Will blockchain fulfill its democratic promise or will it become a tool of big tech? | John Naughton

OWhen the bitcoin cryptocurrency first emerged in 2009, an interesting difference of opinion about it quickly emerged. Journalists tended to dismiss it as some sort of incomprehensible money laundering scam, while IT professionals, who were largely agnostic about bitcoin’s prospects, nevertheless believed that distributed ledger technology (the so-called blockchain ) that underpinned the currency was a great idea. this could have far-reaching consequences.

In this belief, they were joined by legions of techno-libertarians who saw technology as a means to enable economic life without the oppressive oversight of central banks and other regulatory institutions. Blockchain technology had the potential to change the way we buy and sell, interact with government, and verify the authenticity of everything from title deeds to organic vegetables. It combined, grumbled that famed groundbreaking body Goldman Sachs, “the openness of the internet with the security of cryptography to give everyone a faster, more secure way to verify key information and build trust.” In truth, cryptography would set us free.

At its core, a blockchain is just a ledger – a record of timestamped transactions. These transactions can be any movement of money, goods or secure data – a purchase from a store, for example, title deed, allocation of an NHS number or vaccination status, etc. In the offline world, transactions are verified by a central third party – a government agency, bank or Visa, for example. But a blockchain is a distributed (i.e. decentralized) where verification (and therefore reliability) does not come from a central authority but from a consensus of many blockchain users on the validity of a particular transaction. Verified transactions are grouped into ‘blocks’, which are then ‘chained’ using strong cryptography so that, in principle, any retrospective attempt to alter the details of a transaction is visible. And oppressive, rent-seeking authorities like Visa and Mastercard (or, for that matter, Stripe) are nowhere in the chain.

In view of all this, it is easy to understand why the idea of ​​the blockchain evokes utopian hopes: finally, technology sticks it to Man. In this sense, the effervescence that surrounds it reminds me of the beginnings of the internet, when it was truly believed that our contemporaries had invented a technology that was democratizing and liberating and beyond the reach of established power structures. And indeed, the network had – and still has – these desirable affordances. But we are not using them to realize their great potential. Instead, we have YouTube and Netflix. What we have underestimated, in our naivety, is the power of sovereign states, the ruthlessness and capability of corporations, and the passivity of consumers, the combination of which ultimately led to corporate capture of the internet. and the centralization of digital power in the hands of a few giant corporations and national governments. In other words, the same entrapment that happened to revolutionary communication technologies – telephones, radio and television broadcasting, and movies – in the 20th century, memorably recounted by Tim Wu in his book The main switch.

Will this happen to blockchain technology? Let’s hope not, but the enthusiastic endorsement of companies such as Goldman Sachs is not exactly reassuring. The problem with digital technology is that, for engineers, it is both inherently fascinating and alluring, which means they acquire a kind of tunnel vision: they are so focused on finding solutions to technical problems that ‘they are blinded to the larger context. . Currently, for example, consensus-building processes for verifying blockchain transactions are computationally intensive, with a significant carbon footprint. Narrowing this poses some intriguing technical challenges, but focusing on them means the engineering community doesn’t think about the governance issues raised by the technology. There may not be a central authority in a blockchain but, as Vili Lehdonvirta pointed out years ago, there is are rules about what constitutes consensus and, therefore, a question about who exactly makes those rules. The engineers ? The owners of the biggest supercomputers in the chain? Goldman Sachs? These are ultimately political questions, not technical questions.

Blockchain engineers also don’t seem very interested in the needs of humans who might end up being users of the technology. Anyway, that’s the conclusion cryptographer Moxie Marlinspike came to in a fascinating review of the technology. “When people talk about blockchains,” he writes, “they talk about distributed trust, leaderless consensus, and all the mechanisms that work, but often gloss over the reality that clients ultimately cannot participate in those mechanisms. . All network schemes are servers, the trust model is between servers, everything is about servers. Blockchains are designed to be a network of peers, but not designed in such a way that it’s really possible for your mobile device or browser to be one of those peers.

And we are still far from that point.

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