Not
so long ago, the internet was hailed as the solution to humanity’s ills. It
would shine a light on all corners of the globe, bringing new knowledge and
exchange. But growing concerns about fake news, surveillance, cybercrime,
social media addiction and monopolised power have tarnished that shine. Without
ignoring the internet’s positive impact over the past few decades, these
difficulties remind us that a technology-driven utopia – or technotopia – is a
fiction. People and governance always shape the use and impact of a technology.
Today’s advocates of
blockchain and digital currencies describe the potential for
more privacy, transparency, accountability, efficiency and competition in all
forms of commerce, finance and
bureaucracy. Some see blockchain as providing technologies for democracy
itself, from elections to budgeting. While some claims seem overblown or
premature, there are already some fascinating
applications in the fields of logistics, inventory and supply
chain management.
Despite these advances, there has been a
growing backlash from opinion leaders as the technology’s drawbacks become
better known. Perhaps you’ve heard that Bitcoin alone uses 0.25% of the
world’s electricity? Other blockchain systems, such as Ethereum,
use similar approaches that require computers to burn electricity
unnecessarily. Perhaps you are concerned about the number of accidents, hacks
and scams possible in this new space, where the law has not yet found its feet?
Or you may have heard that crime and terror networks could use these
technologies to transfer funds. Blockchains and digital currencies pose
important questions to both their advocates and regulators.
Pioneers
in the industry are alert to such concerns and have attempted collective self-regulation.
The Brooklyn Project, an industry-wide initiative
to support investor and consumer protection, was launched in November 2017.
“By acting responsibly today, we can help
make sure we are collectively able to reap the benefits of this powerful
technology tomorrow,” explained co-founder of Ethereum Joseph Lubin. The
following month, a coalition of cryptocurrency organizations and investors
representing $650m in market capitalization established Project Transparency. It seeks to protect
investors by enabling more disclosure within the digital currency sector.
These
initiatives are welcome, but neither address how the technology affects wider
society and the environment. If this sector is going to disrupt incumbent
organisations (management-speak for people losing their jobs) then the general
public will soon ask what the upsides really are.
In recent months, many blockchain projects
explicit about their social mission have launched. Bflow.io offers a system for reporting
corporate sustainability. Alice.si strives for greater
accountability from charities. Provenance.org tracks tuna from shore to
plate, giving consumers confidence in sustainability. BitLandGlobal is seeking a step change in
land registration by the rural poor. Specialist think-tank Blockchain for Good has been established
to promote blockchain’s benefits for worthy causes. Nevertheless, on closer
analysis, many of these ‘4good’ projects miss a crucial factor – the impact of
their code itself.
Is it appropriate for people apparently
seeking economic justice and equal opportunity to use a blockchain in which
only heavily invested actors receive new tokens? Is it appropriate for those
seeking to put a new medium of exchange in the hands of the masses to use a
blockchain whose tokens are mostly hoarded by speculators? Is it appropriate
for a carbon emissions reduction project to use a blockchain which emits as
much CO2 as a small country?
These are not hypothetical examples. Most
blockchain projects bolt a purpose onto code and governance systems that were
designed without such public interests in mind. Just as it would not be
acceptable to clear the ancient Borneo jungle to raise money for homeless
orangutans, it should not be acceptable for a project to deploy socially
regressive or climate-toxic code.
Fortunately,
there is a new wave of mission-driven blockchain projects conscious about their
total social impact. Initiatives like Holochain, Faircoin, Yetta and LocalPay explicitly connect their code
base to their social cause. Faircoin uses a codebase that requires
little electricity and allows the distribution of coins to socially useful
projects. Providing the same smart contract functionality as Ethereum, the new Yetta blockchain is intended to be
sustainable by design, with the low energy requirements of its codebase being
moderated further by automated rewards for those nodes using renewable energy.
It will also enable automated philanthropy to support the Sustainable Development Goals (SDGs).
Two of the most integral technology projects in this
field take a post-blockchain approach. By sharing data and not using a single
blockchain, Holochain reduces the energy and time
involved, while avoiding being dependent on the decisions of unaccountable
groups of computing “miners”, as so many blockchain projects are. Shunning
digital tokens entirely, LocalPay runs on code that means its
users in more than 300 local communities do not need to purchase or mine a
currency to begin transacting. For them, currency is simply a unit that comes
into being, for free, when they wish to trade.
These projects aren’t just putting lipstick
on clones of existing projects. Their founders went back to the drawing board
and created mission-driven roles for coders, entrepreneurs, investors,
philanthropists, regulators and policymakers. They designed a technology to fit
into an ecosystem, rather than to dominate it. They set up incentive structures
for fair contributions and rewards. This generation of “integral blockchain”
and digital currency initiatives aligns its codebase and internal governance
with positive social and environmental outcomes. These projects strive to be an
integral part of a healthy society, rather than ends-in-themselves.
Will blockchain technologies be killed in
their infancy by regulators? Will they grow into monsters that consume energy
while enabling tax evasion, crime and capital flight? Or could they provide
meaningful services to humanity? Greater cross-sectoral dialogue and guidance
is needed to help this last scenario emerge.
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.JPG "L-r: Olabanji Soledayo, Marketing and Retail Sales Manager, ESET West Africa; Seun Dania, Founder and Chief Executive Officer of Tradefada; Jude Ozinegbe, Founder and Convener and Dr. Oluseyi Akindeinde, Co-Founder/CTO, Digital Encode Limited, during a panel session Blockchain | Cryptocurrency | Cybersecurity and the Future of Money, at AfriTECH 2.0")
