Reply to Project-Unblocked-Cash – Khai Kwan
I recently read this paper-project by Oxfam, Sempo and ConsenSys called Project-Unblocked-Cash-ConsenSys titled as “Revolutionising Humanitarian Cash Transfers in Vanuatu” and described as “Project Unblocked Cash is an Ethereum-based Cash and Voucher Assistance solution developed by Oxfam in partnership with Sempo and ConsenSys to enable rapid, efficient and transparent financial aid for disaster relief.” You can get a copy from https://cdn2.hubspot.net/hubfs/4795067/Project%20Unblocked%20Cash%20/Project-Unblocked-Cash-ConsenSys.pdf
Being the inventor of prepaid card user to user payment (US Pat 8,650,126), I am disappointed as it does not capture the realities of working in a disaster relief program. And the ‘revolutionizing’ part portrayed Ethereum/Blockchain as a second thought (as explained below).
In life and death situation, the instinctive first thought is finding-reaching to loved-ones, next is finding drinkable water & food which will very hard when everything around you is incomprehensible. Almost 50% will suffer from some form of mental or physical pain. Most are so distraught that they just hang on to dear life as best they could by shutting themselves out until rescuers arrived. Those who are able will be trying to their best to help others as best they could, some having to decide between helping or running. Nobody will be thinking of buying/selling stuff as suggested or transfer funds at least not within the first 24 hours.
It is the law of the jungle when panic sets in as disasters usually come in pairs. And then maybe some form of normalcy may appear hours later but not before. Those who survived the disaster will be fighting for — food, medicine, and drinkable water is the most sought followed by shelter-blankets, etc. Given this scenario…..
- Do we need a prepaid cash card to buy and sell “things” or to transfer to another?
In my view, no. We need a voucher card where one’s action is recordable for taking the donation such as food, medicine so we reduce the situation where food/water/medicine is hoarded to be exchanged or sold in the black market. Yes, black-market do exist in disaster areas most frequently and transfer payments facilitate this. There will still be such a market as survivals are desperate but as it is traceable, they will need to be accountable later. Such records will be linked to the “batch” of supplies.
2. The project emphasized on AML/KYC and CTF to onboard users during a disaster?
This is a bit awkward because, after a disaster, most will not even have access to water/food/medicine then how do they have access to their identity cards, passports or driver’s license or bank statements which may or may not be on them. There may be some with wallets or mobile phones capable of storing such information. But do we really need to do this AML/KYC/CTF when the law says anything less than 1K in a cash card can be excused?
3. The project used NFC enabled mobile phones and smart cards and synchronizing them to update a centralized database as control.
Most in poor countries don’t have a reliable telco network, particularly in remote areas. Consider those NFC enable mobile phones would not last 48 hours without battery or charging, unlikely to find a connection to the net anyway. Jiophone uses less power? or even the tested Mpesa running on sms only ? or a raspberry pi (also cheaper at 40)? I am sure you can build anything with the latest one including to read the smartcard etc.
4. Is there really a need to record transactions on Block-Chain like Ethereum?
At page 13 the paper says — “The Sempo infrastructure served as a simple UI for viewing the Ethereum public blockchain and for facilitating bulk transactions (for funds disbursement). The backend also provided a local sending mechanism which means that when it received a transaction from the mobile app, it performed its own verification of each transaction. It updated the balance on a database and sent a reply back to the phone, prior to actually getting the transaction on to the blockchain. There was a one-to-one mapping of the NFC card IDs to Ethereum addresses. The transactions were put onto the blockchain by a single Ethereum account, which was effectively the Sempo admin account. The Sempo admin account was authorised to do so by the individual user accounts because they had triggered a token “approve” function for their balance amount. The “approve” permission was triggered when the NFC cardholders had their balances disbursed to them.”
The project shows using a centralized database to record first before sending the transaction to the block-chain to record as “grouped” transactions. I don’t really know what is the benefit of having this post-transaction (ie block-chain record). In the section “Additional Benefits” at page 28, it says donation (ie using the Ethereum address one can send a donation) vide a tokenized fund (in this case name DAI) as it is “stable”. Also in the works is a credit card to token platform facilitating donation for donors on the ethereum network. It also says “Due to the transparent nature of the system, donors would be able to see their donation arriving with Oxfam and its subsequent disbursement to the addresses of the recipients.” This is a half-truth as it is only possible provided the identities of the pre-paid cardholder can be verified which is unlikely for the reason that they may not be carrying identifiable documents in the first place. Even so, an audit may be possible 6 months down the track but given the nature of disasters, those who survived will move on though some may stay to rebuild, such an exercise to verify recipients may not be in futility.
Under the titled “Key Takeaways” on page 28 -Transactional limitation on the ethereum network was acknowledged but as most are done-offline this on a centralized database first this would not be an issue. At page 30, perhaps recognizing its role is secondary in this project, Consensys also made the following statements which I quote “A substantial benefit of utilizing the public Ethereum blockchain is that the actual funds are built into the system. The balances the blockchain holds are money, not a representation that needs to be reconciled by a separate process. This opens up the potential for creating a blockchain specifically dedicated to delivering financial aid globally (an Ethereum Private Sidechain).”
In short, it is suggesting a private side-chain one as a holder of real funds that are not available publicly and combining with its smart-contracts able to enforce policies rules etc will be ideal for an organization to dispense cash-aid. Of course, ideally but we are so aware of the issues facing the public chain beyond merely improving the transactional performance, where the code can be voted to correct “bad actions”, so where is the guarantee that a private side-chain will fare any better. The idea of a block-chain is attractive when you do not trust the provider. This is the fundamental reason why we have to go through so many nodes to verify an otherwise transparent record.
In disaster relief, the donees do not care about trust, they only need the funds to sustain his or her situation until he or she can pick up themselves. The donors would prefer transparency but it does not translate in having no trust in the provider. So it is rhetorical to ask whether we can feel safe that our trust in the NGO or the United Nation will not be betrayed in the 6 o’clock news. If we have a problem with this, the solution is don’t donate and introducing a block-chain is not going to change this. There is no shame in not able to help/donate.
Published at Tue, 13 Aug 2019 05:49:06 +0000
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