Thanks a lot for the reaction Stephen Johnston— these are excellent questions.
The impact attribution question in particular is very important. Impact attribution (how do we know that outcome X is a result of input Y) is a problem that has plagued impact work from the beginning. I don’t think we can solve that problem completely. However, with the approach that I propose we will save a lot of money on monitoring. We should use part of those savings to do better/ more comprehensive population-level research, which will prove correlations and will provide us with attribution theories that I believe should be good enough.
Also, with time, Theories of Change used when designing impact tokens will be increasingly based on population-level data as well as high quality operational insights, which will strengthen the assumption that, for example, “A minimum of X vaccination in one year will lead to Y reduction is disease incidence”. Modeling such theories with quality demographic data should be pretty reliable and increasingly so.
On the second point — why use blockchain vs. Kickstarter. Due to the possibility to use distributed verification as a proof of work protocol for this impact token (i.e. every coin that gets minted is underwritten by a concrete, unique impact event) you eliminate the need for trust mediators in raising capital & implementing activities. This is essential. If we would go now on kickstarter and try to raise money, our investors have no way to know that what we report to them is genuine — we could as well be slick scamsters exploiting people’s emotions. Because of that we will be forced to hire a trusted third party to verify our claims — more money in mediation, less in implementation. This approach is not so much about novel ways to raise funds. It is about making it interesting for private (profit seeking) capital to enter the impact space. It is about unlocking bottom-up innovation (at the level of community) & rewarding the people who do the work, rather than the people who raise the money. Most excitingly, this would allow us to bring impact investing to the little man — away from the Goldmans and the UBSes. In the process, perhaps we manage to usher in a world where impact is a legit asset, just like bonds or equity.
With this decentralized approach we will also eliminate virtually all costs of setting up a SIB. We would simply use an existing blockchain that allows smart contracts (Ethereum or one of the new gen ones such as raiblocks or byteball) and the token would be made available on regular exchanges. The Donor’s commitment is unilateral so that should be simple. The only think we need is distributed Verification, which is what we are busy building here at POI.
There is a lot of potential to build instruments that fund a mix of interventions (i.e. tokens with more complex milestones scripted in, or index types tokens that track verifications across a number of interventions). We can also imagine a platform where individual investors/ impact providers design unique, custom tokens that would allow the investment in highly specific, even individual interventions. At the end of the day, an impact token is nothing but a self-contained, self-executing digital asset.
I love the reverse auction & using qual stuff (like happiness) in the mix. In fact distributed verification based on human input should be an excellent solution to evaluating highly qualitative stuff such as happiness, engagement, etc. I think there are great use cases in the space of mental health as well — depression etc.
Obviously, any capital raised for impact needs to go to higher incentives to people who contribute to impact delivery — rewarding those at the frontline who do the most important work. This is a core proposition in this approach — here is a recent post I wrote on this topic
Thanks again for your thoughts and challenges— and for the links. We think alike. We should touch base soon and exchange notes.