Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Christopher Fabian & Shaun Conway: Unicef & Ixo: Towards More Transparent Humanitarian Projects

Episode Date: December 19, 2017

We’re joined by Christopher Fabian, Co-founder of Unicef’s Innovation Unit. We discuss how the global non-profit institution leverages innovative technology to solve real-world problems in humanitarian work. We explore the different applications of blockchain in the UN and Unicef, as well as the challenges we can anticipate when deploying these technologies in the developing world. Shaun Conway, Founder of Ixo Foundation, also joins the discussion as a startup working Unicef and talks about the value of a global reputation network for humanitarian projects. Topics covered in this episode: Chris’ and Shaun’s respective backgrounds A bit of background on the UN and Unicef Unicef’s Innovation Unit and Venture arm How Unicef evaluates the different technologies in the space (public, permissionned, etc.) The challenges faced when deploying new technologies in the developing world Unicef’s recent experimentation with an Ethereum smart contract Potential applications for blockchain at the UN and Unicef Unicef’s Venture arm and the types of projects in which they invest Ixo Foundation, their collaboration with Unicef and the value of a Proof of Impact blockchain network Episode links: Blockchain at UNICEF Christopher Fabian - Wikipedia UNICEF Ventures: Exploring Smart Contracts ixo foundation ixo foundation – Medium This episode is hosted by Sébastien Couture. Show notes and listening options: epicenter.tv/214

This is Epicenter, Episode 214 with guests, Christopher Fabian and Sean Conway. Hi, welcome to Epicenter, the show which talks about the technologies, projects, and startups driving decentralization and the global blockchain revolution. My name is Siddha Sanquichu, and today I'm doing the show by myself. Both Brian and Mayor were unavailable, so I thought I would bring you an episode here today about blockchain and humanitarianism. It's a topic that we haven't really covered very much. I mean, a lot of the topics that we have on the show and projects we have on the show are usually startups or for-profit entities or protocol projects.

But today, we're actually going to be talking a lot about humanitarianism, how blockchain can help in humanitarian projects. And who better to have as a guest than our two guests today, Chris Fabian, who is lead at UNICEF Venture. and co-founded the UNICEF Innovation Unit, and we'll get to talk a lot more to Chris about UNICEF Ventures and the innovation unit and the work that UNICEF is doing in promoting blockchain technologies as a means to improve humanitarian work.

And Sean Conway, who is the founder of the IXO Foundation, and IXO is an organization that is promoting an operating system for data-driven impact, especially in the humanitarian space. So thank you very much for coming on, guys. Thanks for having us. Great to be here. So as we often do with our guests, we like to sort of get an introduction and learn about your background in the space. So perhaps starting with Chris, tell us about your background and how you came into your current role at UNICEF. I came into it totally by accident. I come from sort of the world of tech startups and making things at a really fast pace.

And I somehow ended up in an austere 72-year-old international bureaucracy. But I think that a lot of the work that we work on in our team and that I did before was really about creating the space for new things that can fix really big problems. And so before I was at UNICEF, I was in Tanzania, and I had companies that looked at connectivity and access to information for profit. And I didn't really know a lot about what UNICEF was. But having now spent a few years in the organization, I think it's about eight now, I've found that we can actually have that same startup culture

and that same approach to solving problems using the technologies that we're all interested in, but do it at really a global scale. And I'm happy to talk a little bit more about the specifics of the work we do later in the episode. So how do you, I mean, I guess we can talk about this later in the show, but like, how have you found tried to bring this sort of startup culture

into a 72-year-old, very large, international, very political organization? I mean, I think it's a lot about resolving two different kind of orders of magnitude of problem solving. So like startup world works really fast and works really aggressively and likes to smash things. And international bureaucracies work really slowly at big scale and like to not smash anything at all. And so a lot of what our team does is try to translate that. And we build a lot of prototypes.

We build a lot of physical prototypes of things, which are actually software or data. We show those to people. We work with them. And we work a lot with partners. So partners of ours that are in the tech world can also show us what's coming. And I think we try to generally introduce those to an environment that is really not a risk-accepting environment. And we've had some successes and more failures. But it certainly gives us a scale of operation. UNICEF is $5 billion a year as an organization. It works in 195 countries,

and there are 12,000 people. That's 12,000 people who are nodes in our network now, who we use to find out about new things, to find out about hard problems, and who become our partners in building stuff. And that's a kind of really amazing scale to be at. And how did you become interested in blockchain technology? Accidentally as well. A lot of stuff happens by accident. We've got a great engineering team in ventures. And both Mike Fabrican and Kusai Jauda, who have been working with us on various software development projects, have been talking about blockchain and distributed ledger for a long time and then it's obviously like the dumb ones like me that just pick it up later we we try to

look at technologies for investments that are three to five years out in terms of kind of being out in production so about two years ago we did our first experiments with public blockchains and and they totally failed and i'll tell you that story because that's a lot of fun but we you know we got a sense that this was something that was moving and the way that our team evaluates potential areas of investment is by looking at industries that are at a hundred billion dollar market cap and and problems that can affect a billion people. So that's our sort of heuristic for what we look at. And is there something that's got a trajectory to that $100 billion?

And of course, three years ago, $100 billion seemed like crazy as a figure to talk about in the crypto space. It seems remarkably uncracy now. So we found that like with drones, like with data science, like with augmented reality, this is very clearly a set of technologies that we want to learn about work with and invest in. And we think that can actually possibly,

positively affect and infect the work that UNICEF does. Cool. And Sean, actually, so Sean and I met in Cancun over lunch, eating burritos and having margaritas, and he told me all about Ixo Foundation. I thought it was really fascinating project. And actually, it was Sean who sort of connected me to Chris. And, you know, Sean will be talking a little bit about the collaboration that they have with UNICEF, but we are going to have Sean on the show a little bit later and maybe in a few months, So to talk very much in depth about his project.

So, Sean, tell us a bit about yourself and your background in this space. Yeah, so I guess I've got a crazy path to here. I trained as a physician and I've worked for most of my career in international development and health. And I guess the real kickstart to that was around 20 years ago when the HIV-AIDS epidemic was really showing its head here in South Africa. So I was a young physician working in the government hospital services and was given a project to look at some statistics. And so with Excel spreadsheets, you know, looked at the estimates of what the epidemic was going to look like. And it was very clearly an exponential epidemic. And I got really charged up about this and thought, well, we need to do something.

We need to do something that's going to be an exponential response. and for me, the use of data to drive all kinds of development initiatives, whether that's to influence market prices of medicines or to plan out the demand for health workers, or right down to a patient level, sort of tracking over a long period of time, the clinical parameters that show whether you're having success or not in a treatment regimen. That was really important to me. And so I got fascinated by the use of data within development. And so all of my career has really really really been about venturing on data driven projects and data driven ventures,

including some nonprofits and and this latest venture that we've launched. So that's a good segue into XO Foundation. Tell us about about this project and one of the goals here. Yeah. So around four years back, I had actually taken a bit of a career break and was lying on a hammock in Sri Lanka, of all things. And a great internet connection there, 4G connection. And I was thinking about how to solve the problem of supply and demand within services that seem to always have an increasing demand and never enough supply. and the supplier is usually driven institutionally. And we've been working on models of care delivery and social support delivered through networks

of community agents. And the real challenge there is, you know, how do you collect the data? How do you incentivize? How do you move information around these decentralized networks? How do you govern the transfers of value and the information? And I was lying there surfing the web and saw some articles about Bitcoin

and sort of had this eureka moment and thought, well, wouldn't it be great if we could insert the information about the services that are being delivered into these transactions and transfer value and information of value and value of information? And this would give us some proof of impact. We could bring together financial accounting and performance accounting. And so I thought this was going to be really easy. This is four years back. We got the opportunity to test this out in some proof of concepts in early childhood development. And Chris, I guess, will explain the context of the UNICEF investment into what we were doing.

And over the four years, we've realized that we have a core set of standards and operating principles that we can draw on, that it become standards for the decentralized web. And I can talk about that in more detail. So we've kind of stumbled. upon a really exciting development in terms of core standards at a protocol level that can be applied across all of the impact space. And it's really about taking data and turning that

into assets that can be tokenized. So impact tokens. And I can talk about that a bit later. Absolutely. That sounds really fascinating. I mean, of course, one of the great benefits of blockchain is having some sort of traceability coming back to sort of an initial event. And if you can, like, it is if you can, if you can trace sort of source of funding to an impact, right, of like how we spend that money and the impact and the result of how you spend that money, then you use sort of the reputation system there, where, for instance, say, like a sort of humanitarian organization then has like, you know, proper reputation and credibility about how they're spending their funds and the actual impact on the ground rather than just,

you know, how much money they're raising or like how many people they're reaching or, you know, some sort of results that don't really have a whole lot of meaning. Yeah, so in this development space, the catchphrases are accountability and transparency. And there've been a number of initiatives over certainly the last decade really pushing accountability and transparency. And certainly blockchain technologies provide for this. But they also provide for more than that. There's the opportunity we see to create a new form of capital, a new form of economy, the impact economy,

which values the impacts that are being delivered through organizations that are making a difference in the world. And so when we start to count what matters and value what counts, we can generate new forms of economy. So as we all know, Bitcoin sort of came from nothing and now it's a hugely valuable part of the economy. Now, why can't we start to value impacts that are relevant to our sustainability and to our well-being as a society?

That would be very valuable. Indeed. So we'll come back to Izzo towards the end of the show to talk about your collaboration with UNICEF. So back to Chris, most people are familiar with UNICEF. I mean, most people have seen the little orange boxes, you know, next to cash registers and convenience stores or just retail stores. And like growing up in Canada, I remember seeing like UNICEF commercials on TV. And of course, like it brings up all these, you know, really positive things of like helping kids and in the developing world. But, you know, remind our listeners, like what is UNS as an organization, like this part of the UN, so maybe talk about that and also what are the goals of that organization?

Sure. So it's an interesting and complex place. And I sort of learn more about UNICEF every year that I'm there. I actually didn't know a lot about UNICEF when I joined. And so I came from this kind of world of fast-paced stuff. And I guess I had the same recollections you did, like something about kids and it was like a pretty nice organization. It wasn't mean.

Like UNICEF didn't do mean things. What I've learned over the last few years is that it actually does a lot more than just not doing mean things. UNICEF is the world's largest humanitarian organization for children. And when the organization focuses on kids, it really focuses on the most vulnerable. And I think that's one of the reasons that a lot of our team work in our jobs. Almost all of us come from the tech world. But there's a clear mandate in the organization to fight against bullies. And bullies can be physical bullies or system bullies, things that make the world unfair.

And by most vulnerable, we quantify that by looking at bottom quintile of people economically. But there are many, many types of vulnerability. economic vulnerability is only one. And so this is an organization that literally fights for the kids that are left behind that other people don't fight for. And I think that's really nice. That's something that we can all kind of get behind and we all feel good at waking up with that as a mandate. Specifically, UNICEF works with governments in 195 countries to create the right policies in

governments that make sure that kids are included, but also to take action. So we respond to emergencies. UNICEF responded to over 350 emergencies last year. That's about $2 billion of emergency supplies. And that means getting things to communities faster than anybody else, getting the right things there, and making sure that communities can rebuild. So our team was in Liberia during the Ebola crisis, which was the most scary, I think the most scary things I've ever done, working with communities there to make sure that information could flow, that kids could get information about handwashing, that we could know when schools were being closed and so on.

And that's the on-the-ground part of what UNICEF does. But the other thing that UNICEF does is at a system level, make sure that the right policies are in place for inclusion, for making sure that kids with different or disabilities kind of are able to be in a common space for learning and opportunity and choice. And we also buy a lot of stuff. UNICEF is the world's largest single purchaser of pencils, fun fact. But we also buy 34% of the world's vaccines. And that's important. When you buy that much stuff, that's a billion dollars a year of vaccines, more than a billion. When you buy that much stuff, you have the ability to move markets.

And this I had no idea about when I joined UNICEF at all. And what that means is you can sit together with the big pharma companies and make sure that there's fair, open, and transparent pricing on vaccines. That's incredibly important. So all of those three levels, the sort of programmatic work doing stuff, the sort of policy work and the financial work, come together and make a very nice environment for a team like ours, which looks at new technology. And you can imagine that we try to turn the gears of UNICEF's education or health system strengthening and turn them faster and by using those three levels. So making sure that we're building products on the ground with users, making sure we're working with governments so the right policies are in place to take those technologies. And then working with big companies to make sure they understand that there's a market, even in parts of the world,

that they might not consider their main kind of market. I like this idea of UNICEF fighting bullies wherever they, wherever they appear, whether they be corrupt governments or corporations or illness or male nutrition, those are all the bullies that UNICEF goes out and tries to fight against by implementing policy and getting people to change their minds about certain ways and ways of thinking, et cetera. So you mentioned that you worked in Liberia. What are some of the most impactful things you think that UNICEF is doing today? You know, aside from obviously delivering vaccines to people with illnesses that might end up killing

them or delivering pencils to kids that need them in schools? So I think that structurally, UNICEF is looking at the biggest weaknesses in systems. So the reason that people are poor because systems are unfair. And when you're poor, you don't have the ability to go to a good school. You don't have the ability to have action and to have an opportunity and choice. vector in front of you, you're kind of left behind. So I think the most important thing that UNICEF does is ensure that every kid, try to ensure that every kid,

try really hard to ensure that every kid has equal access to opportunity and choice. And I'll give you an example. So there are 55 million people who are children, 55 million young people who are on the move because of war or violence. That's inconceivable number. There's no way to make 55 million make sense to anybody.

So 55 million kids who don't have access to the things that many of us take for granted, a health system, a school, an identity. And so the type of work that UNICEF does with refugees is make sure that that five-year-old refugee kid has some semblance of normalcy, that they can go to a school, that they can be around other kids. And it's not only to be nice. It's also really important to society. When you have imbalance, when there is unfairness and inequity and inequality,

societies come apart. And you can see this in the world today. You see the strains of inequality everywhere. And this is how a dialogue that could be very condensed and connected has become very polarized. And so I think when UNICEF works with refugee populations, for example, we not only make sure that there are systems to give kids health care and vaccines, but also that those kids, once they get the right nutrition and the right education, have some access to opportunity, have some idea of how to be part of the world. And that sounds very lofty, but I think it's really important. When we were in Liberia during Ebola, there were these, there's a group of 14, 15-year-olds who were in the most hard-hit part of Monrovia.

There's a peninsula in the city that had been really cut off and quarantined. And we met them after, we got there in November, I think, the end of October. We met these young people who were literally going door to door with notepads and asking questions of households in their neighborhood and telling information that was important to other young people to adults saying, you know, don't wash dead people and things like that. We worked with them to build a system, and I can talk about it a little bit more, but we worked with, we were like, okay, so you guys are the heroes of the Ebola outbreak. You are literally in the most difficult places. It was 45 degrees. It was muddy. They were walking around

with boots, you know, rubber boots on and these pads of paper. And we worked with them to build up a system so that they could use their phones to SMS in that information more quickly. I don't think that there was any genius in that. We literally, literally looked at people who had a brilliant idea, but maybe not all the access to networks and things that we do, and helped them build something that made their job better, that made them create more balance in the world around them. Interesting. So there have been some, I guess the innovation unit then has produced some projects that have been valuable and have had positive outcome. I'd like to ask you then,

sort of you've been with UNICEF for a number of years now and sort of been in the humanitarian space. Do you think that the world is is tending towards less inequality? Like so like if you were to look at like results of actions, sort of impact that UNICE have had maybe 15, 20 years ago and the impact that is having now and sort of the result of that, do you see that we're moving towards an in, uh, an improvement an improved situation or is it staying the same? Is it degrading? I'm going to go with Jack Ma on this one and say that the next 30 years looks really bad for humanity. I think that you see aggregate gains. So UNICEF was started as the United Nations International

Children's Emergency Fund after World War II. My mother still has a blanket that my parents, my mom was a refugee. She still has a blanket from the version of UNICEF that existed then. That was, the organization was founded to respond particularly to children who were displaced after World War II. And the E, the emergency, was taken out of the name about 20 years later, because it's like this should be for all children. I think we see an aggregate good change in the world. Like on aggregate, things are getting better. But the divide between those 55 million refugee kids and us who have houses and infrastructure. is growing greater and that really worries me.

You have a country like Malawi. We've just opened the largest humanitarian drone testing corridor in the world in Malawi. 6,500 square kilometers, 400 meter vertical, incredible opportunity for young Malawi engineers and techies to work on drones. But Malawi has 18 million people. More than half of them are under 25 years old and the major economic hope for them is a coal factory that's being built.

So I really worry about that inequality, about the inequity that we see in front of us, about the fact that the technologies that are coming into currency in wealthier countries or wealthier parts of wealthier countries are built on disparity. The training sets we're using for modeling and are not fair. The genomic samples that we're using for building medicines are not fair. They're not equitably sourced from all of humanity. And that creates an inequity that doesn't necessarily appear at global statistics. like there are fewer big wars now, sure. But that really shows itself acutely in the places where there's the most weakness, the most system weakness.

And our team tries to address a lot of those things. Sorry, I know that's a more bleak answer than maybe one would expect. Hey, you tell the truth how you see it. I mean, I do sort of agree with you that as an aggregate, you know, we see less wars and like less massive extinctions of, you know, human population as we did. maybe like 100 years ago or even more recently than that, but that we do see growing inequalities amongst, you know, the most privileged people and those that are the least privileged.

And I think that that's something that we should all, that's a gap that we should all try to narrow. And I think that one of the ways that, one of the tools for that, maybe, you know, blockchain technologies, and we'll talk about how that can be applied. So moving to the more like the technology side, how much of UNICEF's resources and like the mandate of UNICEF generally, how much of that goes into developing new technologies for humanitarian reasons? So a lot of, I mean, UNICEF is a big, it's a five and a half billion dollar organization. Most of our money goes into kind of core work.

And for us, core is delivering services to the most vulnerable children. We try really hard not to fetishize technology or to make technology be the goal in itself. And so we don't have a huge budget. And our team has not ever wanted a huge budget. I think we do a lot by being kind of lean and aggressive and small and hungry. And so if you look at sort of how UNICEF invests in technologies, we are a, I mean, our regular resources, the funding that we took from Core UNICEF last year was like, you know, less than a million dollars, a tiny. and all the rest of the money that we use we raise through our venture fund and through other

mechanisms but we we invest in these early very high risk areas and as they develop as they become more sure unicef puts its organizational muscle behind them and an example of that is the work that we did with with SMS as a basically as a command line for international development so over the last eight years we've piloted prototyped and built systems for using a text message to send like very important information about health systems, how many vaccines are left in a health center, how many kids are in school on a given day, and to do that all on a basic Nokia 1100,

you know, like a phone that has nothing else that can stay charged for days, weeks. And so we basically built this operating system for international development that allowed us to do our job better, but also allowed us to connect with people like these kids in Liberia and hear from them in real time. And we put a bit of our investment into that.

We put a lot of our time into it. That's now an organizational priority. That system called Rapid Pro is a platform with more than 4.5 million active users. It's in 35 countries, 39 countries maybe now. And that's a platform that's an open source, cloud-based enterprise, SMS, and other information moving system. And that's something that is a core UNICEF priority. So now there are millions of dollars being invested in getting that into government,

scaling that up, working with new partners, and it's taken a life of its own. So I think that's what we try to do, is really create those early prototypes, build them to a point where they have some gas behind them and then get them out the door. The muscle of UNICEF takes it from there. And that's one of the reasons that a lot of us who are used to the fast-paced sort of world of startups and failing and crushing it and all of that kind of nonsense. It's one of the reasons that a lot of us are in UNICEF because we can actually see the extension of our work.

You can see when something's good, how it goes big. Did you just make an Ethereum pun there? I did. Projects with gas behind them. Yeah. I've got about like four of those and I'll reuse them. That's great. Okay, so I mean, let's dive into blockchains then and so the intersection between UNICEF and blockchains.

I'd like to ask you, given just what the space looks like right now, you know, there's been a massive interest in blockchain and, you know, public blockchains, especially in cryptocurrency in the last. in the last three years, but most notably in the last few months. How, and of course, there is all the permissioned and more private blockchain systems that we are seeing slowly but surely come into production and more of the enterprise space. How does UNICEF sort of evaluate the different technologies and the different types types of networks that exist in the blockchain space today? So we take the same approach to blockchain technology as we do to any of these other sort of areas where you have a large market force behind a technology and the potential

to solve big needs. So other areas that we look at in analogous ways are drones and UAVs, data science and machine learning. So these are areas that are all kind of buzz-worthy and buzzworthy that some people really believe in. Some people think that they're going to solve everything. Drones will be delivering everything. Some people think they're totally useless or scary or dangerous. And there's a whole bunch of people in between. So anytime we have a technology space and blockchain is one of them, we try to principles. And these are the UNICEF principles of innovation. They're online.

We created them after many, many failures. And they just make us, we don't fail less, but we fail in less stupid ways. And these principles are things like design with the user or be open source or, you know, be data driven in development. So they're pretty basic, but they're a rubric that we use when we're looking at a new tech space. And so in the blockchain space, I think there is a lot of hype and I think there is a lot of potential. And I think actually CryptoKitties showed us that we're at a space where meet, you see the network inefficiencies and you see where things can go. Right. So we want to be careful of what we promise, but we also want to be sure that we're taking advantage of new things and making the world more efficient. There are three ways that we look at, we look at sort of public permissionless blockchains and distributed ledgers.

The first is that there's clearly a road for fundraising and for transactions coming into organizations that are doing good. We've seen this with the Red Cross. They're already using digital currency, accepting donations in ETH and in Bitcoin. We've seen this now that like yesterday the Pineapple Fund launched, so that's $83 million of Bitcoin. like 5,000 bitcoins that are available for charities and non-profits. So there's something that's happening in terms of resources and resource allocation. And if I were putting digital assets into an investment

to fix the world, I would want the transparency and the accountability that public blockchains bring. I would rather have that than just give a dollar and hope that it gets to somebody. So I think that we see an opportunity for a different type of engagement with people who want to fix the world. And we've had really nice notes.

We've got a public Ethereum wallet, and people have been just dropping little bits of ether in there. And we got a really nice note from somebody, just random guy. And he's like, listen, I put in like, I don't know, it wasn't very much then, but we're happy with it. It was like 0.1 ether. He's like, I did this.

He's like, I just want to be part of something that's fixing the world. I just like this feeling. Here's something. I think we need to understand that better. I think there's a lot that we can do to reshape the way that funding streams work development financing works and that's very exciting and it's very kind of macro.

The second level that we look at is internal and it's about reducing the friction inside of a big bureaucracy. How do we make sure that when we're paying a vendor or we're moving money to a government or we're moving money across offices that we have transparency, accountability and speed, how do we, UNICEF is a complex organization but we are represented by contracts, how do we make sure that our contracts are also represented publicly and intelligently. And so we're testing out in our office in Kazakhstan. We just did a hackathon on smart contracts for bureaucracy,

where we brought about 200 kind of crypto folks together. And we're like, here's an insane UNICEF contract, represent that, I don't know, in solidity. Or like, go do something with it. And they're like, wow, that really is an insane contract. If we can start to describe those things publicly, we can bring them into the global view, and we can optimize them. And then the last area that we look at is direct investments

into early stage companies. So like the company that we invested in that Sean ran in South Africa, companies that are using crypto technologies or blockchain technologies to try to fix something. And we have a small venture fund that allows us to make directed $100,000 investments of capital, non-dilutional capital, into these kind of companies that are really trying to solve acute problems with distributed ledger. And that for us is creating a portfolio of opportunity. Those are high-risk investments for us.

Our investors know that. But that's where we also get to see things in action, things failing and changing and turning and twisting. And that's the venture part of our work. Okay. So if I just recap then, so there's sort of three levels of how you evaluate this technology. The first being looking at sort of public networks and so the applications that we're

starting to see emerge there, one of which, of course, being funding. And in your case, the benefit there is having that sort of transparency. You mentioned having a multi-sig wallet so people can donate funds. And like there's a sort of an audit trail there of like what funds are being donated, everybody can see it. And then potentially at some point in there you can sort of plug in another system where you would have like proof of, proof of impact or something like that, right? Like that's publicly visible and sort of made available for everyone to audit. The second would be sort of improving streamlining internal processes and procedures within the organization.

This is sort of an area that I'm very much interested in because my company, does this for enterprise. So I like this idea, right, of being able to streamline through sort of more consortium blockchains and being able to automate certain number of things within an organization. And the third then would be investing in innovative technologies and identifying opportunities through the venture arm. So if we, if we, because we are going to talk to Sean about about his project and touch more about the venture on a few minutes.

But coming back to the two first layers, so public blockchains and the consortium networks, I have this idea running around my head for quite some time now, a couple of years. And I think that it would be interesting to consider, as a thought experiment, a sort of public consortium blockchain that would be run by nonprofit organizations. for the purpose of improving transparency and accountability within all those organizations. So take UNICEF and like Doctors Without Borders and like Red Cross and just take like the top 100 humanitarian nonprofit organizations in the world and have them be validating nodes for something like a tenderment blockchain and have that platform.

be the basis upon which you can then build all types of applications. So one of them could be like funding, right? We want to have transparent, traceable, accountability in funding, and we want to have a system upon which we can do that. That scales at a high level where it runs globally, is compliant across the world, right? And like we can build this on this platform. And then take another application.

I don't know, like voting, governance. who are the board members of these organizations? How do we elect people on the ground, like local offices and things like that? Is this something that is conceivable today? Because I feel like, at least for now, for the next couple of years, public blockchain infrastructure, such as Ethereum, is not going to scale. I think Vlad Zamfier just put a tweet yesterday actually saying that nothing's in production, nothing's close to being in production.

and deploying a consortium blockchain within an organization is limiting to that organization when there can be just so much more that can be done. Yeah, what are your thoughts on that? It is not only possible, but there I think are notional artifacts now that show that it's probable and likely. So I think that there's a lot to be, you know, if you look at like fractional reserve development, So not everything needs to be on public blockchains. And I think one of the things that Sean did in the early days of our investment with Trust Lab was actually look a lot at a kind of dual or multi-blockchain projects.

We believe, I think what we're seeing from our experimentation and our investments is that we can create a network and we can use UNICEF's trust to validate parts of that network. And we have enough corporate partners and other development partners that would also be interested in being part of such a network. that could do a bunch of things. So I think the answer is yes. I agree that that's a useful and necessary and possible thing. And I would go even further and say that within that network,

which could be joint public and private, you could also use public blockchains to start using transaction records to create soft identities for people. You could start bringing in some of the large amount of charitable or human investment money that I mentioned earlier into that system. You could validate that, and you could probably

back that network fraction with something like Ether. So I think it's a very interesting idea to explore, and that's a type of conversation we're having with a lot of our partners, and we would be happy to hear from others who are interested in being in that space. Cool. So you mentioned this experimentation you did with an Ethereum smart contract, multi-sig wallet, and there was a blog post that we'll be linked to in the show notes.

Can you tell us a bit more about this experimentation, like what are the goals and what did you learn? Sure. Sure. So this was under the part of our job where we're like, let's just try this and really hope that we don't break anything too much. This was when we were, and this is, you know, considering Ether not as a currency, but just as a digital token, we wanted to see if we could as a large international organization, accept tokens from others and do things with those tokens. That was the premise of our work. We had a contact, and the crypto world is amazing and incredible. We had a contact from somebody in Switzerland who said that he was auctioning off some posters and that he would like to send us some ether from the auction.

We needed a way to be transparent about accepting those non-currency, non-valued tokens into UNICEF. So we created a nice kind of multi-sig setup with me and my fund co-founder, Sunita and Kusai, linking it to our UNICEF. identities which are publicly available and attributable. And we created the smart contract to actually accept donations from this auction and actually helped him build his side of the smart contract as well. And we set it up. I think we got two ether out of that.

And it was really interesting. It showed that we could do something. It showed that we could set up an Ethereum node on UNICEF architecture. That was nice. It showed that we could have a transparent way of receiving tokens, not funds, because to receive funds, We have to have our lawyers clear things,

and that's definitely not what we were doing. But also that we could do that in a way that was public and described and start to get public support from the crypto ecosystem. So it did a bunch of things. It let us play around. But it also started creating a buzz with the networks that we like that we were doing something new.

And so that wallet is still up. It's transitioned from being an experiment to actually being discussions inside of USF on what it would look like, on how you would create an asset class for cryptocurrency, if that was a donation, where you would put those assets, how you would value them, and so on. So it's really been that prototype of the future

that we like to build. And hopefully it's provoked enough discussion that it serves its value. We haven't moved any of that ether out yet. So that's something that we're going to be doing over the next few months is looking at what do we do with those digital tokens that are certainly not money and how we use them in a way that shows what a future of transparent investments

of non-monetary things could look like. That's interesting that you say that they're not money because I mean like in most jurisdictions, I think governments would consider, I know that in the U.S., for instance, you know, cryptocurrency is considered a form of currency. I was speaking of my naive view at the time that we set this contract up of how a digital token was valued and that I certainly, our team never went into it thinking that there was a financial implication behind it. Okay. I understand. Okay. And it looks like you've got like 2.17-Ether now and other tokens, like Datakoin, for instance. You've got five cents of those.

How many people keep spreading things around, right? That's the fun of an ICO is what I want to know. Okay. And so I'd like to bring the discussion, take a step back a little bit and talk about and talk about sort of blockchain adoption. as a technology evangelist, I think I would qualify you as, promoting blockchain within the UN, can you give us some insight about, you know, what response this has gotten? You know, how do people respond to this idea?

People are responding well. I think that, you know, the future is a scary place. So we try to evangelize with a sense of possibility and then also a sense of looming fear. And that's how we try to bring products into the limelight. Kusai is our blockchain lead. He is an incredible evangelist of the technology and has presented our work much better than I do at fora like the World Bank. So he presented his sort of senior World Bank leadership at the State Department, at various

UN venues, and at universities. And what I think we've seen from his presentations and the networks that we're building is that there is a sense of opportunity, a desire for direction, an interest in following the principles that we've set up, and an ability to do some quick, rapid prototyping in various organizations inside of the UN. I think that one of the things we're trying to be very careful of is making sure that we keep the direction towards public permissionless blockchains as much as possible. And that's really to keep lined up with our principles, which are very firmly rooted

in the open source tradition, but also to make sure that we don't put ourselves in a position, which we were in in the mobile and SMS space in 2009, where we had one company who owned a lot of our infrastructure or owned a lot of our data. So we're trying to make sure that we're creating that internal sense of possibility, but also keeping the market open, so that as different protocols develop on different blockchains,

we're able to be flexible and we're not locked into any one vision of the future. There are other organizations that are doing prototypes and tests of blockchain. We work together through the UN Innovation Network, which we co-chair with the World Food Program, and that brings together nerds from across the agencies to sort of share what we're doing.

And so that's kind of publicly documented. I think we'll be putting out our most recent report on what's the state of blockchain in the UN in a few weeks. I just saw a draft yesterday. Great. Can you expand on some of these experimentation? Is that something you can talk about at this time? Sure.

I can speak to our own failures better than anybody else's. So we started looking at using the Bitcoin blockchain, as a way of holding identity in the transaction, kind of hashing up an image and holding that as a person's identity. That was like two years ago. That was very expensive even then. And that was also our fumbling around with the concept of big online databases. So that didn't work, but we did some experiments with that.

And there's a lot of talk about like, oh, blockchain means identity. And it's like, you know, as we all know, it doesn't mean identity explicitly. It can mean identity if a certain set of conditions are met. But we tried with this very explicit identity. Like let's hold an identity on the Bitcoin blockchain. That was interesting but didn't work. We played around with the smart contract. We've seen that WFP is doing some things with private Ethereum nodes for refugees in the Middle East for kind of payments and a payment system there.

I think we're seeing a lot of interest in the smart contract side of things. So as I mentioned, our office in Kazakhstan is trying to describe some of its very difficult and complicated contract. intractual stuff in a way that could be publicly accessed. So those are the initial pointers that we see. And we're trying to document them and just learn from them. And those are all on unicefstories.org slash blockchain as much as we can capture them. And when you present these use cases and these are these experimentations internally, what kind of reaction are you getting from, you know, people that have been?

So I would say like in the more conservative. side of an organization like the UN or UNICEF? I mean, we've presented drones, you know, like as a way, oh, you could move health supplies with drones and had people say like, don't do that drones, kill people. I mean, so we're very used to this reaction. We tried, when we tried to bring SMS as like a data platform in 2009 or eight, we're like, don't use SMS. This is what we were told.

Don't use SMS. Use VHF radios. They're much better for moving data. So we're sort of used to the resistance of. of a way of doing things against the future. I think that the decomplicating the technology is important, explaining that this is not really that new in a sense, like databases, distributed databases have existed for a long time, and making very clear use cases of how this technology can be applied to ongoing work are

the three important things. Like if you say, do you want to use a distributed ledger to make your job better, I think people will kind of throw up their hands at that. If you say, I've taken the contract that you use for paying your partner in the government, and I've put it in a way that makes it faster and cheaper for you to do it. Here's how much it cost you before.

It used to cost this much for a transaction because of all the paperwork and the people and then, and now it costs you one-tenth of that. Here it is. Then they're like, wow, OK, I get that and I see how that can be applied operationally. So that's the process we follow with any technology. Like make it useful to the user, build it in a concrete way,

get rid of the jargon and the flash, and be boring. Like be super boring. A contract is a boring thing. That's great. Like I like being boring. And so I think that that gets more of a transaction happening, sense of transactions happening in the organizational lymphatic system,

the more boring and simple you are. I'll definitely echo that sentiment. To anyone who's explaining any of the technology, to anybody who's typically wearing a suit, try not to geek out about it. Just be boring. Just be boring about it. Don't mention Iota.

Don't talk about the tangle. Don't, don't mention Iota. And definitely, yeah, if you can show some sort of return on investment or show how this technology will make their job better or reduce operational frictions or reduce paperwork or the time it takes to do a certain thing, that's definitely a direction you want to take. But it is hard to find those key metrics that you can point to because of just this.

of where we're at right now, where a lot of this stuff is still experimental, we're not experimenting with real data, a lot of like parts of the stack that are still not, you know, quite there yet in order to bring things to production. So, you know, I think slowly it's getting to a point where we can say, oh, we've experimented and like we've been able to show that we reduce costs by X amount, but it's, it's taking a while to get that wheel turning. But I think what's like if, you know, if kiddies brought the whole thing down, if like 12 kitties per second brought the whole thing crashing down for a little bit,

that should tell us how humble we have to be. And I think it's totally fine to design for the future, and we try to do that a lot. But I think we need to be very explicit about that. We're creating a runway for the organization to be more efficient. It may not be this year. It may not be in the next 18 months. But at some point, these small experimentations and the investments we put into them will pay off. And I think we have to, you know, you can value future options in finance.

so you can do that. So I think if we consider blockchain like we consider artificial intelligence, which doesn't means less than blockchain to me, but those types of fields as potential future options, we can then be in a better position to talk about them, because we don't have to prove something right now. We can say this is the process of experimentation

we're going through. This is our hypothesis. This is what we think will happen. And this is the runway of time that we expect to see results in. But I do think that some of the very basic organizational descriptions that you can do through a smart contract will be immediately interesting to the people in suits. That's a nice thing. They like to see systems described. And I think that's where we're going to see the first real impact inside of the organization, which is awesome.

And our finance people are incredibly interested in this space. And it's great to be able to have discussions with people who know a lot more about money than I do where they're really part of the building process. And I hadn't seen that with the SMS technology. We didn't have that kind of alliance inside. Yeah, it is bringing together all of the different, I guess, like business units of an organization. That's what's so interesting, but also presents a big challenge with this technology, is that it doesn't only impact, like this one little corner of your organization.

It's going to impact your entire organization and the way your organization interacts in the broader ecosystem. And I think that's a sort of paradigm shift and an idea that is as massive, if not more, I think even more massive than the idea of taking your paper card database and putting it onto a computer system, you know, which people had to, you know, juggle that thought like 25, 30 years ago. So before we move on to the venture arms, you just talk about the strategy for the next, you know, 12, 12 months and beyond? So what is the long-term goals here in terms of how the UN and UNICEF is, we'll be approaching blockchain and implementing them in projects that have to impact? Our timeline is pretty clearly aligned with the three levels that I described.

So we have a set of sort of external funding, accepting of cryptocurrency discussions that we are having now. We believe that those will option out in the next six months that we'll have some answers from accounts and financing about how we can deal with cryptocurrency. That's at that top level. At the business process level, we did a hackathon in Kazakhstan that was amazing. We're going to do another one in the end of the first quarter of this year

with another UNICEF country office where we're going to bring some of the Kazakhstan stuff to another region and be like, this is the smart contract that we described, Here's how it could work. Let's try it in another office. So we should have some internal momentum around that stuff by the end of quarter one. And then we have investments. So we've got an arm of our team that does direct capital

investments in companies. And we have a call out for blockchain-related companies now. That is a call for companies that want $50,000 to $100,000 of capital investment. And that's described on our website as well. And we hope that we'll be funding five to six companies in the coming months. That call closes at the end of January. It usually takes us six weeks to eight weeks to make our funding decisions. So we'd see those

coming into play end of quarter two, probably realistically. So those are the three levels that we're working on, as well as some secret stuff that we don't want to pull the curtain back on too far. Okay. So that's good segue into our next topic, which is the venture arm. I was actually surprised to hear that the UN had like, probably like venture funds to invest in startups. But I guess it's like any organization, you need to have that sort of spark of innovation that comes from a very agile startup. Can you sort of talk about the types of companies you're investing in and what are you looking for in the startups that you're investing in? So the fund is a relatively new vehicle. Sunita Grota and I co-founded it about two years ago.

It's based on our ideas of what's best from the VC world, which is itself a very dodgy place sometimes, and what's best from the world of development. And what we tried to do is create a hybrid model where we went to our LPs and investors and we pitched them on an idea of creating value out of open source intellectual property. So we said, look, what if we don't want to hold on-book assets for UNICEF? What if we want to create portfolios of technology that's curated, that goes back to our LPs, that has a worth?

And if we could invest in five companies around data science, in five countries that are interesting, would that $500,000 investment potentially be worth more than $500,000? Our initial investors said that that was a reasonable hypothesis. They provided us with $12.5 million of initial investment money from four anchor investors. And we've made our first seven or so 10 investments now

into private companies. The fund only invest in companies that are registered in the countries that UNICEF works in, which is interesting. So that's the 135 countries that we consider program countries. So that's not US, not Europe. We only invest in companies that are registered as for-profit, so we don't do nonprofit kind of investments. And we look at companies that

have the potential for growth in their technology space. We combine a set of companies. So Sean is currently alone in the blockchain portfolio, but we're going to find some other investments to connect them with soon. But in the space of drones or data science, we try to bring groups of companies together, given the technical support from our team

and from our partners that they need, and help them grow faster by being open source and working together in these spaces. Our investments actually get us a lot more than you'd think 100,000. capital investment in Burundi is quite a substantial investment to make. And we find that these companies can then grow to a second round of investment, to graduation into acquisition and so on. And we're going to be seeing the first of those things happen in the next six months.

We also invest in some of the platforms that support this work. So as I mentioned, we've got the largest drone testing corridor in the world for humanitarian purposes. That's an investment through the fund that is its own asset class that supports the individual investments we make in drone companies. So if you're the drone company we invested in Kenya, you can come and use our corridor for free, and that can accelerate your work. So the fund does those two things. We are looking at and exploring how we could have a crypto-denominated fund that would work along the same lines that is pending all of the review of the people that need to say that it's okay to do that, and it won't break the system. But we feel very positively about that as a possibility.

And we're also looking at another stage, a second round of the fund, which is shaped a little bit differently. But in general, the investments that we've made cluster around these kind of emerging technologies that have a $100 billion market cap behind them or more, and that can address fundamental human needs, though not with an explicit social good focus. It's just that the company has to be good. They have to have good DNA. So it's not a social impact fund in that sense. That's very clear. And so how big is this fund? It's 12.6 million.

We've put out about 5 million of that. And is it funded, where is the capital coming from? Is it coming from UNICEF donations or are you have external funders? Nothing that we do comes from the core UNICEF donations. So this is from four LPs, there are four anchor investors who came in, two governments and two foundations. They all have expressed sort of slightly different interest in the valuation of the IP. So some of the governments are interested in using the procedures or the companies that we work

with in their own internal arms. The foundations have similar divergent interests. We were very lucky to have Sean and his team present at our first LPs meeting in New York a few months ago and showed the progress that they'd made and we had really good comments from the people who've invested in our fund that show that the types of technologies we're investing in are actually pertinent to their work. So, you know, this is exciting for the investors because they see something that they maybe aren't able to play with exactly at the speed that we are. Great. So I guess this is a good segue way then into a section of the show with Sean and Sean has received investment from

the UNICEF venture fund at least one of the projects Sean was working on previously did and so Sean can you tell us about that experience and how working with the UNICEF has benefited your your work and you also talk about that about the XO Foundation and this idea of proof of impact So I think we're all familiar with the general approach in blockchain solutions that you need to start off with some proof of concepts. And so we were provided with some innovation funding from an innovation fund here in South Africa to do a proof of concept in the context of early childhood development, solving a real world problem, which is how non-governmental service providers who are to do a little bit. delivering preschool services to children, around about 800,000 children in the country, make their claims for a daily attendance subsidy,

which is paid by the government. Now, that's a boring problem. It's making claims and getting paid for them. The problem that has been identified there is lack of trust in the system, and lack of administrative efficiency, and a lot of gaps and lack of information around where the needs are and where the money is going.

And so we were approached to provide a use case implementation, that sort of test of using blockchain for this very practical real world problem. And so we built a solution for that, which is a product called Ampley. And we thought that would take six months to a year to kind of prove out and scale up. Well, four years later,

We've learned a lot of lessons. And we have now scaled that, and we have more than 50,000 attendances recorded, and we're now going into more production mode. But along the way, we needed to establish new kinds of partnerships to take this beyond one use case and one local implementation into the global potential that this has. Chris has spoken about establishing platforms, And I think this is a really important concept, you know, with an important possibility within the blockchain or sort of the broader sort of set of technologies.

If we don't go beyond just distributed legend, we also talk about the new web standards for the decentralized web and new data technologies, including machine learning and so on. All of these disruptive technologies are coming together in ways in which we can have a really transformative. effect on how information is collected, how it's valued, how it's exchanged, and therefore the kinds of economy that we can enable through the use of information. So that's really where we've kind of migrated with the support from UNICEF, from a local implementation on a very specific use case, to a global potential and to understanding that we can take this fundamentally open source philosophy and standards that align with what's happening within the standard-setting processes around the decentralized web and take them into a protocol

that becomes a platform. And so that's where the XO Foundation has kind of taken the custodianship of this open-source project and is seeking to expand the use cases of the use cases of of this and the implementation of this across a broad set of uses with a growing network of partners. So what do you see as the future here for the XO Foundation and the work that you're doing with UNICEF? I mean, I suppose and I hope that this work and this platform will then benefit organizations like UNICEF that raise funds and that want to build reputation around proof, like some kind of proof that their work is providing some kind of an impact. Yeah, so the next phase is really being able to

systematize this. And Chris has spoken about how once technologies are proven, UNICEF has the reach and the scale through its country offices and through its partnerships with other organizations to be able to take things to scale. And I think that's the really critical thing for us now. So it's been Greg, doing the learning, developing the tech and so on, but how do we, how do we go to the next level and get adoption of these technologies in ways that it can actually impact on many, many

people's lives? Now, we can't do that ourselves, and we know we're not interested in, in, in, in, going and implementing the solutions in all different contexts, what we want to support is the platform that enables other people to build on that. So the analogy, I guess, is in the way in which the Ethereum network and Ethereum smart contracts enable an open ecosystem to exist, creating applications on a core protocol and a core set of capabilities around compute and data storage and so on. Interesting. Well, I do hope that you have a lot of great success in building this platform that we see all kinds of applications being built that are providing a lot of value

to people who really need it. And so I believe it's just sort of starting as a project and you plan on launching this network. What's the roadmap here? Yeah. So the first step has been to formalize the open source project. So in the same way as we have a kind of model around open source foundations like the Linux Foundation, Mozilla Foundation, Web 3 consortium and so on, we felt that the next step is to establish

this open source code base within an open community and a foundation model and to bring in key partners. And so UNICEF is one of the partners. We have Singularity University. We have the Gold Standard Foundation and a number of other organizations that have an interest in in in in in applying the protocol into use cases through their networks. And so we we focused mostly on organizations being participants in the network that have got their own networks and that creates of course much bigger network effects.

And across the different organizations that have expressed an interest or have actually formed. There's a number of very interesting use carbon credits arising out of clean burning cookstuffs and linking health credits to that from the health prevention benefits of clean burning cookstores and heating, across to impact bonds for education for young women in India or early childhood development, ones in South Africa. And so we have a whole range of use cases which will provide us with further proof of the utility of this protocol, but also add to the software with reference implementations and a growing data set around sustainable development initiatives.

Fantastic. That's fascinating. And so we'll we're going to have you back on in I guess a few months so to talk more in depth about or length about about XO and the protocol and we can get into the technical aspects of Ixo so looking forward to that thank you very much to the both of you for coming on today it was a fascinating discussion and I look forward to seeing you know the I guess I'm gonna I'm just gonna channel Rice Lindmark here I'm looking forward to this you humanist blockchain future where humanitarian work can be improved by this technology and where organizations like UNICEF can be more accountable and where we can have actual

proofs of the impact that organizations are providing on the ground for like kids in this in this case so good job to both of you for you want to working on such a noble cause. And thank you for coming on. Thanks for having us. Thanks, Sebastian. So thank you to our listeners for once again tuning in. This show and lots of other great shows about blockchain and Bitcoin and all these technology can be found at Let NotBitcoin.com. If you like the show, there's multiple ways you can support us. One of the ways you can leave us in iTunes review. It helps people find the show and we're always happy to see your reviews. And you can also leave us a tip. We accept tips in Bitcoin, Ether,

and now in Bitcoin Cash and the tipping addresses will be in the show description. Thanks so much and I look forward to being back next week.