The inhabitants of Tuvalu, a small island nation in the South Pacific, could become the world’s first blockchain citizens, whose identity, citizenship and financial data are secured on a public blockchain. In December 2020, the Tuvaluan government announced that it would embark on a massive digital migration project which would see it integrate its governance and financial systems with the BSV public ledger and become the world’s first paperless society.

Tuvalu is collaborating with leading enterprise blockchain technology company nChain, blockchain consultancy Elas Digital and community-tech consultancy Faiā on the project. These organisations are working together to build the Tuvalu National Digital Ledger on the public BSV blockchain, which provides a reliable and efficient foundation thanks to its unbounded scaling, low transaction fees and locked-down protocol.

Tuvalu has a population of around 11,000 people, limited electronic banking infrastructure and is threatened by rising sea levels. One of the country’s greatest assets, however, is its ownership of the ‘.tv’ top-level domain, which has seen a surge in global demand thanks to the growth of online video streaming platforms.

Faiā managing director and founder George Siosi Samuels, who is of Tuvaluan heritage (and whose maternal grandmother is descended from the Fakaua clan of Nanumea) spotted the potential in using this asset to expedite the country’s digital transformation and potentially raise its islands to mitigate the danger of climate change. After he published a five-step plan for saving Tuvalu from climate change while also overhauling its digital infrastructure, the government reached out to Samuels and coordinated with Faiā, nChain and Elas Digital to realise this vision.

The plan begins with hosting a bidding war for the ‘.tv’ domain, the proceeds of which will partly be spent on building out digital infrastructure to facilitate the creation of the Tuvalu National Digital Ledger. BSV was chosen for the digital ledger project due to its exceptional stability and scalability, supporting cheap and efficient transactions enabled by its removal of block size limits, which greatly improves transaction processing cost and capacity.

As implementation of the national ledger continues to progress, Faiā founder George Siosi Samuels, Elas Digital founder Brendan Lee and nChain director of business services Simit Naik provide further insight on how the technology will be applied and what it means for the people of Tuvalu.

Clearing up misconceptions

Faiā managing director George Siosi Samuels is confident that the Tuvaluan people will embrace their new digital citizenship. He explains that there are many misconceptions about the technological literacy of Tuvalu’s residents and that many Tuvaluans are already finding innovative ways to work around the lack of an electronic banking system in the country.

‘One of the first things that we want to address is the misconception of a smaller island nation being almost primitive – and I understand why people think this,’ Samuels says.

‘But the Internet in Tuvalu is fast enough to do Zoom calls, most of the people already have mobile phones and some of them are finding solutions to get around the fact that most of the islanders can’t use their credit cards locally for a lot of online e-commerce services.’

‘[The people of Tuvalu] are very much aware of what’s available in the world and their Internet infrastructure. They are already in the process of upgrading everything and they have access to the Internet that is adequate to get things online.’

Faiā’s three foundational pillars are culture, community and technology, all of which Samuels is leveraging to ensure the Tuvaluan people are engaged in the process of building their own national digital ledger.

Samuels is an expert on culture and community in the technology sphere, having been involved with blockchain technology since 2013, while accumulating vast experience in the world of community-driven initiatives and projects in the physical world. His company is drawing on this expertise to support the cultural agility of Tuvalu and deliver transparency in the deployment of the national digital ledger, ensuring engagement with the community at every step of the process.

‘I’ve dealt with the cultural and change management aspects of many technology rollouts and companies, and I understand that a certain culture or group of people need to be ready for certain types of change,’ he says.

If they’re not, you need to be able to identify the behaviours to help move them towards that and you must get the buy-in of all the key stakeholders.

Tuvalu’s national identity is shifting significantly as part of its ICT migration plan – which includes the national digital ledger project – and which has great potential to attract Tuvaluans living abroad back to the island nation.

‘Tuvalu wants to shift the narrative from being a sinking nation to becoming an innovation nation and they have a lot of very smart Tuvaluans that studied and moved overseas,’ Samuels says.

‘Part of this this project is also about bringing the brainpower back to work in their ancestral homeland.’

Samuels remains confident in the future of the Tuvalu National Digital Ledger initiative in so small part due to the innate cultural agility and supportive community of the country. He also notes that while the foundation of this platform will be built on the blockchain, users and many developers building on that technology will never need to interact with the BSV protocol directly.

‘If you treat BSV itself as boring plumbing, then it is no different to the Internet itself, in which case you really just need to focus on is building good applications,’ he explains.

Due to the long-term nature of the project and its staged rollout, Samuels is confident that development of the Tuvalu National Digital Ledger will be able to progress unhindered as the underlying ‘plumbing’ continues to be fine-tuned.

The second phase of the project is also set to begin soon and will comprise more widespread engagement with Tuvaluan citizens as well as the publication of regular updates on the project’s deployment.

‘I’m really looking forward to phase two – we’re going to start looking at the civic engagement, both online and offline, and putting out more frequent communications,’ Samuels says.

‘Now that we’ve done phase one, it’s a lot clearer as to how we will engage with the general community moving forward. And this is where we get to highlight the community aspect of the project.’

Services on the Tuvalu National Digital Ledger

The underlying foundation of the Tuvalu National Digital Ledger will be the public BSV blockchain, which offers unparalleled transaction throughput, stability and ultra-low transaction fees. Atop of this cutting-edge network, Tuvalu will run a set of encrypted permissioned ledgers using the Metanet protocol, which enables a value-based Internet platform built on BSV. Metanet is a protocol for the creation of transactions that are structured in a way which enables on-chain data structures. These data structures are secured by the underlying immutability and reliability of the public ledger, while also ensuring that information regarding Tuvaluan citizens remains private and encrypted.

‘The original vision for the Tuvalu National Digital Ledger was framed as a set of managed ledgers held within a single unified Metanet data structure and comprised of many separate sub-ledgers, each providing some type of functionality for the Tuvaluan government,’ says Elas Digital founder Brendan Lee.

‘We are very fortunate that the government immediately understood what the broader proposal meant and were willing to take a leap and become the first government to use Metanet as a system for civic management.’

‘With strategic application of state-of-the-art encryption technology, we can keep private information private, while giving anyone accessing the private information a very public and open means by which to verify its provenance,’ he adds.

Elas Digital, nChain, and Faiā are not creating the ledger itself – they act as service providers that will provide the tools to the Tuvaluan people to build and populate their own national digital ledger. This ensures that the Tuvaluans have complete authority and control over their own information.

‘The material contents of the Tuvalu National Digital Ledger will be created, owned and 100% controlled by the people of Tuvalu. We will work with them to make sure that our tools do what they need,’ Lee says.

Applications will also be developed on top of the national digital ledger as part of Tuvalu’s digital migration process, beginning with a portal to manage citizenship applications.

‘The first application we are developing is a portal to manage the Tuvaluan citizenship application processing system. I think this is actually a great first step, as it solves a difficult and wide-ranging set of administrative problems for the Tuvaluans without creating something they need to rely on from day one for government services,’ Lee says.

‘Over time, we aim to replace almost all paper-based government services (e.g., fishing licenses, land transfer, birth/deaths/marriages, etc.) with blockchain equivalents, in each case aiming to provide the same outcomes, with the efficiency, speed and low cost of BSV.’

This will be something the group does in consultation with the people of Tuvalu over time, but eventually, the ledger should cover all aspects of the country’s government, financial and retail services.

Providing digital cash for Tuvalu

Tuvalu currently uses the Australian Dollar (AUD), as it does not have its own currency. The group will therefore provide the tools to operate a tokenised version of this currency on the national digital ledger.‘Tuvalu primarily uses the Australian Dollar as its main currency and so our approach will focus on providing a tokenised form of the AUD for use as digital cash. BSV will be the ledger that will underpin the tokenised currency for Tuvalu,’ nChain director of business services Simit Naik explains.

‘We know that change is always difficult and new technology can seem complex and overwhelming. Our strategy is to minimise the impact of any potential change and maintaining the use of the AUD is a core part of our thinking in Tuvalu.’

Physical cash still plays an important part in Tuvalu’s economy and nChain is focused on delivering a solution that maintains all the benefits of cash, but enhanced by digital functionality.

Naik says their strategy will maintain the existing cash system while adding the benefits of greater accessibility, digital payments and micropayments. It will also address some of the challenges of cash, including distribution and monitoring.

This forms part of the first phase of the Tuvalu National Digital Ledger’s implementation, along with the development of a portal for citizenship applications.

‘In the initial phase, we will focus on two key areas: the citizenship process and digital cash. The initial phase of the citizenship process will lay the foundations of the Tuvaluan National Digital Ledger, with future phases building on these registries to deliver enhanced capabilities, such as national digital identity frameworks,’ Naik says.

‘The digital cash system will be designed to address the biggest challenges of cash usage in Tuvalu, including providing better access to cash and the ability to make digital payments and micropayments. From a government perspective, we will be delivering different channels to distribute cash and monitor the circulation of cash across the nine islands.’

Like Faiā and Elas Digital, nChain is acutely aware of the need to educate the world about blockchain-based projects as well as the societal and cultural factors affecting the Tuvalu National Digital Ledger plan.

‘When we consider blockchain, the biggest challenge we face is the misunderstanding of public vs private blockchains and the role of the blockchain itself,’ Naik explains.

‘It is our role to ensure we address these via education and outreach and playing the role as thought leaders in this space. We foresee a lot of these issues arising from outside of Tuvalu, so our work will need to focus on ensuring those other countries and interested parties fully understand how the choice of technology helps us to deliver the right solution for the challenges and drivers of our client.’

He notes that the deployment of Tuvalu’s National Digital Ledger will be managed and carefully staged to ensure the country’s people are given the opportunity to fully understand and support the digital migration project.

‘With any digital transformation programme, particularly those we see as revolutionary programmes of work, we need to ensure we take into account cultural and societal drivers to manage the rollout of any new technology,’ Naik says.

‘In Tuvalu, we are mindful of pushing too much change in a short period of time, so we are focused on delivering incremental changes to ensure we support Tuvalu in the transformation journey.’

The Tuvalu National Digital Ledger project is unique in the world of blockchain and cryptocurrency; it is a government initiative that leverages the underlying technology of the BSV public ledger and as a result, progress will be carefully measured and consultancy will continue throughout its implementation.

In an environment rocked by unscrupulous cryptocurrency ‘investment schemes’, over-inflated initial coin offerings (ICOs) and the speculative buying of volatile digital tokens for quick returns, BSV has cemented its position as a source of stability and the best blockchain for everyone from enterprises and governments through to hobbyist developers all to build applications on.

The Tuvaluan government continues to consult extensively regarding its digital migration plans and remains committed to BSV as the best option to meet the country’s needs.

More information on the Tuvalu National Digital Ledger project is expected to be released this year, along with a dedicated portal to elicit feedback from citizens and provide public updates on the initiative.