Cryptocurrencies might not always excite the governing bodies, one cannot deny, however, that the key technology that underpins digital money makes them curious. European Parliamentary Research Service has recently published a report discussing the impact Blockchain technology might produce on social values. It largely acknowledges the potential of technology to transform a variety of aspects of our daily lives from the currency we use to our purchasing behavior. The biggest impact, however, Blockchain is expected to produce on the social values and structures.
At the very recent BlockShow Europe 2017, Cointelegraph had a chat with Paolo Tasca, Executive Director at UCL Centre for Blockchain Technologies, where he shared what kind of social impact we might expect from wider adoption of Blockchain technology.
Time is on Blockchain’s side
Tasca believes that now might be the right time for Blockchain technology to develop further triggering a number of changes outside the world of tech.
“I think that we are now in the transition phase with respect to the aspects of our society. The generation Y, the one that they call Millennials, is really different in terms of mindsets, in terms of the conception of the society, in respect of the common goods. They have less sense of ownership and property rights, they prefer to share, they prefer access instead of ownership.”
The current process of Uberization - that spans from car sharing, accommodation sharing all the way to renting your hard drive storage to those who need it allows to intermediate consumers, producers, lenders and borrowers.
While these platforms are built to respond to the demand of the society to get access to the services in the real-time, on-demand, Tasca emphasizes that they are still controlled by corporations, which are profit-making corporations.
“Uber, Facebook, Airbnb or Lending Club these are all centralized two-sided profit-making platforms which market-mediate suppliers (lenders) and consumers (borrowers). Those platforms are controlled by private corporations that make money, so they are focused on selling services, on acquiring customers to generate the revenue. What Blockchain can bring is the transition to authentic peer-to-peer sharing platforms sit on the top of open and decentralised networks where the participants of the platform are also shareholders of the platform, where basically any value that is generated will be in a fair and transparent fashion redistributed by all the participants without having control by profit-making institution or corporation.”
Tasca shared that he has a huge hope that Blockchain technology can bring this kind of transformation toward decentralized platforms with focus on sharing instead of centralized platforms with focus on selling, and noted that the young generation is more open and ready to understand the type of benefits Blockchain tech can provide and they are ready to embrace this type of paradigm shift.
What governing bodies are looking in Blockchain
Tasca gave a hint on what the European Commission is now doing. It seems to be busy designing what they are calling a Digital Single Market Union, which is said to serve as a tool for the unification of the capital markets in Europe, providing, for example, a possibility to businesses to borrow from other countries.
In this case, the European Commission, as Tasca explained to Cointelegraph, is interested in embedding the Blockchain debate into this discussion over the universal capital market, looking into what kind of benefits technology can bring in terms of costs reduction, increasing the speed of transactions, etc.
“I think that most of the DSM proposals will have a direct impact on the on the infrastructures and firms with a focus on digitizing the European manufacturing sector with smart factories or Industry 4.0. The focus on the citizens as consumers and end-users will come in the second round with better online access to goods and services. Once firms will deploy the cost effective solutions they will also reduce the price for services and products. Supranational organizations, like EU Commission, are interested in redesigning the old infrastructures based on legacy systems by applying new-generation information technologies like Blockchain to enhance the possibility for citizens to seamless access online activities under fair competition. They are not redesigning how the market works, but they are promoting the development of new digital infrastructures based on tools like Blockchain, cloud computing, IoT or big data.”
Surrendering to Blockchain?
Blockchain has been looked at as the tool for improving voting systems, systems of social benefits provision, etc, and it is believed that governments should indeed take a closer look at how they can integrate technology to streamline often complex and complicated systems to be closer to the citizens.
“We have different organizations around the world and each of them has a different mandate and different scope and they are trying to use Blockchain for the welfare efforts, to improve it. For example, there are around 20 mln people in developing countries who are the beneficiaries of aid programs of the UN – food or money, mostly money. But there is no possibility to record the identity or recipients in an efficient way, and most of the time the identity is managed and controlled by the local governments. You know the level of corruption is usually very high and there is also the risk of operational errors because everything is manually recorded in paperwork.”
Tasca believes that the innovative technologies can allow building huge databases managed in a decentralized way for the benefits recipients and in this respect Blockchain will have a huge social impact.
However, when it comes to backing up systems of welfare benefits provision with technologies like Blockchain, which allow a greater degree of transparency, the question of privacy comes to the fore.
“The problem in this respect is not the technology, it is how can you control if the beneficiary is using the support or the aid in the way they are supposed to be using it – instead of buying food maybe they go to buy alcohol or cigarettes. So that is the weak part. By putting the money into a wallet in a digital fashion is not sufficient, you need to trace also where the money has been spent. And if you have traceability maybe through a Blockchain solution, then you can detect if there is a misconduct by the beneficiary. I am not particularly in favor of having a Blockchained society because every aspect of our life will be recorded. The question is “do we really want everything to be recorded permanently in order to enhance trust ?”. This is a kind of tradeoff.”
Transparency vs. privacy
Tasca points out that the technology is very agnostic, it doesn’t have any pretension to be good or bad. However, the use of the Blockchain can have a dramatic impact in a good or in a bad way to the society.
“The governmental body can use the Blockchain to control, to monitor, to do the micromanagement of collaborators to control the whatever activity they are doing but that would mean the violation of the privacy of the citizens. You can also use the Blockchain in a good way to promote government competition. Spontaneous autonomous communities can coordinate and promote their own ideas towards the central governments. They can sustain themselves in a decentralized fashion, and voice their opinion to engage with central authorities. The outcome of these two scenarios, which are basically the opposite, is very dependent on the cultural values of the society we are living in.”
Blockchain is said to bring more transparency to any operations but it also raises important questions of to what extent are we ready to make these operations transparent, what part of operations we are ready to show and to whom, etc.
“Transparency means trust, well, having a record which allows everybody to get an access in a transparent fashion, then it means that everyone can see the historic record of all transactions if it is permissionless. On one side, this is a good thing, as you reduce the asymmetric information, you reduce the imbalance of the information between participants that is indeed an old problem which gave origin to central authorities in our society. So having a society living in a transparent fashion like that is a good thing but it is certainly problematic when we think about the privacy issue and in that respect, the Blockchain needs to be designed in order to grant that private information is protected. I think we can achieve this because the end users of the Blockchain are indeed in control of their data, it is not anymore the platform controlled by the third company which holds your data but you are in control as the person that utilizes the platform. So each person behind any identity shall be able to decide with whom and how much of its identity want to share.”