Tackling People Generalisation Crisis Using Blockchain – A possible Nigerian Use case

When we look at each individual without thinking of him as a Jew or as a Negro, but only as a person, then we may get to like him, or we may dislike him, but he stands on his own feet as an individual, and we stand with him on an equal basis…. It is better to light a candle than curse the darkness.”

 – Eleanor Roosevelt the most Inspirational first Lady America ever had.

Those were the quotes of Eleanor ROOSEVELT, the most inspirational first lady America ever had, who forever redefined the office of the first lady of America and also fought for human right during the Great Depression and also spoke out against generalization and racial discrimination of the black Americans during and after her tenure.

This period has been the most trying times being a Nigerian after the Federal Bureau of Investigation (FBI) published a list of about 80 Nigerians involved with fraud of several Americans organisations. The most worrisome part was its connection with a globally recognized Nigerian who was seen to be a rising influential leader in the business world, gracing the front page Forbes magazine, interviews on CNN and BBC and also speaking at Tedx.

The bigger concern is the looming generalisation and new fear of dealing with Nigerians who were previously considered trustworthy. The big questions organizations might asking are; could Nigerians who were previously trusted still be trusted? Are there still trustworthy Nigerians? The answer to both is yes. While we believe there are many trust worthy Americans, the America still has very good and strategic systems which eliminates any motivation or opportunities for its citizens/resident to be fraudulent or corrupt. One of such successful system is the Social Security Number which tracks major life transactions/activities of its holders and sort provides a trust system which makes organisations comfortable to transact or issue credit facilities to SSN holders.

Several School of thought have advocated for adoption of the SSN system in emerging economies like Africa and Asia, the question is; could this solve the loomingly new wave of identity generalization issue Nigerians and Blacks are about facing?

Yes and No.

Yes, if it is further improvised with Blockchain (decentralized ledgers) considering our peculiarities.

No, if it is just mindlessly copied the way it is.

America’s SSN system would face myriads of setback in a country like Nigeria, I will share my reasons in the latter part of this article.

I have been privileged to be involved with some financial inclusion efforts in Nigeria (both campaign and technology-wise) for about 5 years now. I will like to lend some learnings from my experience which could be translated towards mitigating the generalization of the Nigerian Character. While designing financial inclusion products, I noticed that apart from poverty , education and accessibility to bank, one of the big issues inhibiting financial inclusion is identity. How can we digitise identity to ensure the unbanked easily gain access to financial services.

In order to fully understand the premise on which the SSN system, Blockchain and learnings from Financial Inclusion could help manage the looming generalization problem, it is best to understand the historical background of the Social Security Number System.

In October 1929, America experienced the most historic Wall Street Crash which triggered the Great Depression. Share prices at the New York Stock Exchange (NYSE) catastrophically collapsed bringing America into a 12 year journey of socio-economic uncertainty.

Tension and loss of hope spread like wildfire across the country, there was lack of confidence in the future of America as they experienced high level of unemployment, poverty, migrations, low profits, deflation, plunging farm incomes, stunted economic growth.

3years in to the depression, the crisis spurred political shifts which gave Franklin D. Roosevelt a record breaking landslide victory over Herbert Hover at 1932 election with an embarrassing wide margin making Franklin Roosevelt the 32nd President of the America.

Within his first 100 days as president, Franklin Roosevelt continuously held daily sittings with the congress, which culminated into several executive orders which ushered in his economic reform and recovery programs for banks, Security exchange, and farmers. The Franklin Roosevelt program was called ‘the New Deal’ and it was focused on 3 major R’s; relief for the unemployed and poor, recovery of the economy back to normal levels and reform of the financial system to prevent a repeat depression.

One of his successful intervention which exists till today is the Social Security System which gave birth to Social Security Number (SSN). These numbers were given then to Americans to track/identify retirement pensions, unemployment insurance and welfare benefits for the handicapped and needy children in families without a father present. .

Due to the abuse of the Child SSN tax benefits, an Anti-fraud tax reform was implemented in 1986 which fished out 7 million SSN’s assigned to non-existent children which were used by some to get huge tax deductions.

Presently, SSN is a 9 digit number issued by the US Government to US Citizens and eligible residence for a lifetime which is used to track lifetime transactions, earnings, bank accounts, life records, federal loans, public assistance, tax, obtaining of international passport and drivers’ license and several other usage.

Needless to say, SSN could be used to understand the major life activities of its holder, hence the government, agencies and private organisations are able to easily transact with its holder.

This 84 year old SSN system has aided in crime fighting and prevention. Hence holders understand that all their activities are been recorded hence they are motivated to always keep clean records as much as possible. SSN has created a huge level of trust among American people and organisations.

As earlier mentioned, the US has leveraged SSN system for 84 years and have gained some level of mastery in SSN systems such that it has metamorphosed into the defacto Identity system in the US, hence it shows the journey any developing economy would embark if trying to replicate SSN system as it is.

The only problem with the SSN system is that it could easily be abused by corrupt government and security officials. also identity owners has no level of control over their identity. Anyone who has one’s SSN could easily pry into holder’s privacy and try to steal the identity.

According to the Privacy Rights Clearinghouse, identity theft now occurs at a rate of about 400,000 cases a year — and that number is growing 40 percent annually. So you could imagine how rampant these demerits could be in a place like Nigeria.

One of the key innovations which the SSN system could apply would be the use of Self-Controlled Blockchain Identity technology which involves each citizen of a country having blockchain digital wallet permanently labelled with their SSN or Identification number, keeping records of various transactions/histories. Institutions or organisations they transact with would own blockchain nodes which will append/populate digital wallet with tokens to indicate transactional activities.

For example, Ngozi is issued a Digital wallet which carries her Identity number, she gets a job, her employers own a blockchain node which verifies her as an employ of that organisation and issues a token to Ngozi’s wallet, with details of Salary, pension, Insurance. Ngozi also acquires an educational certification, the awarding Institution appends a token on her digital wallet, She opens a Bank account, the bank appends token holding citizen’s financial status and credit score. Same applies to Government Institutions who award International Passport, drivers license etc.

The digital wallet would contain as much token as possible but the beauty of it is that the citizen controls the level of information he/she chooses to share with individuals/organisations. For example a money lending institution wants to confirm that a citizen earns up $100 monthly but actually the citizen earns $350, the citizen could easily authenticate using the digital wallet through his/her bank to respond with a yes or a no without disclosing the exact amount, same method could is used to redact information as citizen/DID holder deems fit. With solutions as this, businesses do not need to get letter of reference or guarantee in order to transact business as this process accelerates international business growth.

Self-controlled digital identity builds high level of trust as several communities issuers and verifiers keep records/transactions holder’s activities which could easily be accessed anywhere in the world depending on the level of access and information a holders decides to share. The decentralized systems cannot easily be hacked because any hacker needs to hack the various independent nodes at different locations.  A perk to this is that a Nigerian Digital Identity on a decentralized ledger could be used by any government authorities in the world to ascertain an individual character. Hence the self-controlled digital identity encourages cross border trust both online and offline. At our Financial Inclusion startup, we are testing this concept to help the unbanked and we believe this could further be scaled to help the Nigerian Identity generalization problem.

“It is better to light a candle than curse the darkness.”

 – Eleanor Roosevelt the most Inspirational first Lady America ever had

We need to consider that whichever ways the situation is handled will affect the lives of both the present and future generations of Nigerians and even the black race. It is non-arguable that there are millions of good Nigerians who has great value to offer to the world, hence it is important that other nations support while we fight this embarrassing culture that respects money over integrity, merit and hardwork. This is the root of poverty and corruption in Nigeria. The actions of few should not make nations start a generational discrimination that could deprive the world of the great talents and gift which Nigeria and the black race has to offer to the world. As they say we are better together. If the whole situation is properly managed the world would continue freely as usual for the betterment of everyone concerned as a nation and a people as we need each other to make an inclusive socio-economic impact.

If there ever was a nation where people have mixed blood, it is right here in the United States, and yet we seem to have remained a strong and virile nation….

I may have had greater opportunity and greater happiness than he has had, and fewer obstacles to overcome, but basically we build our lives together, and what we build today sets the pattern for the future of the world – Eleanor Roosevelt

Writer David Alozie, Founder, Disruptive Africa

First appeared on tekedia.com

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