Feature: Refugees as guinea pigs for cryptocurrency, blockchain and Web3

A British anthropologist criticizes the fact that experimental blockchain techniques are being tested on refugees and others with little money. For an in-depth report, Margie Cheesman from the University of Cambridge looked at payment, currency and ID projects targeting marginalized groups. The untested technology aims to provide basic services to people without regard to the social and economic problems these people face, she says. At the same time, people already in an unfavorable situation would be exposed to new risks. It demands the end of the projects.

Cheesman prepared the report for the Minderoo Center for Technology and Democracy, which focuses on the relationship between digital technology, society and our planet at the University of Cambridge. She analyzed several projects which are mainly based on blockchain technology and are mostly advertised as Web3. Companies and start-ups are testing such services in refugee camps, for example, where requirements for taxation, data protection and ensuring civil rights apply only to a lesser extent. Refugees and people with little money have therefore become the main test subjects for Web3 experiments, she writes. The consequences this will have for these people are not yet predictable and can only be guessed at the moment.

For example, Cheesman lists the Worldcoin project, which aims to create a fair, universal, and global basic income based on cryptocurrency. It’s already been tested in 24 states, but there’s still no release date and no information on value for money. It should not be tied to any national currency. During the tests, officials collected 450,000 high-resolution photos of people’s bodies, faces and eyes. This personal data would also be collected in other identification projects, which, among other things, would increase the risk of surveillance.

The Sarafu project of several Red Cross associations in Kenya involves blockchain-based vouchers with which participants can purchase services and goods. The more someone uses sarafu, the more “rewards” there are in cryptocurrency. All transactions with it are recorded on the blockchain, which should increase speed, security, and transparency. However, banks in Kenya are said to criticize the project as it devalues ​​the national currency. If sarafu vouchers are not accepted anywhere, they would have to be exchanged for local currency, which costs money and increases risk. Moreover, it often remains difficult to know what to do in case of failed transactions.

Other projects presented were from the United Nations World Food Programme, the aid organization Oxfam, the United Nations Children’s Fund (UNICEF) and the EU. One of the problems is that the associated applications are often in English. Anyone who then has to seek help is vulnerable to fraud. Additionally, manipulating experimental tech requires skills that people wouldn’t know with regular payment methods. However, the responsibility for this would be transferred to them. After all, managers often work with start-ups that provide the technology. The company IrisGuard has come into possession of 2.7 million iris scanners from Syrian refugees.

Based on the report, Cheesman says Web3 technologies — “especially untested cryptocurrencies” — should not be pushed on marginalized groups for experimental purposes. If you don’t have an alternative, it’s hard to disagree, even if it involves undesirable consequences and risks. Public institutions should work together to screen Web3 companies, she said. Finally, critical and evidence-based research on the techniques is needed to refute the claimed benefits of blockchains in terms of decentralization, privacy, and reliability. The 38-page report is available online.


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