Yesterday we had an interesting @FrontierTechHub Next Steps session with @FCDOGovUK colleagues on "using blockchain to make an impact". As well as ourselves @Disberse, we had representatives from @Datarella (Germany) and BenBen (Ghana). We had some thoughts! (1/?)

We'll be publishing a (very) short paper on problems in international #aid flows and the role of #blockchain, in the next month or two. But the short version is that over 4 years we became increasingly sceptical about most of the use cases cited for blockchain in aid.

Those of you that have been following us will know that my journey with blockchain started over 5 years ago, when I published my AidCoin paper. I'd been on the fringes of crypto/blockchain for a few years already, but that paper sketched out my thoughts https://paulcurrion.medium.com/introduction-513f86ed92df

The most recent piece I published was the final article about our work with @FCDOGovUK on a simulation that demonstrated that our (blockchain-based) platform could do exactly what we claimed, at scale https://medium.com/frontier-technologies-hub/on-the-right-track-6ee77f8b15bf

Sadly we've decided to close @Disberse, but even if we had continued, our trajectory was clear. Blockchain at the base (data storage and transaction management) in the short term, and blockchain spread on top (distributed governance mechanisms) in the long term.

And in the middle of the architecture, and in the medium term? Nothing. Blockchain either wasn't appropriate or wasn't necessary. Strictly speaking, you could get remove it from the base and still maintain functionality. (For example, we separated all PII from the blockchain.)

The problem is: most use cases in blockchain for aid (and to be honest, in many other fields) happen in that "middle of the architecture" space.

If you're thinking of using blockchain, you need to ask the question: what benefit is it? And does that pass cost-benefit analysis?

Honestly, it's not enough to say that blockchain is a "trust machine" for relations between disparate stakeholders. You're not removing trust; you're asking clients to trust a piece of software that they barely understand, rather than an individual or an institution.

BUT since they don't understand the software, what you're really asking is that they trust you - the expert / consultant / start-up company - when you tell them they can trust the software. So it doesn't create trust, it simply displaces trust and adds another layer of relations.

One of the things we emphasised that @Disberse had an electronic money license from @TheFCA - we were a regulated company under UK law. So even if you didn't know us, you can have some confidence in us as an institution (if you have confidence in the FCA, of course).

And this is critical. People *want* to trust institutions because it simplifies their work. It means they don't have to go through so much due diligence; they don't have to independently research the technology; they can move the working relationship forward more quickly.

We didn't discount blockchain completely. We still believe that blockchain could play a key role as the infrastructure for distributed decision-making that is going to be essential for changing the power dynamics within aid, to make "localisation" reality rather than rhetoric.

What that means is *creating new institutions* with blockchain as infrastructure, not expecting blockchain to substitute for institutions. And even this relatively simply goal still needs a lot of work, because most blockchain experts are not governance experts (understandably).

The call with @FCDOGovUK yesterday had a lot of people asking the same questions that we've been hearing since 2015: what about cryptocurrencies? Can this be used for criminal purposes? How many institutions are actually using it? How does it work, actually?

These are not stupid people. But these are questions FROM 2015 and they shouldn't need to ask them in 2020. By this point they should be dealing with institutions that they can trust, so they can just ask the real question: is this technology actually going to be useful for us?

Is this technology going to be useful? Maybe. But blockchain proponents have to wake up to the fact that they need to do a lot more work if they want their technology to actually be used by institutional actors. And by "a lot more work" I mean building their own institutions.

If you're thinking about using blockchain, ask yourself if you could implement your project without blockchain. If the answer is yes, then why are you thinking about using blockchain? And if the answer is anything other than "decentralisation", it's probably the wrong answer.

I don't mean to undermine projects which are testing blockchain for aid (although I have questions about ethics in experimentation, which I'll write about soon). These are smart people with good intentions who believe in what they're doing, and at least they're doing something.

But we need to ask much harder questions about claims that are made for technology - not just blockchain - and make sure that we test those claims against the right metrics. I'll end this thread here, but thanks again to @FrontierTechHub and @FCDOGovUK for the meeting yesterday.