January 17, 2018 | By Cara LaPointe + Lara Fishbane
The Beeck Center for Social Impact & Innovation, with funding from the Rockefeller Foundation, has launched the Blockchain for Social Good project to develop a framework for privacy and ethics in the implementation of blockchain in support of vulnerable and marginalized populations. As a digital, distributed ledger technology, blockchain has potential for unlocking access to services and support for these populations. Leveraging their inherent trust mechanisms, transparency, and immutability, blockchains are being launched in a wide range of applications from establishing immutable digital identities for refugees, securely tracking disaster response or humanitarian resources, linking underserved populations with formal banking populations and beyond.
Yet the same characteristics that make blockchain so interesting also present challenges and risks, especially for vulnerable end-user populations. The transparency and immutability of data in a blockchain system raise ethical and privacy concerns that could put individuals or vulnerable communities at risk. To better understand these concerns, the Beeck Center has worked with a diverse community of privacy, ethics, technology, financial, legal, policy, and other experts on the Blockchain for Social Good effort. Their insights are helping to create a framework, which will be used as a tool for decision makers to better understand and implement blockchain technologies for positive social good outcomes.
There is a lot at stake here, since blockchain technology has the potential to disrupt countless industries and drive exponential social change if done correctly. The promise of blockchain lies in its distributed network, meaning that rather than one central authority holding the ledger, all users of the system have copies. This is fundamentally different from current systems as it allows participants to all agree on the information held within the ledger and transact without an intermediary. In the absence of a governing intermediary, the rules written into the code of the blockchain facilitate trust between participants.
We are already seeing organizations turn to blockchain as a driver of social impact because it circumvents the need for trust in institutions. For example, it allows individuals to exchange money without having to trust a bank and opens access to voting, identification, and property registration when there is distrust in central authorities. In the social sector, organizations have begun using blockchain technology to empower vulnerable populations by connecting unbanked groups, such as refugees, to financial systems and registering land records of communities so that all property transactions are public and transparent.
These opportunities, however, are not without risk. Digital identity maintained on blockchain’s distributed ledger is of particular concern when aiding vulnerable populations such as refugees or victims of natural disasters. Individuals from these groups are already prone to being targeted for exploitation both in the short and long term, and exposing their personal data would only heighten this risk. Further, in post-conflict communities, high incidence of physical disfigurement might increase the likelihood of identity theft and ownership fraud at a time when identity proofing is critical for delivering aid.
However, beyond just privacy implications, there are other aspects of the implementation of blockchain technologies with serious potential consequences and ethical concerns. For example, a core issue around establishing identity using blockchain technology is by whom and by what standard information is verified when it is first entered into the system. For example, if property claims become part of an identity record, who verifies the validity of a particular property claim before it is assigned to an individual could have huge ramifications on how land is distributed. Even decisions about what type of data is collected could unintentionally advantage certain segments of a population at the expense of others. These are some of the challenges of system governance, digital identity, information access and authentication, and security which must be resolved before blockchain’s potential can be realized at scale for social good.
The Beeck Center’s approach to thinking through these questions is threefold. First, we are building a cross-sector community of stakeholders and thought leaders because we believe that this effort requires collaboration among sometimes divergent groups. Second, the community has helped us understand the key questions, considerations, and challenges to blockchain’s implementation especially for marginalized communities. Finally, we are developing an actionable framework for decision makers to use when implementing blockchain technology for social good applications. Our goal is to ensure that decision makers who seek to leverage the potential of blockchain also understand its inherent risks and have an actionable framework for mitigating them.
If you are interested in learning more or joining our effort, please fill out a general interest form.