How Cardano could fast-track financial inclusion in emerging economies

I have lived in Africa and Asia for many years. No matter the fancy tech. If you cannot put fiat in someone hands, to buy at the food market or pay the helper, you have not solved the problem. I am deeply invested in this problem. Taking care of many programs in Cambodia and Africa. It is debitating.

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bitcoin atm’s seem to be a good start. Why not ada atm machines, rolled out on a massive scale. Maybe with a good incentivized business model, similar to the stake pool operators, funded through the Cardano Foundation. With millions of atm operators, with anyone being able to become an atm operator. This I’m sure is problematic in heavily regulated countries, but would it not be less red tape in these developing countries?

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Considering that many underserved people across African countries rely on cell-tech to manage what limited financials they do have - can we expect a host Cardano wallet that caters more specifically to cell users? Maybe this already exists. I use Daedalus and actually have very little knowledge of the inner workings of Yoroi.

I don’t think ATM’s are the full story, but they’re a good idea, and that is because I’ve observed Bitcoin ATM’s in 2 or 3 places so far and I NEVER see anyone accessing them… One was in the center of Vienna/Austria… I still think the barrier to entry is very very high for crypto and an ATM may indeed help, but it also assumes that you have a bank account and a credit/debit card to acquire the Crypto. No, I think you need to savor what @ZeeTee wrote… “If you cannot put fiat in someone hands…you have not solved the problem”. How does ADA become as easy and simple to use as fiat? And no… I don’t have the answer. We often think more technology is going to make our lives easier and if you’re savvy it does mostly, but it also has added tremendous complexity to our lives. We need to focus our Dapp and other development on all sorts of personas: from the crypto teenager over the middle aged unemployed via the middle aged savvy all they way to the retired 80+ year olds… how do you bring everyone on board of any tech? The other day a man on TV (80+) had a cell phone without internet and got a text on it “click on this URL to confirm your registration for your vaccination” and he didn’t know what that means “click on this URL” or how to do that… App devs assume everyone gets it, but that’s not always true. The same applies to using ADA… it’s too complicated yet and we have a ways to go.

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This would be possible with Yoroi. They are creating a web3 based browser function within their mobile app that will interact with smart contracts on Cardano. Similar to what Metamask offers with Ethereum.

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It’s obvious many people voted based on emotions and not based on the understanding of basic finance.

Can you elaborate on this? I’m hear to learn… do you have some basic finance education to share with the community?

Biometrics using smartphones or desktops is a must to avoid identity theft and fraud. Biometrics is already on the cards for Atala Prism per website.

Biometrics with Atala Prism could be massively beneficial to Cardano:

  1. It could be a solution to the current Stake Pool Centralization that we are watching unfold before our eyes. The solution being Digital IDs required for Operators (including biometrics) and a limited number of pools per Operator.

  2. Thin edge of the wedge for developing country adoption. As a South African, I can honestly say the barriers to entry to potential technically sound, smart, zulu/xhosa/etc speaking individuals living in a township becoming an stake pool operator are pretty high. Does anyone honestly believe that they will be able to attract stake as easily as someone in the developed world? Or have the wealth to buy ADA to stake to their pool? Do you think people in developing countries will be comfortable with just about all staked ADA and SPOs being located outside their region? And anonymous to boot?

  3. Business and KYC as alluded to in this article for inclusive finance.

Probably a 100 more benefits that people could think of. Identity is taken for granted in the western world.

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Biometrics were one of the few, easily attainable ways that I could think of securing digital identities that aren’t easily faked, but don’t require a stamp of approval from an outside entity (government). For someone operating a stake pool, it would make sense to me (given the already exorbitant cost of pledge), but I also wonder how accessible smart devices with biometric sensors are for those in developing economies. Granted, I’m a bit stubborn when it comes to technology, but I myself only recently bought a phone with a fingerprint reader. Would the affordability of such devices add a barrier to entry for digital identities?

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Super accessible and affordable. The Xiaomi Redmi smart phone, as an example, has fingerprint biometrics and goes for about $250. I’ve had several of them in South Africa over the years. Best selling phone in India and was good enough for my South African bank, which respectfully, has world class security. It’s a lot more accessible than the recommended minimum pledge!

While biometrics would be a great way to produce a digital identity without requiring some other authority, we should also consider what would happen if a person has some terrible accident. Let’s say that your identity is tied to three fingerprint scans on your device. Maybe you were a little foolish and used the same hand for all three. What happens if you lose your hand? Or both hands, for some terrible reason? And if you can still recover the identity with a passphrase and tie it to new biometrics, couldn’t people just fake new identities all the time?

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That’s a good point! This is an outlier type scenario though, in my opinion. Not ideal but, perhaps a local node facial scan against a Government ID, as a backup to biometrics could work? I noted that the webcam in my laptop was used to scan my face against my passport when I recently opened a Kraken account.

A quick Google right now indicates that Samsung phones include iris scans https://www.samsung.com/global/galaxy/what-is/iris-scanning

I would agree that it’s an outlier, but if we want to make a system that’s able to be used by anyone, it’s an important note. I hadn’t really considered iris scanning as an option, but that’s good to see. I suppose that the same issue could apply to that, as far as recovery of the identity goes, but it’s definitely an outlying situation as well.

I’d be uncomfortable with an identity issuing body being required to backup something like that, personally. I think that there would need to be a way to recover the identity on your own, but in a way that makes it prohibitively difficult for bad actors to do it on any large scale. I say ‘on a large scale’ because even the average user could have several identities tied to different fingerprints. Or even toeprints, I suppose. Iris scanning would be much harder to get around, but there would also be fewer fallback methods if it failed. For example, if you use biometrics and have a set of three prints, one on each hand and one on a toe, you’d probably be pretty safe, whereas a nasty accident to the face could damage both eyes.

Definitely a conundrum. There’s also the question of how unique biometrics could really make a person. For example, a fingerprint scanner doesn’t require an exact match; it just tests to see if it’s close to the point where impersonation has an arbitrartily low likelihood. This seems fine, but there would be several security issues. While it’s fine for verifying a single user (you’d have to have super similar prints to them, highly unlikely) on a single device, it becomes cumbersome on a wide scale on blockchain (I think?).

My thought on the process would be thus:

  1. Scans are initially tied to an identity
  2. A user ttempt to verify themself
  3. The metadata containing initial scan values are read from the chain
  4. The local device tests the user against the data, and verifies the user.

You could also go about it by searching the chain for data that was arbitrarily close to the user’s input, but it would be EXPENSIVE on blockchain. In either case, the issue of relying on the local device is an issue. Even in if the verification algorithm was kept on-chain, you’d have to be able to verify that the biometrics hardware wasn’t being emulated. I think. I’m not an expert here, just putting my thoughts in.

EDIT: I think a more poignant issue here is that unless you’re comparing against the entire list of biometrics stored on-chain (which, again, I think would be too expensive), a user could just make an arbitrary number of independent identities with the same biometrics.

I suppose that if we wanted to be able to trust users for certain roles (say, pool ownership) we could make a contract keeping track of verified users’ biometric data. In this case at least, we could look over a much shorter list and refuse to verify if the biometrics matched ones already listed. Anyone could still own a pool, but we could look at the contract and know which ones we wanted to use.

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All great points and thank you for engaging! I like the ideas of both hands and a toe! Initially amusing to be honest (picturing myself scanning my feet!) but on reflection, very practical in the case of accidents - it would definitely push out the outlier case to the realms of statistically, extremely unlikely.

In Africa, fraudulent identity documents are actually pretty rife, and while there are security issues with device capturing, what you’ve proposed is probably more secure than what is generally used ‘on the ground’ in the developing world.

No idea from my side as to how cumbersome this would be on blockchain, but ultimately, it comes down to how scaleable Cardano actually is (I’m no expert on this by any means!) - My expectation is that digital ID with some sort of biometrics could be stored on the blockchain.

The process that you’ve laid out is exactly what I had in mind conceptually. I actually had in mind a comparison against an entire list, but agreed it might be a challenge for populations in the millions - it would be interesting to hear one of the IOHK boffins opine on this. The use case for pool ownership would, in my opinion, be a great way to test the use case on a smaller, willing, test population for refinement before broader rollout to other use cases e.g. University credentials, etc. where problems wouldn’t necessarily be easily forgiven.

Welcome to the forum and that you for sharing your experiences.

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To purchase ADA or any other Crypto one needs to use FIAT. Many countries which are underdeveloped have strict exchange regulations. These include many African countries, India and Sri Lanka. How will Cardano overcome this? I am looking at launching a solution in Sri Lanka to enable people to get into Crypto however with people not being able to send money out of the country this cannot be achieved. Would be interested to discuss this further

@Sanjay I appreciate that you’re pondering about this. Thinking back on Hoskinson’s video about Cardano’s full potential, I understood that there will be first movers, then followers and finally the ones that will be forced to join the ranks of the crypto community if they wish to be relevant in the global market in the future. Maybe it’s worthwhile considering the appearance of CDBCs? These are governed by the country and would eliminate some of the fears associated with public ledgers. With regulated CBDCs governments could forge rules for swapping ADA. They could do this today, but they have no means of controlling cash and would thus have to keep strict taps on the on-ramps. CDBC’s offer up a new era of control in that sense. For this reason the EU rightfully concluded from a survey in the EU that CDBC’s success in Europe will depend on anonymity and privacy. In other countries you can expect CDBCs to be regulated with a different priority in mind. In a nutshell, I think there will always be rules and regulations first before gaining access to ADA. The question in my mind is to what extent that might impede blockchain innovation and adoption in such country and how will this play out in the long term for the country.

Hey Sanjay

I just came across this article which I found very interesting as I think that it may begin to address some of the on and off-ramp challenges.

Thanks for this @Dminfuse . Sorry been away for a while. I need to get in touch with Charles H as there is a big opportunity to get into Sri Lanka. Anyone in the forum who can help?

I don’t have any direct contact info… but I’m sure if it’s a big opportunity it will get pushed through to him if you use the main contact page on his companies website. Or reach out to him on twitter

https://twitter.com/IOHK_Charles