26 Sep 2016 UNDP Geneva
Daniel Gasteiger, co-founder of nexussquared – a Swiss business platform focusing on blockchain technology and its application to business, describes the technology as an, “immutable database”, a digital public ledger recording transactions chronologically – whether that be financial or otherwise.
“It started with Bitcoin, with Bitcoin itself a means to bring people in to the financial system that wouldn’t have a chance otherwise” he adds, referring to the social potential for this cryptological tool.
Recognizing that there is still much to be done to make the technology sustainable, Daniel’s organization is taking a step toward empowering non-profit start-ups and organisations with ideas that utilise blockchain technology.
“Ultimately blockchain is widely an economical system” Daniel describes, “people are able to become a part of it because it simply requires using internet technology and mobile phone technology, to allow them to be part of something that makes them interesting to the financial service industry when it comes to money transfer”.
Where financial intermediaries were previously necessary for an individual to participate in economic systems, “people are now able to transfer money across the boundaries or borders of nation states without paying fees” Daniel explains; making middle-men superfluous and empowering people from remote, developing or low-socioeconomic areas, displaced, without formal identification or refugees.
“Essentially it’s a free system to transfer money across the globe which only requires you to have a mobile phone and to download one of these so-called “wallets” and immediately you are a part of the system – and you can start using it”, he goes on.
Blockchain in practice: Creating positive social change
Offering mentorship and access to funding through incubator and investor services, nexusfoundation is working with several enterprises that have a view to tackle some of the social issues.
“Humnchain is a non-profit project, ran in its totality by volunteers with a mix of expertise and capabilities aiming to develop a blockchain based decentralized application to trace charitable donations every step of the execution value chain. Blockchain, a game-changer technology, provides an extraordinary opportunity to provide transparency by tracing your donated amount and offering visibility on how it is spent. You will never have to doubt again if the charity uses your donation in the way it was intended”.
“Taganu is an organization that aims to provide financial services that are well suited to refugees, as well as those working to become established in a new country.
The vision is for an open banking solution that will leverage the latest technological advances in order to grant access to Europe’s financial system, believing that banking services should be as easily accessible as an email account.To make this vision a reality, they aim to provide limited but fully operational debit cards and checking accounts for anyone in need of such a service, regardless of residency status or available documentation. The system will be built on blockchain and delivered through mobile, and will make the process of relocating and integrating into a new society much, much easier”.
Daniel sees the application of blockchain not only as a means for financial inclusion, but as a “transparent way of recording ownership and identity”.
“In Honduras they have started a land title project to register land ownership using blockchain technology”, starts Daniel, “it’s not corruptible. If you record something as your own, it’s not in danger of being revoked and ownership is not able to be taken away because it’s been recorded in the public eye on with immutable technology. This is a powerful way to engage people in becoming part of society in such an economic way!” He continues, referencing the ability of blockchain technology to help overcome corruption issues within centralized institutions.
What’s needed for the adoption of blockchain?
It’s not a new idea, it’s just been repackaged with new technology. Daniel considers the example of Estonia; a country that established the notion of a “digital identity” some 15 years ago. Similar to the social security system in the US, this digital identity follows citizens around, allowing them to call on personal data instantaneously when required; including health records and voting and tax data.
For the Estonians, the next step is to bring it on to a blockchain – which they have already begun.
“Ultimately we all will have a blockchain identity – that is my conviction; allowing self-governance and relying on approval by someone or something, such as social media logins to prove your identity,” Daniel reveals.
“If government support this by giving you validity or a stamp of approval on a self-governed identity they could welcome universal usage” he continues, imagining a world with less paperwork, stress and fussing about.
In order to see this type of technological breakthrough in immutable identity and financial inclusion, Daniel agrees that it’s the attitudes and views of people that will need to shift.
“Estonia became a digitized country by chance – after the fall of the Soviet Union they had strong human capital with strengths in crytopgraphy”, he explains. “What we need to make it a reality is a change in generation of government officials, a better understanding of technology, a better understanding of blockchain”.
Still in its infancy, there are a lot of questions on security and scalability; so it’s going to take a grassroots effort and education about what Daniel describes as the potential for a “peer-to-peer utopia”. He closes with a positive view toward the future adoption and adaptation of business models and systems to include blockchain technology.