Of the many emerging technologies that are likely to shape the future of international development, perhaps none is getting more attention today than blockchain. But for many mobile network operators (MNOs) and their partners within the development sector, blockchain remains a misunderstood and disorientating concept, making it difficult to evaluate which particular development challenges the technology is uniquely suited to address, and what value such projects are, and might be, for different stakeholders.
Over the last several months, the GSMA Digital Identity team has been working alongside a number of our colleagues, operators, and public-sector partners to improve our understanding of ‘distributed ledger technology’ and to discern where opportunities might exist for blockchain-enabled platforms to address crucial barriers to social and economic development, such as the global identity gap. After months of interviews, workshops, conferences, desk-based research and informal conversations, we’ve learned two important lessons that were fundamental in shaping our new report, Blockchain for Development: Emerging Opportunities for Mobile, Identity and Aid.
First, to our great relief, we have learned that you do not need to be an expert in cryptography or computer sciences to understand where and how blockchain might impact the development space, any more than you need to comprehend the inner workings of the internet to appreciate the value of a connected device. To borrow a line from Don and Alex Tapscott’s Blockchain Revolution, a good starting point for demystifying blockchain is realising that ‘although the technology and cryptography sitting behind blockchain is complicated, the main idea behind it is simple’. Blockchains are ‘machines for creating trust’ – secure platforms that allow people and organisations to share information with each other with an unprecedented degree of trust and transparency. In the first part of our report, we offer an uncomplicated, high-level of overview of how blockchain works, and we highlight key characteristics of the technology that we think make it interesting from a development perspective.
Second, in workshops and group discussions on blockchain we’ve heard one particular phrase used over and over again: ‘it’s all about the use-cases’. That is, people are finding that a good starting point for understanding the role blockchain might play in the development space is to first learn what a real, live ‘blockchain for development’ project actually looks like. To that end, the bulk of our report is focused on highlighting how four blockchain platforms are currently being used to improve people’s access to self-sovereign identities (BanQu and Gravity), bring new levels of transparency to the distribution of international aid (Disberse), and improve the efficiency of humanitarian cash transfers (WFP’s Building Blocks). For each case study, we sought to answer five core questions:
- What development challenge does the blockchain platform solve?
- How is blockchain changing or improving the approach to tackling this challenge?
- Why was blockchain chosen as the most appropriate technology?
- What were the main challenges to implementing this platform, and where is there evidence of success?
- How can the mobile industry add value to this initiative?
Even though the platforms highlighted in the report are still in the early stages of development, we are encouraged to see opportunities for these (and similar) platforms to enhance the role operators play in the humanitarian and aid delivery spaces – by providing them with new opportunities to support development partners, create new revenue streams, reduce their Know-Your-Customer (KYC) compliance costs and related barriers, and contribute to the UN’s Sustainable Development Goals (SDGs). Like any other enabling technology, we do not expect blockchain to become a silver bullet for every development challenge we face, but it is exciting to see that some use cases are beginning to emerge that blockchain is uniquely qualified to address, and that this new technology is allowing organisations to achieve things that only recently seemed technically infeasible. Our team looks forward to staying engaged in, and contributing our insights to, this evolving space.