It has become a cliché in popular writing about blockchain to declare it a technology so all-encompassing that it is difficult to unpack.
Boosters like to skirt the parsing of the technological and ideological aspects of blockchain with quips like ‘you don’t need to understand electricity to use a lightbulb’. I prefer to treat blockchain as a discourse first and a technology second.
In the field of media and communication studies, discourses are understood as powerful ideological apparatuses whose descriptions of the world can shape material practices around their appeal to a universal truth. Blockchain aspires to be what Foucault would call a regime of truth, intermediating all manner of social and economic life and structuring it in the process.
If that sounds impossibly grandiose and dystopian, one simply needs to refer the key blockchain lobbyist in New Zealand, Mark Pascall, who recently specified blockchain as ‘an immutable source of truth’. It is this pretension to truth that has seen blockchain gain a regulatory foothold as in the Arizona Electronic Transactions Act (Amendment HB2417) which describes blockchain as “uncensored truth”.
This power as a discourse is key to securing financial and intellectual investments in the blockchain rubric that would adjudicate our digital lives.
A common plea from blockchain proponents is that they should be in no way mistaken for the vulgar anti-statists and cyber-libertarians of Bitcoin. This makes sense because the state will be necessary in both legally recognising and purchasing blockchain platforms for e-governance solutions. Crypto currencies are also defined in the popular imagination by stupendous waste, transparent fraud and the dark web of drugs, terrorists and child pornography. A bit of a PR nightmare you could say. Despite these disavowals, I contend that the blockchain future that its supporters put forward would represent the bitcoinification of social relations.
Time now to describe the technical properties and claims of blockchain. What bitcoin demonstrably achieves is an encrypted and distributed ledger of every transaction available to all users. The mining or production of the currency is based on completing an exponentially harder set of equations which will encrypt a new block of transactions on to the chain.
Users compete to be the first to create a block, which releases a dwindling and ultimately finite set of bitcoins. This is what is referred to as ‘Proof of Work’ (PoW); it consumes an enormous amount of electricity and lays bare the socially-constructed nature of ‘value’ in bitcoin circles. However easy it is to mock the fetishisation of graphics cards and servers overheating for the needless computation of this insular world, it does largely achieve an encrypted, immutable and permissionless record.
Distinguishing the bitcoin blockchain from what I term the “beyond money” blockchain is difficult in that the latter wants all the sweeping universal claims of the former without the ideological baggage or the ability to deliver it.
The beyond money blockchain may include financial assets, tokens and crypto-currencies, but by and large seeks to govern the distribution of information and resources within, and between, organisations. This is done through smart contracts, algorithmically governed to release goods open to the fulfilment of encoded conditions.
There have even been experiments to create decentralised blockchain corporations and venture capital funds. The most prominent example of which was The DAO, the largest ever crowd-sourced project trumpeted as “the steadfast iron will of code”, but which ended in a $50 million rip-off and the forking of the Ethereum blockchain. While there has been considerable venture capital funding, most blockchain projects remain in the realm of corporate pilot projects, financial firms looking to get in on the ground floor and governance trials in the NGO and development sector, where my research is currently focused.
Ethereum is a crypto currency theoretically the best placed for developing a kind of master blockchain as it allows applications to be built on it. However, the majority of these “Initial Coin Offerings” have been scams. One of the Ethereum founders, Joe Lubin, has made the beyond money blockchain his central occupation starting the blockchain incubator ConsenSys which boasts over 40 start-ups, but to date has been largely a sink for his crypto fortune.
Other projects, from Facebook’s Libra gambit to the World Food Program’s Building Blocks, couch themselves in the discourse of blockchain while not resembling the technology in any meaningful sense. Blockchain may well be useful for corporate supply chain management systems, despite its present slow processing time and expense, however, this modest corporate governance tech does not reach the dizzying rhetorical heights normally associated with blockchain.
The idea of a universal blockchain governance solution is couched in terms of individual liberation and security for our total digital immersion in Web 3.0. In this vision of the future, where social resources are mediated almost entirely through networks, blockchain would secure one’s identity and allow the user to bypass all mediating institutions, whether companies like Facebook or the state.
One might access government services, buy or trade a micro-share of a house, accrue reputation points for the fulfilment of digital contracts or work for a digitally autonomous organisation; all through blockchain technologies. Lubin calls this the “trust revolution” in which the encrypted “truth” of our identities and transactions would free us to pursue all manner of creative undertakings. In a further telling coinage he effusively speaks of “collective capitalism” which amounts to the libertarian crypto utopia and negative freedom of pursuing life as a series of micro-property transactions; all masked by the network paeans of “decentralisation” and “collaboration”.
The problem with this vision of the future is not merely its unflinching acceleration of data and platform capitalism but the radical inequities it would naturalise under the rubric of “truth”. Where the bitcoin blockchain’s PoW mechanism provides a pretty good accounting of this ecosystem, however terrible an idea bitcoin may be, the architecture of the beyond money blockchain is far more haphazard.
Proof of Stake (PoS) is the solution proffered to the stupendous waste of bitcoin. What PoS does is augment algorithmic governance by apportioning power based on ‘who holds coins inside of the system’. In simpler terms the great governance innovation of the beyond money blockchain will be to give power to those that already have it. This is what I mean by the bitcoinification of social and political decision-making processes. Where the rapacious libertarianism of bitcoin has an encrypted record of relative and insular truth, the beyond money blockchain both disavows this politics while presenting itself as transcendent universal truth.
Evgeny Morozov has described our political moment as one of an ascendant “techno-solutionism”, where the messy reality of human democratic systems look like “problems” in need of techno-fixes. At its most harmless, it yields such mockable tech-fails as the Vessyl smart cup, or at its worst it changes human systems to comport to the edicts of code as in the case of Arizona law.
What blockchain governance solutions propose as problems are the essentially discursive, mutable and contestable processes of democracy. The “solution” proposed by smart contracts is replacing democratic safeguards with self-executing code on proprietary platforms. In a process where human systems assume the characteristics of code, blockchain would serve as a new intermediating power that abstracts and decentralises its libertarian politics.
Thus, as lobbyists and advocates challenge lawmakers to embrace blockchain or be left behind, we should be cognisant of the sweeping discursive and ideological claims masquerading as the technology of truth.
A former journalist and media worker Dr Olivier Jutel’s research agenda is highly interdisciplinary bringing together critical theory, social movement theory, journalism studies and psychoanalysis.