Proof of Care Investment Adventure Coins Series

Identifying the Poor

Executive Summary

  • This report shows the importance of identity.
  • Discusses a failed and a successful system for the unidentified.
  • Discusses blockchain v digital.
  • And outlines guidelines for identity systems practice.

Introduction – Identity

Article 6 of the Universal Declaration of Human Rights 1948 is that everyone has a right to recognition before the law – in other words everyone has a right to an identity.

Yet, hundreds of millions, 1.7 billion (world bank) – it’s hard to count the invisible – do not have that basic human right, they are unidentified, they are in the eyes of the world a no name band – the ones at the bottom of the shelf.

If you can’t be identified, you can’t be involved in efficient economic activity.

But also, if you can’t be identified, you can’t be counted and if you can’t be measured then currently the worlds welfare can’t really help you.

For the poor no identity is not an inconvenience, it’s a life shortener.

Introduction – Identity and Blockchain

Enter Blockchain: at it’s heart is identity and for the world’s poor at their heart for being identified is Blockchain.

Blockchain is a key to identity and identity is a key to blockchain.

Blockchain-based identity systems for the unidentified can have several advantages and disadvantages. Here are some major plus and minus bullet points:

Some Major Plus Points:

Decentralized: Blockchain-based identity systems are decentralized, meaning more secure and less prone to hacking.

Immutable: Once data is stored on a blockchain, it cannot be altered or deleted, making it a highly reliable source of information.

Privacy: Blockchain-based identity systems can provide a high level of privacy and security since they use advanced cryptography and can be designed to be anonymous.

Some Major Minus Points:

Complexity: Blockchain technology is complex and requires specialized technical expertise to design and maintain.

Scalability: Currently, most blockchain systems have scalability issues, making it difficult to manage large amounts of data. This can limit the number of users who can be included in the system.

Interoperability: Blockchain-based identity systems may not be interoperable with existing identity systems, making it difficult to integrate with other systems and exchange data.

Engagement – Case Study 1 – Kiva.org

The Kiva Protocol is a blockchain-based identity verification system that was developed by Kiva, a nonprofit organization that facilitates microfinance loans in developing countries.

In 2018, Kiva released a whitepaper titled “The Kiva Protocol: Building a Social Identity Verification System on Hyperledger Fabric” that outlined the technical details of the protocol.

The Kiva Protocol is built on top of the Hyperledger Fabric blockchain platform, which is designed for enterprise use cases. The protocol uses smart contracts to manage the verification of user identities and the issuance of digital identity credentials.

One of the key features of the Kiva Protocol is its use of a social network-based approach to identity verification. The protocol leverages social connections between users to establish trust and verify identities. For example, if two users have a mutual connection on social media, this can be used as evidence that they know each other in real life.

Fail: As with so many early adopters of Blockchain, what seemed like a great idea and a noble cause, starting in a blaze of glory in 2018, ended in 2022 with a flameout, having not scaled to anywhere near the heights of the hype.

Why?

Lack of Adoption: prevented it from achieving critical mass.

Technical Challenges: The Kiva Protocol faced several technical challenges, including slow transaction times and high transaction fees.

Lack of Funding: The Kiva Protocol was developed by a small team with limited resources, which made it difficult to compete with larger, better-funded projects in the blockchain space.

Competition: The decentralized identity space is crowded, with many other projects and protocols competing for users’ attention and adoption.

Regulatory Challenges: The decentralized nature of the Kiva Protocol made it difficult to comply with existing regulations and laws, which created additional hurdles for adoption and limited its potential use cases.

Reflection

If Kiva could be accused of anything it was of being overly ambitious and it took on too much, in too many countries, too quickly. In the end (without them confirming this) their own system would have become unidentifiable due to the many nuances/values/regulations of many countries, with many different business and organisational differences to the point of overwhelm with the resources Kiva had available.  

Engagement – Case Study 2 – aadhaar Card

For an identity system to work it has to have a strong, even dominant presence within it’s environment, such as Aadhaar – India’s Identity card.

Aadhaar is a 12-digit unique identification number issued to Indian residents based on their biometric and demographic data. It serves as a proof of identity and is mandatory for availing government services, subsidies, and benefits.

The Aadhaar identity system, which is the largest biometric identification system in the world, has been successful for several reasons:

Scale and Coverage: Aadhaar has been able to reach a large portion of India’s population, covering over 1.2 billion people.

Biometric Verification: The Aadhaar system uses biometric identification, including fingerprints and iris scans, which make it difficult to duplicate or forge identities.

Integration with Other Systems: The Aadhaar system has been integrated with a range of other government systems, such as banking, social welfare, and tax systems, making it easier for people to access these services.

Political Will and Support: The Indian government has provided strong support for the Aadhaar system, making it a priority for the country.

Strict Data Protection and Privacy Measures: The Aadhaar system has implemented strict data protection and privacy measures to ensure that people’s personal information is kept secure. This has helped to build trust in the system and ensure that people feel comfortable using it.

Reflection

The guiding principles for a blockchain identity system should be what will work best rather than what will work with blockchain.

And they are best summed up by digitalprinciples.org

  1. Design for scale and sustainability
  2. Understand the existing ecosystem
  3. Design with the user
  4. Use open standards, open data, open source, and open innovation
  5. Reuse and improve
  6. Address privacy and security
  7. Be collaborative
  8. Be iterative
  9. Choose appropriate technology

 

References

Method of report: Read all references below and then asked Chat GPT to summarise a number of specific questions I put to best summarise them.

Digitalpricniples.org

Wikipaedia

Kiva.org

Hyperledger and Kiva.org brochure –

https://www.kiva.org/blog/sunset-kiva-protocol

https://www.hyperledger.org/wp-content/uploads/2021/01/Hyperledger_CaseStudy_Kiva_Printable.pdf

www.ijcaonline.org/archives/volume174/number26/priscilla-2021-ijca-921188.pdf