implementation when asked, but I wish it was published and not in the middle of interviews, etc. and they were contributing to the public community with findings, challenges, etc like many in the Ethereum community do.

        Aid:Tech’s complete disinterest transparency and in sharing anything other than buzzword dribble is a deeper problem that I don’t believe should be tolerated. It may be a great project for all we know. We just don’t know. And we should expect more.

        Thanks for the comments and perspective, Scott. Hope I’m coming off as somewhat reasonable and not coming off as being petty. Certainly not the intent.

        Cheers

        • Roo Boysse says:

          Matt, your article is a hit job with a clickbait title that sets a very negative tone. From that perspective it’s very far from fair, and given Houman’s comments, the correct thing to do would be for you to update and amend the post.

    • Matt Crum says:

      Houman- Thanks for adding additional information about the project here and rounding out the conversation from a different perspective. I hope you found my comments fair, and as I wrote in the article, I appreciate that your team is investing a into blockchain! It’s a visible project that is maybe a bit easier to analyze (and critique), and I appreciate that your team has been more transparent about implementation than others (see the other organization mentioned in the article). I think it’d be great to perhaps publish more information on your website on where the project is at and what it’s accomplishing now and what you hope it to grow into.

      I am happy to hear that your team is theoretically on board with public chain solutions, and hope that you will adopt them in the future. In the meantime, there are some really neat ways to be able to scale with more hybrid models of public & private,or with public sidechains that would be a lot more cost effective and efficient. I’d love to hear your evaluation of those implementations if your team went down that path. The more learnings your team can publish, the bigger benefit you will be to the rest of us in the community!

      Thanks again for your comments! If you have any private concerns or thoughts, free to reach out to me at mattscottcrum at gmail.
      Matt

      • Houman says:

        Hi Matt,

        We appreciate the effort to separate the fire from the smoke. We do make an effort to be as open about our project as possible and communicate about its successes and challenges the best we can. We are a small team, however, and things evolve rapidly, so perhaps we could do more in the communication department. We are always happy to answer questions if asked however.

        We are aware of side chains, sate channels, and so on that could speed up transactions and lower costs. However, these do so by essentially opening a ‘tab’ on the main chain and doing all the actual work somewhere else and then ‘settling’ the tab back on the main chain. They definitely have their merits and we have considered them, but for now our focus is on gaining collaboration.

        Finally, at the risk of nit-picking, I don’t believe PoA is incongruent with peer-to-peer. If all nodes on the network are authorities, then who is the central one?

        Best,
        Houman

        • Matt Crum says:

          Thanks, Houman and I appreciate the dialog here! Regarding PoA not being peer-to-peer: perhaps we have different perspectives here. From my point of view, it’s not p2p because I’d speculate your organization will choose who are authorities that are able to validate (please correct me if I’m wrong) or you will set up some sort of governance system amongst partners who will choose who the validators are. People outside of those in organizational power cannot choose validators if they desired. It isn’t a “trustless” system, you inherently have to trust verifying nodes and you choose who can do that (at this point). Even if other partners could choose who can verify, it’s still trusting in validators that are chosen by power players. It’s not decentralization at that point from my perspective. I’m also not convinced that solving trust issues between two or more entities is a groundbreaking big theoretical breakthrough. Not having to rely on external entities determining organizations that are trustworthy to me is a (the?) major selling point for blockchain. I’m not going to pretend to have all the answers here and I’ll be the first to admit, governance is another deep topic that is hard, but if your organizations stopped existing, could the network still validate? Could someone step in? At the end of the day, there are clear points of failure and they are a few nodes vs the many. I’d love to hear what your perspective on that is.

          I am happy you’re open to questions and dialog and kudos for that!

  4. Hear hear! Too many organizations are diverting aid money into technological experiments and private company interests.

    To me, sitting in a Western country, it seems that the reasoning for choosing a techno-centric approach is completely reversed: Not just choosing the solution before finding the problem as Willie Ngumi rightly observed, but even choosing the solution in order to retain public backing for aid! We are letting communication aspects and cultural trends decide how aid projects should be done. Drones, blockchains, social media etc. are trendy, and aid projects and government institutions then benefit by pushing these new efforts into spotlight.

    The aid organizations seem manipulated in their pursuit of the next innovative or disruptive technology. The Blockchain Hype Train serves as the evidence.

    And this is a very good point to make, because it’s ironic: For public blockchains to be public and secure, they need data and application infrastructure to be crowd-sourced. But when the larger organizations appear unable to understand the nature of the products they deliver, they contradict a basic premise for the public blockchain. How do they then expect for instance an identity blockchain to be operated by people who do not even own smartphones yet?

    This is the naive innovation model: We build something that may not work and may not be relevant to anyone. Then we see if it scale, and we try to “market” it. But this sort of hit-miss model is naive at best, when the nail is actually the financial infrastructure or identity management of a whole sovereign nation.

    And I don’t mean to stop having great ideas and solving problems with technology: I just mean that the people governing these investments seem to have lost their compass.

  5. Georgia says:

    Thank you for writing this piece. As you mention, a lot of these problems stem from the way funding is being delivered. I have lost count of the number of grants or prizes I’ve seen advertised which just include a long list of buzzwords. AI, blockchain and drones are certainly the most common offenders. If adding the word “blockchain” to your grant application means you’re far more likely to be accepted then there’s no wonder this is happening.

    We desperately need more tech experts on the panels assessing these grants and investments. As a software developer it’s frustrating when you see millions of dollars of donor money being invested in nonsensical applications of technology and vapourware.

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