Ending Homeless Hunger With The Blockchain
First draft May 2, 2016 Scott Burke Founder, BlockCrushr Labs [email protected]
Abstract. This paper describes a mechanism to revolutionize person to person “street” giving using the Ethereum blockchain, in co-‐operation with community organizations and food retailers, to increase market efficiency by tapping into common cashless payment methods, and to ensure that the giver’s value is spent for the intended purpose – feeding the receiver. This is a first draft and as such I invite and encourage feedback and involvement from anyone who wants to review, contribute to or participate in this effort.
It’s a sunny, spring morning. You can see her standing on the corner, in her usual spot. You can feel the plea coming from half a block away. As you approach, she holds out her cup. “Can you spare some change?” She may be hungry, and you want to help. You may say, “Sorry –“ and walk on by. Or, you may offer her something. In any case, she says “Have a nice day!” and you feel like she probably means it. You walk away with a mixture of feelings. If you didn’t give to her, you may feel guilty about it. Even if you did, you might still feel guilty and wonder if you’re actually helping her at all. This situation is all too familiar to millions of people worldwide, especially those of us who live in urban centres. We come face to face with hungry and homeless people every day and wish there was a better way to help. The problems with P2P (person to person) homeless giving are well-‐known. • Fewer people are carrying cash and coins as we move towards a cashless society. 90% of US citizens never, rarely
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or only sometimes carry cashi. 57% ‘never’ carry cash. • Rates of drug and alcohol use are disproportionately high among the homeless populationii which inhibits giving – people don’t want their money spent to buy drugs or alcohol. These concerns are founded. According to one study, although 94% of panhandlers use the money they get for food, 44% use it for drugs or alcoholiii. Vulnerable persons are largely unbanked and don’t have access to P2P methods like Paypal, usually don’t have smartphones, and can’t take credit cards or Square. And even if they could, the problem of diversion of funds would remain unaddressed. But people still have a strong desire to personally help other people in their community, and especially to make sure they don’t go hungry. So, we need to • Solve the problem of transferring value while ensuring it is used for its
intended purpose (purchasing food for the designated person). • Tap into the global payments network, but also provide a completely secure 1-‐ way firewall. We believe the Ethereum blockchain and smart contracts combined with existing community outreach organizations can provide the solution. Definitions Value recipient/Recipient – The person who wishes to solicit donations for food and use those donations to purchase meals Giver/Donator – The person who wishes to give to a person in order for them to buy food Participating food retailer – A restaurant, supermarket or any outlet that’s participating in the program where you can buy ready-‐to-‐eat food Community organization – A local partner organization focused on outreach and helping the homeless, vulnerable and underfed in their community Overview of System Here is a basic description of the proposed system. • The value recipient is issued a QR code, which is the encoded public address of an Ethereum smart contract. This code is issued through a community organization or self-‐service directly on a web site. The QR code gets printed on recyclable, inexpensive business cards or pieces of paper, by the community Copyright © BlockCrushr Labs.
organization or through a partnership such as with a local library. The recipient maintains anonymity and is only identified by their code.
Figure 1. Card recipient hands out to givers.
• The recipient is also issued a secret QR code, which is their key to spend funds they receive to buy meals.
Figure 2. Card recipient uses to spend funds.
• The receiver hands out their cards to persons who may wish to give them money for food. • Each card contains instructions on how to give. The giver may download an app and scan the receiver’s QR code, or go to the website on a laptop or desktop and type in the 40-‐character address manually. Methods to reduce friction here are desired – an alternate possibility is to have a username or other mnemonic registered in the system for each address.
Advantages • Neither party (giver or receiver) needs to know what Ethereum is or anything about the blockchain. The system abstracts out the technology into commonly understood standards and payment methods. (Apps, credit cards, QR codes) However, it will be helpful and important for recipients to know that their accounts are denominated in a digital currency called ether, who’s value floats against their local currency. Challenges/Issues/Problems to solve • Account balances are stored in ether (ETH). Ether trades freely and thus its price relative to a market’s local currency will fluctuate – recipient’s balance relative to local currency will fluctuate in response. o Volatility may be acceptable o Possibility for system to dynamically hedge vs local currencies • Participation of food retailers o Signing up outlets § Local community outreach partner will be responsible o Who will pay for on-‐premise systems, training and ongoing costs o Willingness of businesses to have hungry and/or homeless customers in their establishments • Willingness of citizens (givers/receivers) to participate o Ease of use / adoption
• The giver fills out a checkout page which donates value to the recipient through a payment gateway supporting all major payment methods (credit cards, Paypal, BTC, ETH, etc.) • If the payment is denominated in any other currency but ether, the payment gateway uses an exchange API or other backend system to convert the value to ETH at current market rates, and after business logic checks to verify the validity of the smart contract, transfers that ETH to the recipient’s smart contract. • The recipient can check the balance of their account on any smartphone or public access terminal such as a library, a community organization, or at a participating food retailer. Alternately or in addition, a simple automated system could be designed with an iPad, encased in plexiglass to prevent theft, running an app which uses the front facing camera to read the recipient’s private QR code and show the balance onscreen. • The balance is provided to the recipient denominated in their local currency, at current market rates for ETH. • The recipient uses their private QR code to purchase a meal at a participating food retailer. The retailer can use a smartphone or tablet to check the balance and process a transaction. The ETH is spent from the recipient’s wallet and converted to the local currency of the retailer and settled immediately or daily. • Wallet can have a daily spend limit
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Details to be filled in Actual business logic of the smart contract • Wallet recovery • Daily spending limits • Overflow • Inactive/lost wallets
Request for comments Review, comments, criticisms, support and suggestions for this draft proposal are welcome and invited from all interested parties. Email [email protected]
i http://time.com/money/2795479/spending-‐habits-‐cash-‐versus-‐plastic/ ii http://homelesshub.ca/about-‐homelessness/topics/substance-‐use-‐addiction iii http://thinkprogress.org/economy/2013/10/30/2856411/panhandling-‐stats/
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