Ending Homeless Hunger With the Blockchain

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  

 

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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.  

 

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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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