USAID: All 43 Blockchain Charity Projects Studied Unwilling to Prove Claims

December 3, 2018 @ 9:48 am By Cali Haan

Three researchers at the United States Agency for International Development (USAID) say that of none of 43 “blockchain for charity” projects they studied were willing or able to prove claims the new tech is revolutionizing the sector as claimed:

“We found a proliferation of press releases, white papers, and persuasively written articles. However, we found no documentation or evidence of the results blockchain was purported to have achieved in these claims. We also did not find lessons learned or practical insights, as are available for other technologies in development.”

USAID is an independent arm of the American government, “primarily responsible for administering civilian foreign aid and development assistance.”

The budget for USAID in 2019 is $39.3 billion, earmarked to, “…help developing countries make progress on their path to self-reliance and prosperity.”

Earlier this year, three “MERL” researchers (monitoring, evaluation, research, and learning) at USAID, John Burg, Christine Murphy, and Jean-Paul Pétraud, set out to evaluate to what extent blockchains might improve upon regular data administration inside charities.

The plan was to present their findings at the 2019 MERL Tech DC 2018 conference on Sept. 7, 2018.

In particular, the team sought to determine how “blockchain(‘s)…unbreakable and traceable linkages between blocks of data…might…improve the efficiency or effectiveness of data collection, management, and use? What are the advantages of blockchain over other more commonly used technologies?”

Burg, Murphy and Pétraud initially found the promising claims that are common:

“We documented 43 blockchain use-cases through internet searches, most of which were described with glowing claims like ‘operational costs… reduced up to 90%,’ or with the assurance of ‘accurate and secure data capture and storage.’ We found a proliferation of press releases, white papers, and persuasively written articles.”

Unfortunately, the claims did not bear scrutiny:

“We found no documentation or evidence of the results blockchain was purported to have achieved in these claims. We also did not find lessons learned or practical insights, as are available for other technologies in development.”

Despite the fact that “transparency” is generally lauded in promotional materials across the “blockchain sector,” project purveyors could not or would not substantiate their claims for the researchers from the US government’s “premier aid agency”:

“We fared no better when we reached out directly to several blockchain firms, via email, phone, and in person. Not one was willing to share data on program results…”

Firms studied were reportedly not walking their talk:

“Despite all the hype about how blockchain will bring unheralded transparency to processes and operations in low-trust environments, the industry is itself opaque.”

“Blockchain” has been widely touted as a “revolutionary” technology that will “form the basis of the fourth industrial revolution.”

Espoused applications in charity/development uncovered by the USAID team include, “…land registries, humanitarian aid disbursement in refugee camps, and evidence-driven education subsidies.”

Attractive claims that blockchain can automate “trust” and make data “immutable” have long been criticized by early Bitcoiners with direct experience coding chains.

Massive token fundraises by Ethereum founders and the issuers of thousands of other tokens created on Ethereum and now several other blockchains have brought in billions of investors dollars to projects, which many say have largely been spent on marketing the technology long before it has proven itself.

Several private blockchain consortia, including R3, ConsenSys, and divisions of IBM and Microsoft, have also been courting the private sector for several years.

But after something of a corporate exodus from some of those projects, R3, for example, has moved on to courting business from governments, smaller banks and credit unions, and IBM has been piloting its blockchains in various charitable ventures.

Considerable hype of the technology, according to the USAID researchers, has led, “International development actors, including government agencies, multilateral organizations, and think tanks,…(to look) at blockchain to improve effectiveness or efficiency in their work.”

But following the study, Burg, Murphy and Pétraud, “…determined the lack of evidence supporting value claims of blockchain in the international development space is a critical gap for potential adopters.”

They also found what could be described as hypocrisy:

“Blockchain firms supporting development pilots are not practicing what they preach — improving transparency — by sharing data and lessons learned about what is working, what isn’t working, and why. There are many generic decision trees and sales pitches available to convince development practitioners of the value blockchain will add to their work. But, there is a lack of detailed data about what happens when development interventions use blockchain technology.”

From the USAID website

“USAID is the world’s premier international development agency and a catalytic actor driving development results. USAID’s work advances U.S. national security and economic prosperity, demonstrates American generosity, and promotes a path to recipient self-reliance and resilience.”
“The purpose of foreign aid should be ending the need for its existence, and we provide development assistance to help partner countries on their own development journey to self-reliance – looking at ways to help lift lives, build communities, and establish self-sufficiency.”

“Our efforts are both from and for the American people.”

“USAID demonstrates America’s good will around the world; increases global stability by addressing the root causes of violence; opens new markets and generates opportunity for trade; creates innovative solutions for once unsolvable development challenges; saves lives; and advances democracy, governance, and peace.”