Key Highlights
- As of December 2018, UNICEF has invested into six blockchain companies in five countries
- UNICEF now accepts cryptocurrency donations and allows donors to easily mine cryptocurrency just by visiting their donation site
- Across UNICEF’s projects, blockchain technology is being used to improve traceability of donations and to better track outcomes of donated funds
One of the most prevalent fears among crypto-skeptics is that blockchain can be used as a tool for money laundering. Ironically, organizations like UNICEF have used its potential to reach out to the global community and make a positive impact.
Christina Lomazzo, Blockchain Lead of UNICEF Innovation Fund and her colleague, Hubert Charbonneau of UNICEFFrance, accept and maintain their holdings in crypto because of its potential for helping children. When donations are sent through a traditional fiat currency, it is easy to lose track of the money and often, little certainty of whether the funds reach the beneficiary.
Lomazzo provided a very clear example of how her team is testing internet connectivity speed through Project Connect. They found a high correlation between disease and disaster (pegged as vulnerability areas) and lack of internet connectivity for communication. According to Lomazzo, blockchain can play a role in bringing schools online to help verify telecommunication providers are delivering the internet speeds that were paid for. By placing probes in the schools, there is little possibility for malicious actors to interfere.
UNICEF Australia has even made it possible for the average internet user to allow their device to become a node, a device on the Blockchain network, to mine cryptocurrency by harvesting the excess energy of the device. Simply be visiting the The Hope Page, anyone can donate to the organization without dipping into his or her own fiat wallets.
For organizations like UNICEF, blockchain is invaluable, as it allows all parties, the donor, NGO, and recipient, to transparently see where the funds go from beginning to end.
Full Transcript
Hello everyone. Angie Lau here, Editor-in-Chief of Forkast.News. And we are in conversation live in Paris, or actually just live to you right now, for those of you on here watching and listening, this is Forkast.News.
We know that blockchain technology has a potential to change the world and we are reporting on blockchain, crypto and DLT in language that we can all understand.
We are in Paris. This is Station F. This is actually one of the biggest startup campuses in the world. And we are here for Blockchain Week, Paris Blockchain Week.
Sitting alongside me right now is Christina Lomazzo, she leads UNICEF Innovation Fund. And this is the first financial vehicle of its kind, really at the United Nations that really takes a look at blockchain technology and its use cases in the real world. We’re going to learn a little bit more about that. And sitting alongside her is Hubert Charbonneau, her colleague from UNICEF France.
And Hubert and UNICEF France actually made some headlines last year because you were among the very few at the UN to accept cryptocurrency as part of donations and really thinking about how cryptocurrency can have a real world application uses that benefits humanity. So, I want to welcome you both, Thank you for joining us. Christina, I want to start with you. UNICEF Innovation Fund. UN has actually been in blockchain since 2015. It’s evolved into what is now a VC fund that seeds startup projects in blockchain. Tell us about that. 0:06
Yeah, so our team has been exploring blockchain technology for quite a number of years. It started off with some folks on our team who are interested in the technology doing some projects back in 2015, which failed from the get-go. But our team stayed on the path of blockchain … had a quite small team, for the first little while … one-man show. And now, we’ve ramped up our team as we’ve started to invest in blockchain startups.
So back in December, we had investments into six blockchain companies in five different countries, that was our first big cohort of blockchain companies in our portfolio, and plan to do another later this year.
Ok, so you essentially started from in-house application of blockchain. You failed. But failed in the terms of it, inspiring you to recognize the implications of what it could be if it’s succeeded. So, you iterated like all startups, that’s ok, that’s ok. You think the power, now is actually working with teams who are looking at applications around the world? 2:35
I would absolutely agree with that. We have a mission of working and engaging local teams to build local solutions and that’s both through our venture fund, which invests in emerging or developing economies into local teams. But also through our other activities such as a series called SURGE, where we’re going to different countries around the world, and teaching developers how to code blockchain applications. And doing hackathons with them where they get mentorships from different community members, different technical experts to actually build solutions to local challenges.
When you think about blockchain, you don’t automatically think about UNICEF or United Nations. You certainly don’t think about United Nations taking donations in cryptocurrencies. And that’s exactly what you did Hubert, why? 3:39
Well, actually we thought that accepting cryptocurrencies was a step ahead for us, and also it was another way to donate and to participate to what we can do in the world for children.
So, tell us exactly what you envision in accepting the cryptocurrency? What is it that you hope to achieve with it, and what is it that you’re really trying to say to the community? 4:07
Well, accepting crypto was a step for us because we thought that people can give us fiat when they want. When they give us crypto, they believe in something. They believe in the project itself. So, we believe that we want to keep that in the crypto themselves, in order for us also to promote the project and see how it goes, and how you can serve the children in the end.
So, I think one of the interesting things that you’re doing with cryptocurrency assets is you’re getting them … is you’re holding it, so you’re hodling it as they say, you’re holding it. So, number one, why are you holding it? Why are you not transferring it into fiat and maybe doing some treasury management? That’s number one. And number two, specifically what are you doing with these cryptocurrency donations that reinforce what’s happening in the blockchain community? 4:44
Yeah, so the first question is we hold them because we believe also in this kind of cryptocurrencies. Even if, of course, we don’t know where we are going. But also we believe that it’s not just money that we receive, it’s a kind of engagement from the people. And belief that the project is going somewhere and can help the children. So, that is why we kept them in the crypto themselves. After that, we have several projects such as one in order to use them in the end. And we also had a test with a bounty network in order to ask for everybody who wants to help them — help us improve our donation process and stuff like that.
I think one of the most interesting things is the fact that you’re asking the average person to participate in crypto-mining by simply becoming a node in the network. Ok, for a lot of people, it’s like … “What did you just say, what language did you just speak?”
But essentially, it’s as simple as what, Christina? How can people participate as they are doing right now in Australia and New Zealand, and potentially France? For the average person to actually just become a node, so that you could mine a crypto asset that become the tangible asset for UNICEF? 6:06
It’s even easier than becoming a node because setting up a node is complicated for the average person. And so, different national committees like UNICEF France and UNICEF Australia have set up these initiatives to engage the public in mining crypto through very easy mechanisms.
So, for example, UNICEF Australia has the Hopepage. And it’s as easy as opening your browser and going to the Hopepage Australia. And you can click “I’ll Mine,” and it uses your excess computing power to actually mine cryptocurrency. The crypto currency, you’re mining then goes to UNICEF Australia. So, simple as that.
It’s as simple as that. It’s as powerful as that. But let’s take a deeper dive right now. Ok, so we’ve talked about just high-level, the potential use cases of blockchain in all its machinations. You’ve got a lot of specific goals. You’ve got healthcare goals, education, identity, so all of that is fantastic. But I really want to talk about something that is critical not only to the United Nations or UNICEF but also World Vision, Oxfam, you name it. Some of the biggest NGOS in the world. And this is the one thing that I think everybody admits is a problem and that is when you donate, and the supply chain of your money is intended to go to at the end of the day, perhaps that one vaccination to go to that one child in a remote area halfway around the world.
How do you ensure the 100% efficient and whole delivery of that donation to that child. Versus what we’ve seen happen — which is mis-allocation of funds, misappropriation of funds, extortion theft, etcetera, etcetera, that sometimes it does not end up in the hands of the people who need it most. And instead, the warlord or other misaligned people within that supply chain. I’d like to talk about that and the potential of blockchain. How are you seeing those use cases right now? What is the potential for the UN? 7:27
So, what you just said is it’s difficult to solve because of the “last mile problem.” And what “last mile” means is as soon as there is an action that’s no longer on blockchain, it’s hard to track whether that vaccination was delivered or whether that — that’s a problem that’s existed for a long time — and blockchain is not a panacea. And it does not solve everything.
And so we’re seeing the combination of different technologies come together to make blockchain more powerful. Like IoT, devices with blockchain, tracking vaccines or things like probes that are able to track certain data to then put it on blockchain. A small prototype that we’re working on right now — and I’ll give you the small version of them — the big vision is, we’re working on testing the internet connectivity in Kyrgyzstan.
So, it’s important because we have a project called Project Connect, which is from our data science team and the innovation team. And they’re working with different governments around the world, to map all of the schools in various countries,. And not only map these schools, but actually map the connectivity speed of these schools. And while some people will just see a connectivity map, other people a map of where disease is going to spread or to be able to predict where disease is going to spread.
What do you mean, is it because it’s just a population center? What does that have to do with connectivity? 10:27
So, if you’re looking at a map and you can go to Project Connect, and look at the visualization. If you see a whole bunch of red dots, that indicates that there’s no connectivity at certain schools. And if you have a whole cluster in an area with schools that have red dots, that means there’s no connectivity in that area. And it’s very possible that because there’s no connectivity, they’ll be less communication in the event of disease or a disaster and so it’s actually a map of vulnerability.
And so, in certain countries like Kyrgyzstan, once they matched their schools and they saw connectivity speeds or lack of connectivity speeds, they actually committed to bringing those schools online.
So they saw a direct correlation of the fact that connectivity speeds mean that you are either connected in terms of communication. Who actually had access to connection or you did not, and if you did not, you were exposed to threats like disease and all of the rest that comes with lack of communication. 11:12
It also changes the education programming that you’ll be able to deliver in those schools as well.
So, they committed to a connectivity, they did it. Ok, and where does blockchain come in? 11:40
So, blockchain comes in. They’ve committed to bring these schools online. Once they’ve paid to bring these schools online, they’ll need to verify that the telecommunication provider is actually delivering the internet speeds that they’ve paid for.
And so we’re doing a very small prototype. We know even that the approach we’re taking is not quite scalable the way that we’re doing it, so we’re already looking at other options. But we’re putting probes into a few of the schools, and those probes are physical devices, that are getting plugged in. And they will take a real-time reading of the internet connectivity in those schools. They will write directly to a blockchain, so that we are actually able to see in real time what the internet connectivity speed is with no human intervention. And so there is no possible… but there’s limited possibility of malicious actors. I never want to say never — a limited possibility in terms of malicious actors.
We’re looking to solve that last mile problem that I talked about. And while at a small scale that seems quite insignificant. What becomes more powerful is when you envision Project Connect, and the possibility of clicking on a school seeing it has no connectivity. The map telling you that it would require, for example, just a ball park 10 ETH, to connect that school that you could then pay in crypto and in a few weeks’ time, go back and verify that the school that you paid to connect is actually connected and confirm the speed that that school is then received.
To have that level of detail and to be able to potentially at some point with blockchain technology scale that level of detail in a real-world way, is so powerful. There was a report a few years ago where some of the top NGOs in the world were reporting the loss of funds that it experienced. I think it was World Vision that reported within the years of 2009 to since 2009 for three or four years that it had lost a million dollars of donations.
That is unfortunately not the only example of what consistently does happen. Where does blockchain technology come into play? What is the potential of blockchain to be able to track it and just to make sure that those funds that were intended to go to good actually arrived there? 13:16
So it’s creating that chain of transparency that Hubert talked about where you see the funds coming in, and you’re able to see where it goes. So, is it to go and buy pencils? Is it to go and fund open-source projects?
You’re actually able to see where all of those funds are going and track it from beginning all the way to end.
Is this something that internally at the United Nations that this is a concern? 14:42
The tracking of funds? Absolutely it is. Increasing transparency in all of our work, frankly.
What are some of the examples maybe internally that it really kind of triggered this desire to make sure that there is immutability, where there is no doubt that those funds or that information is intact? 14:54
So, one of the country offices that we’re working with is Kyrgyzstan. And they’re actually looking to use blockchain around procurement and vendor payment. And streamlining that, and making that very transparent in terms of they’ve selected a vendor to work with — that they’re actually able to set milestones very publicly around how the funding will be released to those companies. Then publicly showing that those milestones have been met, and then issuing payment based off with that.
Ok, that’s really powerful, right? Because you’re actually… That is the one thing that people demand most which is… You say you’re doing this, but prove it, prove it, prove it. This is an opportunity to actually prove it. If Kazakhstan [Kyrgyzstan] gets this right, do you see that this could be applied not only in emerging or even developing, but developed nations? 15:43
Absolutely. I think we’re seeing a lot of that. Not just in the purely finance space, but also in the supply chain space. And we’ve seen that for a couple of years now, different companies and startups working on more transparency and processes and sharing of information among parties. So, most definitely, I think we’re going to see these types of use cases continue over the next little while.
And Hubert, I can ask you in France, what do you think the use of cryptocurrency is being viewed not only by the public, but also by governments and regulators? What’s happening in France right now when it comes to perhaps a higher understanding or adoption of cryptocurrency? 16:30
Well, first, a lot of curiosity from everybody to see the experience we led so far. But then again, of course, the traceability of the donation is something that we always look to, and that is in some way forcing the future of fundraising for our kind of organizations. Because you can see from the donors until the beneficiaries and goes, and what was the purpose of your donation.
And it is really ironic, isn’t it? For the longest time, and I think the narrative has been that cryptocurrency and blockchain, the fear around it has been KYC and AML, right? Know your customer in money laundering statutes that exist from the regulatory point of view, the fear that this can be used in clandestine ways, but here you are as an organization, the United Nations, really viewing cryptocurrency and blockchain as a solution, as a solution of transparency and to make sure that each and every dollar goes to exactly where it’s meant to go.
So I really applaud your work and thank you for sharing your vision and your time, and your hopes and a little bit more understanding as to what you’re doing in the blockchain space. And thank you everyone for listening, I really appreciate you spending some time with us while we’re here in Paris for Paris Blockchain Summit Week here. It is an incredible start to what will be an incredible week of lots of conversations, lots of incredible vision, and a lot of talent in this space as we give you a glimpse, a little bit of the future that is to come. Until next time, I’m Angie Lau, Editor-in-Chief of Forkast.News. 17:33
