Is the time ripe for cryptogovernance?
 | |
| A Portrait of Luca Pacioli (c. 1447–1517) |
The arrival of the blockchain has been compared to the invention of double-entry book-keeping (first described in print in the fifteenth century by Italian mathematician Luca Pacioli), which enabled the modern economy. I think that its implications reach far beyond finance, to governance and sustainability.
Unique record
The blockchain proves with certainty that a recorded piece of information — a piece of data, document, transaction, certificate, event or identity — existed at a particular time. If an asset can be assigned a unique digital identifier, such as a barcode, then it can be included.At least four areas related to governance and sustainability could benefit from using the blockchain.
Ownership
From a birth certificate to a fish or a forest, the blockchain can certify the existence and ownership of anything that can be digitalized. For example, a certificate stating a community owns a forest can be logged in the blockchain with a time stamp. The certificate's authenticity can be proved by showing a document that returns the same hash. Start-up companies are beginning to do this — the firm Benben in Accra is developing land-title registries for Ghana using the blockchain, and Georgia and Honduras are doing the same. This could limit the eviction of local populations by industries or corrupt governments.
Traceability
Physical goods can be traced throughout their life cycle. The start-up firm Everledger in London certifies and tracks trade in diamonds, to reduce sales of stolen gems or conflict stones from warlords. The technology platform Provenance, also in London, is developing a blockchain-based protocol to track resources and materials. It worked with the Indonesian fishing industry last year to trace sustainably caught fish along the supply chain. Minerals, wood or food could similarly be followed. Customs officials could spot illegally traded animal parts or plants by using portable DNA barcode scanners.
Other commodities could have their ecological footprints tagged in the blockchain if the footprint were linked to the Internet of Things, with sensors recording the environmental impacts of manufacturing processes. Walmart is tracking its pork supply chain in China by recording information such as farm origin and storage temperature in the blockchain. Companies could also track how much water, energy or raw material they use. The overall environmental impact of firms or consumers could be recorded on the blockchain and sustainable behaviour rewarded through incentives such as tax rebates. Building a life-cycle record of goods would also help to develop the circular economy.
Incentives
Two billion adults worldwide lack banking services. The blockchain could allow them to enter the financial economy: bitcoins can be transferred without a bank account. Communities that have rights to natural resources could receive direct payments in bitcoins for ecosystem services or for meeting conservation targets. Healthy ecosystems could replace other forms of capital storage, such as cattle.
The blockchain could ensure that conservation and development funding is used as intended. Money can be tracked, attached to a specific purpose, have an expiry date or be released when project milestones are met. Funds cannot be siphoned off. Middlemen are cut out.
The blockchain makes it easier to collect insurance against, say, crop damage by wildlife. Payments are immediate, minimizing delay or corruption, although clerks are still needed to assess the damages. Communities could trade renewable energy through the blockchain affordably, quickly and reliably without being controlled by a third party. An Ethereum-based trading platform for carbon credits was launched in March 2017 on the Russian carbon market by a climate finance group.
Policymaking
The blockchain will disrupt all institutions, including governments. A public, shared and immutable register of assets and transactions can help the public to hold politicians accountable. Authorities cannot withdraw or forge evidence, nor seize or shut down blockchain-based institutions.
Votes may be cast as transactions. Blockchain voting has been used by a South Korean community government in a local budget ballot. It is also being implemented for a Danish political party's internal elections, and for shareholders of NASDAQ companies listed on the Tallinn stock exchange. The postal service Australia Post is looking into using it for university and civic elections. The city of Moscow is exploring applying the blockchain to bypass voting fraud. Local communities could be empowered to manage their natural resources through ad hoc voting. For example, fish might be traded on a platform only if harvest quotas were approved by a community-based democratic process.
Comments