Blog Post

Block Chain Futurism

This is part one of an on-going series about the potential implications of applying the “block chain” infrastructure, originally popularized by Bitcoin, to realms of the modern world other than currencies.  Although monetary transactions are a fine application of block chain technology, there are scores of other administrative, contractual, and titular mechanisms that can now be utterly decentralized, secured, and open-sourced through the utilization of slight variations on the block chain theme and structure.  In fact, many could be implemented tomorrow, if a (small) critical mass of people were willing to hop on board.  Unfortunately, much like the far simpler case of net neutrality, discourse around this subject is often too technical for quick comprehension and, as a result, it is perceived as unimportant by the average internet user.  Cryptocurrencies and block chains are, in fact, here to stay (against all punditry that proclaims otherwise) and I hope you’ll trust me when I say that these technologies are of the utmost importance to you and to anyone else who uses the internet today.  I’ll try to explain why in the following series, beginning here with an introduction on how block chains function.  

 

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Developments in cryptocurrency markets have become a constant source of contention--they are enveloped in the uncertainty and institutional reticence that once seemed a hindrance to the popular adoption of the internet and online finance.  Block chain organizations, smart contracts, crypto-titles and -identities, and other unforetold interventions stemming from Bitcoin’s novel techniques can (and probably will) precipitate an advance in the mutual augmentation of physical and digital spaces that is currently well underway.  These new structures have the power to flatten the informational and monetary hierarchies that bridged the world’s transition from prior physical arrangements to newer digital ones.  Those antiquated structures are not, and will never be, equipped for the maintenance of a decentralized, digital world order.  Block chain models form terra incognita for a new type of democratic governance, for a truly decentralized model far beyond the piecemeal liberties (within a familiarly centralized control structure) that the internet’s progression has granted its users thus far.  Yet, these new infrastructures are not without their flaws.  I will delve more deeply into the drawbacks of block chains in subsequent posts.  First, though, a story about my dad.

 

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My dad called a few days ago.  During the short discussion we shared about classes (“Iranian Cinema is a real class??”) and my little brother and a concert that a friend had just put together on campus, he asked a question that left me in awe and that prompted me to drop my original series topic and pick up a new one.  

 

My father doesn’t have a Facebook because he believes in keeping his personal information personal and spreading it in the old-fashioned way (by talking, of all things…)--he only made a Linkedin last year because it was required by his job.  It is sparsely populated, to say the least.  He frequently calls text messages emails.

 

“Cole, have you ever tried the ‘deep internet?’” he asked, “I downloaded T.O.R. and I would have gone on if I wasn’t using the computer that work makes me use.”  I was absolutely taken aback.  I had “tried it,” I said, and I told him that it was originally funded by the U.S. Navy and that it’s not as secure as it seems to be.  That’s no big deal for most people, but it could become important if you were to draw enough attention to yourself.  

 

“I wanted to see… what’s it called? I wanted to see The Silk Road! I just read some articles about it and it sounds fascinating.”  Another stunned silence on my part.  “And what’s Bitcoin? I know you have to pay with that.”  I needed to gather my wits before I could even address what had just transpired.

 

In order to prevent my father from erroneously (or not erroneously) purchasing loads of black market morphine, I tried to get him to hold off on his dive into the deep web for a little while.  Honestly, I have very little idea about what is out there--very few people do.  It’s massive and it’s extremely lucrative and it couldn’t be further from the sleek, functional minimalism that is the hallmark of many of the interfaces that we deal with on a daily basis.  But it is also truly fascinating, and many of the ideas that have cropped up there may wield immense sway over the future of how we use the internet.  

 

“If you wait until I get home… I’ll tell you more about it when I see you next week, how about that?”

 

I thought that the crisis had been avoided.  Knowing my dad, he was probably attempting to log on as I finished speaking--his absent tone indexed that he was either very tired or very obviously multitasking.  As we hung up, I imagined the havoc that was being wreaked on my family’s computer.  He wouldn’t be able to get very far, at least.  Or so I hoped.  

 

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Although he may be more luddic than conspiratorial about the possibilities of his information being co-opted by private interests, my dad’s caught onto a major trend in the new digital economy.  As social media sites and now-ubiquitous “big data” analysts soak up more and more of the personal information that we offer them, it has become quite obvious that our activities are known by governments, by advertisers, and by Facebook, which provides information to both of the groups mentioned before it.  Visibility online, “computer vision,” “big brother,” Skynet--these notions are all so thoroughly embedded in popular consciousness that they have ceased to hold any coercive power over even hyper-aware internet users.  Instead, many individuals are looking for ways to leverage the aggregative power of the internet (its power to collect and house data) for their own purposes.  How can net transparency rid itself of the power asymmetries gleaned to those who have the privilege of remaining opaque? How can anonymity and “nymity” be used tactically by internet users in order to better the various systems that we take part in? How can the affordances of the digital structure actually be used in order to pave over some of the inequities present in the physical world?  Enter modern cryptography and the block chain.

 

Block chains originated as an elegant solution to a problem known in computer science and economics as the “double spending problem.”  Simplistically, this is a problem that revolves around the ability to spend digital currency more than once (which is possible due to the inherent reproducibility of digital information).  Imagine having a single online concert ticket and selling it to everyone that you know by forwarding them the email confirmation that you have received, replete with a link to the online ticket.  They all “have” a concert ticket now, and you have lots of money, but only the first recipient to arrive at the door of the concert can get in with the single ticket code that you actually made available.  Technically you could show up first, have the experience of the concert, and make all that money.  This is obviously a form of fraud and there have been centralized regulations put in place to prevent this from occurring.  Because there are only digital copies of the ticket, it is difficult (without central oversight--the barcode scanner and some Stubhub insurance, in this example) to make sure that the value of currency does not become disassociated from the currency itself (via).  Real world tethers that connect a currency to its exchange value--the total available supply of said currency, for example--are severed in a conventional currency’s digital counterpart.  Third parties such as creditors, central banks, and corporations must be called in to mediate these exchanges and to make sure that duplication cannot occur.  These third parties keep transaction ledgers and maintain the stability of digital currencies and exchanges.  Third party mediation, however, is expensive and inefficient by many measures.  Block chains are formed by giving the ledgers themselves, so to speak, to everyone that is using them and by giving all these individuals the means to verify the exchanges that have occurred.  The third party is rendered useless.  A double spending problem is solved by the mutual dependency of each of the users on each other, rather than by the centripetal dependency of all users on a single financial entity.  There is a lot more to this, of course, but for now I think that this example will suffice.  

 

Now for the currency itself.  There still must be a regulated amount of currency available for the structure to be stable and valuable, as in the case of other currencies.  There also must be a mechanism for validating all of the transactions taking place at a given time.  “Mining” cryptocurrency fills both of these needs.  For reasons that I will explain in a later post on the politics of “cryptolabor,” the pared down example I will offer next is no longer strictly applicable--in theory and given differing circumstances, however, it would be.   A unit of cryptocurrency is an algorithmically derived, absolutely unique strand of data, appended with a log of when it has been exchanged, to whom, for what, etc.  These two parts of the “coin” are inseparable.  The coins are originally created by computers that are running incredibly complex, time consuming programs in order to solve an open source problem that is constantly in permutation.  The problem is harder (it requires more processing power) when more people are attempting to solve it (the opposite is also true), creating a constant stream of “coins.”  When more people want to trade these coins, their value increases, and sellers/miners make more money.  More people then become miners and the cycle continues, hypothetically, forever.  The problem being solved can also self-assemble based on the number of transactions occurring at any time in a given cryptocurrency server.  No one, besides the users of the “coins” is required at any point in the process, other than in the maintenance of the physical servers.  This is all obviously complicated, but we live in a world of fiat currencies as it is--block chains simply provide a new, more transparent, and more secure means of organizing what is, at its heart, the ephemeral value of exchange power.  

 

I will return to all of this later, but to conclude I would like to point out some of the logical extensions of this new system.  Voting is a great example.  If each person in America were to be given an “election coin” and each candidate, a “pouch,” or a ledger, for these coins, something completely new would happen.  Each coin would be unique to each user (as they consist of a huge string of numbers analyzable by computers but not by individuals) and each user would be granted a single vote (or they could withhold their coin and it would lose its value after the election).  Upon sending their coin to the candidate of their choice, block chain infrastructures make it relatively simple to ensure that no one has voted twice (just make sure no codes are copied), that all codes are relevant and tied to a single person (feed them back through the algorithm itself to make sure they are valid) and that votes cannot be moved from their original destination (the appended log of transactions basically ensures this).  There was no need for an electoral college, there was no voting related reason for a bipartisan system, and everyone who voted can double check the results for themselves (if they have the adequate computing power to run the numbers).  In addition, no personal information is recorded along with the coin so voter anonymity is preserved--the coin and the person are only identified as long as the string of data remains in the “possession” of that person, but it holds the same value when it is deposited.  This would be akin to everyone in the country being given a single piece of blank paper so that they could vote by dropping it into the box of their desired candidate.  All you would have to do is count the pieces of paper in the boxes.  This all would occur, digitally, at the press of a button.  Voting would become more infinitely more efficient, more transparent, and more reflective of the actual needs of the people.  

 

Or what about identity fraud? If each person was assigned a string of data absolutely unique to them (something like a social security number but orders of magnitude more difficult to steal) for an added layer of security, what would change?  Demographic analysis would immediately take note of the duplicity of a certain data set in the blockchain and the problem would have to be resolved before any sort of transaction can go through the system.  The same structure could be applied to property titles, copyright agreements and anything else in that vein.  There would be very little room for redundancy, if any, and every user would understand that to be the case.  State administrative offices would be freed from a massive portion of their duties.  


What does all this mean politically? Could it be used to create decentralization for some and even more rigid control for others (unregistered immigrants for example)?  Can it be hacked and ruined for everyone in a classic common action problem outcome? Is this just the neo-liberal/libertarian dream for the internet partially actualized? Maybe.  Can cryptocurrency be reconciled with opinions that are, in my opinion, more socially just than the libertarian ones that currently circulate around it?  I will explore these possibilities and many others as this series goes on.  Thanks for reading.  

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