 Hi everyone, come in and take a seat. Welcome to Blockchain from the bottom up. We're going to introduce to you some lessons from creating financial empowerment in remote Pacific Island communities using a real-life use case that's still ongoing now. My name is Sandra Wantege Hart. I work for Oxfam. It's a global nonprofit present in over 90 countries. I am the Pacific Cash and livelihoods lead. So for the past 10 years, I've been working in disaster preparedness and response. And I manage the portfolio of programs across the Pacific region that are designed to deliver payments to people affected by natural disasters. My name is Nicolines and I'm the co-founder of Senpo. Senpo is a tech startup that really focuses on creating financial inclusion for unmade communities. This is a number of really interesting use cases for the one we're going to be looking at today is how to get cash to vulnerable people in crises. So together, we've managed to run the world's first cryptocurrency-enabled cash-based assistance program using Oxfam's experience, field presence and community reach, and of course, the ingenuity of Senpo. Nicolines doesn't work. So first I'd like to start with an anecdote. So when we were working in Vanuatu, plastic agnotes had been introduced relatively recently. And people were really excited about it. And they told us the best thing about these new plastic agnotes was that you could bury them in the ground for longer without them rotting. I love this anecdote because for me, it was really the first time that the concept of being unbanked shifted from this mildly academic concept to something that was actually really, really tangible. And I think too often, blockchain projects looking at financial inclusion really take quite a superficial approach, believing that technology can be just injected into communities and everything will be magically better. And we reckon that this has left much of this discourse around what chain for financial inclusion is somewhat disconnected from the realities that people experience on the ground. So here today as a community at DEF CON, we believe that we absolutely cannot in good faith claim to be solving some of the world's biggest challenges without working with and in communities. Blockchain has from the beginning been promising financial inclusion, open payment systems for underserved communities and marginalized people. But in order to do this, we need to actively reach out to those communities and get there rather than just staying in spaces like this. So this is Van Wat Tu, also Van Wat Tu. Van Wat Tu is a collection of 83 islands in the South Pacific Ocean. It is a country that is extremely remote so don't be afraid if you have never heard of it before. Van Wat Tu is with all these islands extremely dispersed. It's very sparsely developed. And in fact, most people on their islands do not live close to a bank. In fact, banks are often not even on the same land mass as they are. Another fact is that most of these people live closer to a volcano than they do to a bank. So there are actually more people who are volcanoed in Van Wat Tu than people who are banked. In Van Wat Tu also, it's a question of urgency. Van Wat Tu is the world's most disaster prone country. It sits directly on the ring of fire. It sits in the middle of the Pacific Cyclone Corridor. It sits on the front lines of climate change. And as such, this use case has been embedded within an existing disaster preparedness program. So let's talk about cash in why you wanna do it. Why would we wanna give cash instead of in kind aid, such as food or clothing? And the reason we wanna do this is because, collectively, we're pretty terrible at working out what vulnerable people need during the crisis. So 70% of Syrian refugees have actually sold the aid they've been given to buy while they actually need. So it makes a lot more sense to just give people cash instead of in Detroit, that whole process. The problem is, is getting physical cash to people in a safe and secure manner is really, really hard. There's stories of NGOs shipping folks of cash up the river because they're less likely to be ambushed then when they were dried up on a road. Here's an alternative approach that we're putting into practice. If you just let people buy what they need from the stores, you can just reimburse the stores instead. These things instead of needing to find ways to get physical cash to hundreds and hundreds of individuals, instead you only need to find a way to get it to a handful of stores. And this is often a lot easier because stores can have a higher level of financial inclusion than individuals. You need a way to track how much each vendor is owned. So we give each vendor a contactless payment card which looks like that, or this, it's the same thing. What's great about this is it's really, really inclusive. It means that we can help in how anyone regards what kind of a bubble phone I'm on. So this card is tied to an Ethereum wallet which means that we can track the credit spending in it. But we can take this step system one step further and make it more resilient by not just tracking credits, but instead actually using a stablecoin pep to the local currency as a measure of transferring funds. So this means that vendors actually have real value that arrives in their hands every time they accept a payment. It's more than just a promise from Sembro that will repay them. This is critical because it means that then the vendors don't have to rely on us to repay them. They can find another provider to sell them their stablecoins or sell them by their stablecoins off. Even if Sembro does end up doing a lot of the green payments, this fundamentally changes the structure of what we're doing. We're no longer just an end-to-end payment provider actually now two things. We're now a wallet and an exchange. And this is really important because it changes the regulatory structure under which we operate. And this makes it a far more flexible for us to operate in an otherwise really difficult country like Lebanon or Ghana Water. So this is a very tangible advantage of using a blockchain over the existing processes. So to quantify this, it's 96% faster than what we would do or what Oxfam was doing in the past. This is because we're able to bypass a huge chunk of that existing banking system. So again, what does blockchain do for us? We speaking as an NGO. For me what this does is it starts to break some of the chains that are consistently constraining the way that big UN agencies, NGOs, foundations and other non-profits operate. When you use a crypto-enabled payment system what you're doing is you're creating borderlessness around the way that money is traced and the way that money is donated. What this means is that you're opening up that humanitarian system to include new actors and in our case smaller vendors. It also means that that borderlessness allows us to do a revive and with local vendors across and between multiple locations at once. Because as we know, the world's earthquakes, the world's cyclones, the world's volcanoes absolutely do not care about borders. They do not discriminate according to which country you're located in or which country you've targeted your donations to. So in addition to improving efficiency and automation it takes what are unnecessarily complex and slow systems of big agencies and it makes them much more simple, much more intuitive and much easier for local microeconomic stakeholders to use. Now our system, our humanitarian system today is also unnecessarily hierarchical and I'll even say that it is still very colonial in the way that people decide who should get what and who is making those decisions. This results in monopolies of control and privilege and power and concentrations of donations when in fact in reality communities are always the first responders but they are almost never the main responders. But now, using these types of systems building in communities and with them we can start to focus on enabling small economic stakeholders to play an active role in that process. So they then become active agents of recovery as opposed to being passive recipients or beneficiaries of humanitarian assistance. So this sounds great in theory but now it's time to talk about some of the realities on the ground. We actually developed the first version of our platform working out of a Syrian refugee camp in northern Lebanon, that's it here. We plan to authenticate these cards using a PIN. Seems simple enough, this is exactly what we all use on a day-to-day basis with our PIN cards. When we got there we found that there was much aid program being run using debt cards also using PINs to authenticate so fundamentally a pretty similar system. What we found was that people would write their PINs on their back at their cards these cards would be handed across to the vendor who would check the PIN and type it in for them. This is exactly what we saw for very obvious reasons, that's not my real PINs. Now PINs are just Arabic numbers so it tricks us into the impression that we're working with a concept that's really, really universal. But for people with lower literacy who are not so used to these so-called Arabic numerals it's pretty much an impossible concept to take a PIN and memorize it. To illustrate this point here's what actual Arabic numerals look like. So even though the numbers that you and I use on an everyday basis is actually based off this number set trying to remember a PIN someone becomes really, really, really hard. So this is where we need to start to check our assumptions and revisit them and really challenge why we think we are well placed to decide on behalf of someone else and to speak and replace their voice in the process. The reality is that the way that the global financial system and its payment instruments function does not apply to many, many people in developing countries. In fact it doesn't relate to them. Sometimes it's not even there. People don't have debit cards, there's no bank, there's no way to pay and sometimes those payment systems are there but they simply don't work or they're too expensive. So how to resolve the security issue? We explore many, many things over this process like symbols or colors ways to make this team more right, easier to identify. But ultimately the community in Badawacha suggested something really, really simple to us just to display the name on the thing that was pointed out to us during the payments so they can check it. Now this seems trivial so why is it so effective? So the reason this works is because it mimics the way that transactions are actually secured in these communities especially at the micro level. So speaking at the village level it's actually very, very difficult to use somebody else's card or take somebody else's belongings without either the vendor or somebody else around you eventually saying that is not you or that is not him, that's not his or that is not hers. Those systems of accountability are in place for somebody who wants to steal something eventually they're going to meet a relative of the person that they've stolen from. So case in point in Badawacha we've done nationwide feasibility studies to actually assess if payment systems as a mode of response is possible and in so doing we consulted with some of these small vendors that we work with now and what they do is they do regularly lend money to people just on the basis of knowing their names. They're lending money to people on the basis of knowing their customers so this means that the vendors at the community level are actually doing KYC and they're able to cross check and verify that information leveraging their relationships with people in the communities around them. Now blockchain as it's currently designed is really optimized for trustless environments and I think we need to interrogate this a little bit because in my world where I live, where I work where many of the billions of the world live and work, financial security is far more about enhancing existing social frameworks of trust. So really relying on those that you can trust as opposed to operating in a trustless vacuum. So this isn't to say that blockchain doesn't help. What we have is a secure framework that can enable social models of trust to flourish and to expand by accelerating the exchange of value amongst and between people at the community level but at the same time limiting the capacity of those people to be able to abuse each other's trust. Now what this means is that we can start to bridge the gap between local and international models of commerce by using systems that are adapted to the way people behave. Communities are more decentralized than what we're used to dealing with but it's not always in the ways that we would expect. So we're in Japan and in honour of that I'd like to write a pipe in. The reality is that if you want to work in a country you need to pay advice with the regulatory expectations for the authorities there. Senpo knows this the hard way. We've been had team members harassed by his pistol at Lebanon for trying to push those boundaries too far and ultimately our actions don't just affect our company but also the end users who unlike us don't have the privilege of getting out of the country and leaving. So this is consequences that have really really big implications. Now knowing who is sending or receiving funds is at a core of a lot of these expectations that authorities have. You need to be certain that a person sending money or receiving money isn't part of a terrorist sale for instance. They're sending multiple identity documents from someone and then cross checking them. What we've been doing is that this whole thing breaks down pretty quickly. People spell their names differently on every single piece of documentation. Dates of birth often tended to differ by months or even years. This isn't some of the various plot to conceal identities it's just the nature of emerging markets. Ultimately though it means that the concept of document based doesn't really work for a lot of the world. And it also means that this neat little diagram I showed you of a stablecoin being sent directly to people is unfortunately pretty much illegal. Stablecoins are far too liquid. There's a couple of tweets we've made to get this to work however. Instead we can use stablecoins as collateral to make a new token or voucher. Conversion from this token back to a liquid stablecoin is only possible if you've passed AYC checks and your address is on an online contract wireless. If you're not on the wireless you can't access the underlying collateral. However you can still spend these tokens. This means that by conducting KYC checks on vendors we're still able to distribute to individuals who would otherwise be off limits. This sort of process where one form of value has different levels of liquidity to different people and baiting this into the core of the implementation is something that would be pretty hard to pull off without blockchain. And this leads us to a pretty interesting conclusion that crypto doesn't need to be the enemy of financial compliance but rather it can be a tool to help meet it and increase financial inclusion. So the take away for you guys is that trust is not always in institutions in places where those institutions don't exist where that infrastructure is not there. In fact trust is actually in each other. It sounds common sense. It sounds very human. Let me give another example of this happening. So in the Solomon Islands I had a discussion with the telco that was launching mobile money. One of the test groups had a guy who received money into his mobile wallet on his phone and he immediately went to the cash out agent. And he said to the cash out agent I'd like you to cash out my full balance right here right now on the table. The cash out agent cashed him out no problems and this man counted his money bill by bill and then gave it back and said okay thank you I'd like you to put it back inside now. He just wanted to check that that money was real. He wanted to check face to face with somebody that he knew that that money was real because he just did not believe that it could be on his phone. So this is where we can make some magic right. So when you have a tech startup like Sample that's able to code that's able to iterate on the ground within the community and do this on the fly plus an organization like Oxfam a society group that is embedded in the community that has an unprecedented level of access that's able to amplify those community voices and encourage participation through translation and communication. You can create something entirely new. So this is the last mile. So this is where we can work in harmony and literally build out the front end beyond the existing infrastructure and even beyond the digital infrastructure. That front end needs to end within the community and that needs to be done through that level of community engagement and boots on ground paper, paper. So this is where we need to start blending advanced technologies with the knowledge and techniques of people that are used to communicating with communities and this is also where we can start to create feedback loops that are mutually beneficial. So when you have tech that is enabling reach and allowing you to build beyond the infrastructure does not go that tech can create efficiencies and transparency but when you have community representation community presence community voices and connections then what you're doing is you're ensuring that that tech is being enriched through iterative development that it remains inclusive and that eventually it's becoming more robust. So what have we been doing what have I been doing I've been acting as a translator. This is how we include the voices of the many and in fact we have encoded those voices in the way that this application has been constructed. These are people who are on the fringes of digital infrastructure. These are people who do not have digital access who are not digitally literate but yet there is evidence of them in the way the application has been built and therefore it's easier to use and this is also what makes underwalked cash extremely distinctive. So Simo developed a platform working across several countries Greece, Lebanon, Iraq, Kurdistan, Vanuatu and so did Kenya and one thing we've wanted is that even the realm of payments is so much diversity right now. In Australia 94% of payments are made using a contactless payment card while in 2014 more money was transferred by mobile phone in South Africa than in Europe or North America put together. Meanwhile in Japan I can't remember the time last time I've seen so many coins. The point is is that all communities are totally different and need to be treated as such. And the thing is decentralization is not necessarily guaranteed diversity. Blockchain may have decentralized computer code but the decision we've made on these layers already suggests so much about what the user experience on top of this will be. The rates of inflation and currency, how private keys are stored and the legal implications of our designs. If we're not careful we risk trying to homogenize the way people globally interact with finance and the process that we construct for our world doesn't necessarily translate. Blockchain needs to help bridge this financial inclusion gap rather than extending it. In the scheme of things, many of the systems that you and I work with on a day-to-day basis they work at least okay. I got here on a perfectly legal passport and went through the slightly bizarre experience of withdrawing a ton of money using my credit card but it worked. But for me, where I live and work is not the case. For many emerging economies for many markets in the global south this is not the case. But in some ways Blockchain is actually better suited to those communities than it is to those of us who have the infrastructure working just fine for us as we pay and as we travel. This is a solution now that has grown out of one of the world's most remote communities. This is happening right now and we absolutely intend to extend this both as partners but also with these communities in order to enable one community's experience to grow and develop and improve the next humanitarian response but also to inform the next community that's going to engage with the tech. We believe that the nature of Blockchain development should be inclusive not exclusive. The system of delivering humanitarian assistance is absolutely no exception to this rule. And so the final takeaway here if we can do this in a place like Vanuatu then there is absolutely zero excuse for those who are at this conference and elsewhere working on Blockchain to not engage with communities and go that extra mile. Thank you.