Blockchain technologies are either the next big thing, or the next big hype. It is no small wonder that hundreds of regulators, lawyers, bankers, consultants, philosophers, and technologists from all over the world gathered in Sydney at the Blockchain Workshops to understand this technology, it’s potential, as well as it’s likely impact on society (and, of course, how – or whether – to regulate it). Technologists are experimenting beyond the virtual currencies – like Bitcoin – that blockchain technologies have initially enabled. However, it’s the engineer’s relatively idealistic mindsets and ideas that have driven the technologies’ design, which warranted a closer look from my side.
What is this thing? The wide-scale development of blockchain technology started with a paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System“, which introduced a distributed transaction ledger functionality – a continually updated database stored on countless participating machines around the world. Basically, this means that the blockchain enables transactions that remove the necessity of a trusted middleman – such as a bank – which has led to the rise of virtual cryptographic currencies. It appears the technology can be used for much, much more, such as self-executing contracts, more intelligent automated asset management, participatory decision-making structures (looking at you now, democracies!), and even decentralised and autonomous organisations.
While the technology appears to still be in a beta-stage of development, many young and bright engineers are religiously working to improve this technology and learning from some of the flaws in earlier systems. The promises to “decentralise everything”, making the word more transparent, weakening traditional hierarchies of control while improving security are some of the main drivers for this rapid development. For example, the Ethereum Project is using Block technology to build its promising platform for further trustless systems development, while a company called Filament is building innovative but practical industrial communication systems. There appear to be many applications for the Blockchain.
Not everyone instantly shares the techno-anarchic (but still very much capitalist) ideals of creating a computer-mediated society where the lack of centralised control is a programmed in virtue. Strict innovation-permission type legislation is being proposed in places like California and New York (mainly focussed on virtual currencies so far), while the UK contends itself with innovation friendly self-regulation. It was hard to get a sense of what the regulators at the Sydney conference were thinking while they were being educated on the details of Blockchain technologies. A great source to get to grips with some legal impacts of these technologies is the paper “Decentralized Blockchain Technology and the Rise of Lex Cryptographia” by Primavera di Filippi and Aaron Wright.
A core group of six non-techies spent the week in Sydney figuring out what the ethical and social impacts of Blockchains are likely to be. It became obvious to us that this technology has inbuilt assumptions and values that may cause significant power shift in society and disrupt existing structures. The engineers were quick to point out that they want to “do good“ with their inventions, and are open to cross-disciplinary conversations about the further development of the Blockchain. It will be important to continue this open conversation about Blockchain technologies, to assess their impacts, and refrain from reactive over-regulation. The forthcoming ethical analysis will hopefully inform stakeholders and structure this conversation meaningfully!