Blockchain for Social Good with Microsoft and the MIT Media Lab

| Matt Stempeck

Livestream generously provided by Joly MacFie of the Internet Society New York. This is a liveblog so please let us know if there are any corrections.

We’re here at Lower Manhattan Headquarters to talk about potential applications of the blockchain for social good. John Paul Farmer of Microsoft New York introduces the Media Lab’s new Digital Currency Initiative, and specifically Chelsea Barabas and Brian Forde. Brian got interested in the blockchain while working together with John at the White House. Brian wrote the blockchain memo that the President read.

Brian notes that when we think about Bitcoin and the blockchain, people often think of financial institutions and currencies. Tonight, he seeks to broaden that conversation. The internet was built for email, but clearly there are many other applications.

Brian’s Four Levels of Bitcoin knowledge:

1. It’s crazy. Why would you want digital Monopoly money?
2. Wow, there are crazy interesting smart people talking about this technology.
3. Oh, I get it, this is interesting, I want to learn more.
4. Nirvana.

Tonight, we’ll seek to pique curiosity. We don’t have a killer app for the blockchain yet.

Bitcoin 101

In the Fall of 2008, Barack Obama was elected president as Wall Street crashed. And Satoshi Nakamoto published a little-noticed whitepaper about Bitcoin, a peer-to-peer electronic cash system.

Brian explains that the blockchain eliminates the uncertainty of sending digital assets by providing confidence that the resource hasn’t been duplicated. It’s a public ledger of debits and credits, not just for money, but for assets, as well.

The blockchain creates peer-to-peer trust without intermediaries. eBay, Airbnb, Uber act as third-party brokers of trust, built on reputation systems. With the blockchain, we don’t necessarily need these third parties involved in our transactions. The blockchain includes the full “eBay stack”: Money, identity, reputation, and a marketplace.

The Digital Currency Initiative is brand new, but it’s working on research, social impact, and inclusion. Two of the five senior developers behind the Bitcoin core code have joined MIT, gaining academic independence.

We lost $15 billion a year to physical theft, and $24 billion per year to identity theft. We’ve been working much longer to protect our physical assets than protecting our digital assets, and it shows.

Brian shows an image of a Ukraine protester holding a QR code on the news, giving people from around the world the ability to instantly transfer $15,000 to his account. The internet exponentially increased our ability to communicate, and Brian expects the blockchain to do the same for our number of transactions. Brian recently held a Bitcoin workshop in Iraq, and was impressed by innovative ideas thought up by people who don’t have the ready access to more developed nations’ financial products. He expects the most exciting innovations to come from places where people can think more creatively about financial tools.

Chelsea is head of social impact at the Digital Currency Initiative. Prior to this, Chelsea was a student at the Media Lab’s Center for Civic Media. She finds the blockchain compelling because of the broad set of use cases in which it can be useful.

The blockchain’s traditionally been considered primarily as a currency. But we can alsol consider it as a technology for storing files of any nature. These include a photo of Nelson Mandela, ASCII art, and Satoshi Nakamoto’s Bitcoin whitepaper itself.

The blockchain provides a distributed database maintained by thousands of computers around the world which can verify the public log of transactions. Its strength lies in its distributed, decentralized nature. No single authority can easily alter the record.

Recent years have displayed to us the importance of citizens owning tools of media production — consider the death of Walter Scott at the hands of the police. The blockchain could be used as a canonical media notary in court: it would verify that video files hadn’t been changed since they were recorded.

A more complicated social good application of the blockchain would be to use it to distribute welfare resources. The government’s distribution of welfare checks looks a lot like it did 100 years ago: people standing in line at a physical location. The Initiative is in conversations to consider how to better achieve the goals of welfare by using the blockchain: reduced administrative costs, stronger verification, and improved auditing. Of course, other options offer benefits, too. An SMS-based payment system like M-PESA could work.

The great minds at MIT have become very interested in the blockchain. The Digital Currency Initiative is drawing on this community, as well as outside partners and even governments who deliver services to the public.

The team sees two roles to play in developing social good applications of the blockchain:

1. Collaboration to develop holistic applications of blockchain technology
2. Provide a forum for critical conversation about the risks and complexities of integrating this technology into our current institutions and systems.

$800M has been invested in digital currency technologies

Peter Kirby compares the blockchain’s immutable ledgers to a big wall of bricks. It’s really hard to change the bricks at the bottom of the wall when there’s a mountain of bricks on top of them.

The Honduran government is looking into using Bitcoin for land titles. All of the land value in the nation was sitting on paper title records. The World Bank funded the digitization of the records into a database. Bureaucrats got into the system and started giving themselves beachfront property. The scandal took down the administration, and the new powerholders promised tamper-proof records. Enter Bitcoin.

The transparency of the process also opens up attorneys’ work and legal descriptions.

Peter is President of Factom, a data layer which lets you tie chains of chains of chains together.

Hernando De Soto refers to the land title records as “$9 Trillion in dead capital.”

Ann Kim at IDEO is a Public Sector Portfolio Lead in their Cambridge office. This summer, the company has organized the Bits & Blocks Lab, an incubator looking at the potential opened by blockchain technology. They’re bringing their famous human-centered lens to the blockchain, looking at where it might fit naturally into existing behaviors.

The Lab hosts 6 teams of 25 design entrepreneurs recruited from Boston and Cambridge universities. They spend a lot of time out in the community learning how land titles and other systems work.

Some of blockchain’s features that they’ve honed in on: peer to peer exchange, frictionless transactions, and digital scarcity.

One prototype was a donation tug of war, where your contribution tipped the scale in a debate. Another asked $0.25 to see a funny photo. Other ideas include frictionless donation widgets in news articles, and physical donate buttons on household appliances. We could donate to a physical object, like a shared bike, communally paying for its upkeep.

Potholes are a common pain point in Boston. The teams began to think about civic infrastructure, like bus shelters. Change is often the result of a single tireless advocate who gets the ball rolling. Cities rarely have enough data about citizens’ desires. How might the blockchain aid these patterns?

IDEO articulates opportunities as “How Might We” statements. How might we better connect public resources to public needs?

The Dandelion Prototype offered passerby the opportunity to weigh in on the design of a new playground.

CityCoin came up with the Cambridge Coin. Each citizen would be allocated a certain annual number of coins, conveying the ability to vote toward various projects and causes throughout the city.

Their goals are to enable frictionless exchange, encourage dynamic participation, and integrate mechanisms for accountability. You can follow their work at #BitsBlocks. Brian describes it as “SeeClickFix meets Participatory Budgeting”.

Ryan Shea of Onename is interested in how the blockchain handles identity. Hundreds of millions of people around the world lack identification papers for various reasons. And yet IDs are required for many of society’s most critical transactions.

Ryan refers to identity in the US as “authentication theater”. We use numbers provided by the government for the purposes of authentication, but they weren’t really designed for these purposes. The result is that we use personally identifiable information to identify ourselves, and lose $25 billion annually in the process.

With the blockchain and some cryptography, we could establish that a certain person made a certain statement at a certain time. This would give us the ability to create self-issued ID documents on mobile devices and printed cards. Governments would be able to validate the ID.

Here’s how Onename’s ID generation process goes: To generate a digital blockchain ID, you would download a desktop or mobile app to generate your numerical key, which becomes your pseudo-anonymous identity. Then you fill out a form and digitally sign it with your pseudo-anonymous identity and place it in the blockchain. You link your user name on the blockchain and link it to this identity, giving others the ability to verify your ID. And finally, you take a photo of yourself with the name of your ID.

Once this is all in place, your university or the Department of Motor Vehicles or Social Security Administration could sign on top of the existing self-issued ID. Onename facilitates this process for users and departments. Their goal now is to get more institutions validating these IDs and making them commonplace.


Q: The public sector isn’t very efficient, but they employ a lot of people. Many of these solutions would eliminate many of these jobs.

Brian: There’s a great book called The Second Machine Age arguing that when you replace the jobs that can be replaced by technology, it often frees humans up to do more interesting things.

Matt Harrigan, Grand Central Tech: The applications might work, but our political system is broken and half our government doesn’t believe in climate change, so how would we expect them to adopt these highly functional systems?

Peter: Step 1 is build the tech, steps 2-10 are to change the political environment to encourage their adoption. In many of the applications we think of it as small, cheap experiments. We’re running it in one small city in Central America. With one small experiment, you can demonstrate its value and give legislators something to latch on to, when they see it’s been done better, faster, cheaper. It won’t be a US election on the blockchain, it will be a small municipal election, which will give leaders more time to grow comfortable with the technology. And that’s a good approach to social change in general.

Benjamin Dean: We can’t ignore the structural dynamics that are there. There’s potential to game the inputs that go into the blockchain.

A: We call the inputs problem the problem of “garbage in, garbage out.” We need technical as well as social safeguards.

Tags: , , , , , , , , , , , ,