Wolfgang Spiess–Knafl (agency Next Generation Impact) - Blockchain and social impact

1. Ljubljana, November 2017
Blockchain and
social impact
Wolfgang Spiess-Knafl

2. November 2017
Setting the scene
Trust and information asymmetry
2
| Social enterprises are different to traditional enterprises in a number of ways:
| Often embedded in local contexts (stories, culture, heritage)
| Impact management is more than revenues, profits and number of clients
| Trust is a key to the success and achievement of social goals
| This session is intended to discuss possible applications of the blockchain
technology.

3. November 2017
Blockchain
Headlines yesterday
3

4. November 2017
Blockchain Technology
Some introducing remarks
4
| Bitcoin is an application of the blockchain technology. It‘s one digital currency
with a market cap of $120 billion (as of yesterday).
| Ether is another digital currency and has a market cap of $31 billion and
Ripple of $8 billion. Even the 90th largest cryptocurrency has a market cap of
$53 million (FairCoin).
| There are between 200,000 and 300,000 transactions per day on the Bitcoin
network.
| Most notably Ethereum allows the creation of decentralized applications
(„smart contracts“) in addition to the cryptocurrency (Ether).
| It eliminates the need for intermediaries such as bank (think of the cost for a
transaction to Venezuela).

5. November 2017
Basic components
Hash functions
5
| A block header yesterday evening was as follows:
| Example of a hash function (taking a string of an any length and encoding it
into a digital fingerprint)
My name is Wolfgang.
52ab9e7c762a9bfd6cd7
092baf6953bf
hash
"000000000000000000cbabc51f47ba13baaa8fbd1c5b0fdd6
12e946841dade0e"
time 1510769697
block_index 1635795
height 494497
My name is Wolfgang
87dda8acd7c50c579431
ea82c28380e3

6. November 2017
How does it work?
Transactions and blocks
6

7. November 2017
Basic components
Private and public keys
7

8. November 2017
Basis components
Mathematics behind it
8
1. Bob chooses two very large (distinct) prime numbers p and q;
2. n=pq, m= lcm {p−1, q−1} (lcm is the least common multiple );
3. Bob chooses r, where r>1 and r is coprime with m (i.e. r and m have no factors in common);
4. Bob then finds the unique s such that rs≡1(modm)
5. Bob now tells everyone what n and r are, but does NOT say what p, q or s are.
6. Alice wants to send the message M (a single number) where M and n are coprime and 0<M<n.
7. Alice finds Mc, where Mc≡Mr(modn), and sends the message Mc to Bob.
8. Bob receives the message Mc from Alice and decodes it.
Now Bob knows p,q,m,n,r,s, and he uses these to decode the message Mc from Alice so as to find M. To
do this Bob uses the theorem that (Mc)s≡M(modn)
In the following example we use small numbers so that you can work through it using a calculator. In
practice the numbers would be very big.
Taken from https://nrich.maths.org/2200

9. November 2017
Cryptocurrency
Couple of cool projects
9

10. November 2017
Smart contracts
What are they?
10
| They combine asset and money transfer in the same environment.
| Examples could include:
| AirBnB rentals
| Car sharing
| General ownership rights
| ..
| Basically, they combine if-then rules. If something happens, then somebody is
paid with a specific amount of the cryptocurrency.

11. November 2017
Smart contracts
What are they?
11

12. November 2017
Blockchain
First conclusison
12
| We have a distributed database which is impossible to manipulate.
| We can store information.
| We have a cryptocurrency to store value.
| We can have contracts (if-then rules) on the blockchain.

13. November 201713

14. November 2017
Cryptocurrency
Building Blocks – Refugee Camps
14
| WFP is currently piloting a larger, more robust version of the blockchain
system in Azraq Refugee camp in Jordan. Currently, more than 10,000
Syrian refugees redeem their WFP provided assistance on the
blockchain-based system. As a result of this pilot, WFP will have a full, in-
house record of every transaction that occurs at a particular retailer, ensuring
greater security and privacy for our beneficiaries as sensitive data does not
have to be shared with third parties such as phone companies. This allows for
improved accounting and the reduction of third-party costs.
| Originally scheduled to end on 31 May, the pilot has now been extended
indefinitely. WFP will continue to explore use cases beyond cash-based
transfers and potentially expand the use of blockchain technology to areas
such as digital identity management and supply chain operations.
| For the pilot in Jordan, we integrated with the existing biometric
authentication technology IrisGuard, which allows refugees to identify
themselves with the blink of an eye.

15. November 2017
Cryptocurrency
Supply chain management
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16. November 2017
Cryptocurrency
Supply chain management
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17. November 2017
Cryptocurrency
Governance system (e.g. crowdfunding)
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18. November 2017
Cryptocurrency
Donation tracking
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| Donation can be tracked and paid out in

19. November 2017
Cryptocurrency
Donation tracking
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20. November 2017
Cryptocurrency
Micropayments
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| f

21. November 201721

22. November 2017
Blockchain and social impact
Other ideas (not yet developed)
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| Fully-automated charity
| All kind of remittances / cash transfers
| Asset (stored in blockchain such as music rights or patents) donations
| Supply chain transparency
| Community organizing
| Community organizing in repressive regimes (anonymously)
| Whistleblowing / compliance

23. Dr. Wolfgang Spiess-Knafl
NGen Impact GmbH
wolfgang.spiess-knafl@next-generation-impact.com