Why a Little-Known Blockchain-Based Identity Project in Ethiopia Should Concern Us All
Published: 7/Dec/2021
Source: Centre for International Governance Innovation (CIGI) (Canada)
There are countless examples of the dangers posed by national ID schemes, including from Kenya, Uganda, Pakistan, India and elsewhere.
By Elizabeth M. Renieris
Ethiopia has been making international headlines due to the steep escalation of a nearly year-long civil war in its northern Tigray region and ensuing humanitarian crisis, with millions teetering on the brink of famine and genocide. At the same time, we are beginning to recognize the role that technology companies and platforms can play in exacerbating such crises. For example, Meta (formerly known as Facebook) and Twitter have been implicated in worsening matters by inciting violence and amplifying hate speech against certain ethnic groups in the region. Meanwhile, an offshore “Web 3” project with ambitions to build a national ID system in Ethiopia based on a suite of much-hyped blockchain technologies is going virtually unscrutinized by journalists, scholars and activists, even as such a system comes with significant risks for people in Ethiopia and in countries eyeing similar plans.
The project, known as Cardano, is actually run by a cluster of offshore entities — the Swiss-based Cardano Foundation, Hong Kong-based development arm IOHK and Japan-based venture arm EMURGO. Founded and led by the 34-year-old Charles Hoskinson, who previously co-founded Ethereum, Cardano raised more than US$62 million in an offshore initial coin offering from 2015 through 2017 designed to evade the reach of the US Securities and Exchange Commission. Hoskinson, whose ultimate ambition is to build a national ID system for Ethiopia, recently struck a deal with Ethiopia’s Ministry of Education for a blockchain-based ID pilot involving five million secondary school students. As he describes it, “Every one of these students will have a digital identity — a DID. That DID carries with it information — metadata — that will travel with them throughout their academic life, and follow them into the economic world.”
At present, Ethiopia lacks a national ID system. Instead, it has a highly decentralized system whereby foundational IDs provided at the municipality level known as “kebele cards” can be used to obtain tax IDs, passports and other functional identity documents. It is perhaps ironic that blockchain promoters such as Hoskinson, who aggressively evangelize “decentralization,” would aspire to build a centralized ID scheme on top of a distributed ledger technology. But distributed computing and decentralized power are not the same thing — far from it. In the case of Cardano, a proof-of-stake consensus protocol allows coin holders to vote and influence how the protocol evolves. Ethiopians, of course, have no say. Moreover, rather than decentralize power, the Cardano network itself becomes a single point of failure — if the network goes down, so do all ID systems.
Read further: https://www.cigionline.org/articles/why-a-little-known-blockchain-based-identity-project-in-ethiopia-should-concern-us-all/