How Blockchain could disrupt democracy and governance

 

“It has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time”

Winston S Churchill, 11 November 1947

 

While preparing for our class on Blockchain this week, the political junkie in me couldn’t help contemplating all of the possible ways that this technology might be bad for citizens and for democratic institutions around the world.

 

The fallacy of the Internet is that is the “Great Democratizer” – a great equalizer that gives all citizens access to universal access to information and an opportunity to prosper. But a 2016 report from the World Bank showed that internet adoption has actually coincided with a growth in income inequality. Is there any reason to believe that Blockchain has the potential to lead to equitable economic growth?

 

Picture1.png

Income Growth – Top 1% of Earners vs. Bottom 90% of Earners

With the risk of plagiarizing a Bernie Sanders’s speech, social mobility is becoming increasingly difficult in the United States. In many parts of the U.S., it appears that millennials may be the first generation of Americans with a lower quality of life than their parents’ generation. It’s hard not to read about Blockchain and imagine some dystopian future where social mobility is nearly impossible. Many successful stories about entrepreneurship involve some kind of tale where the founder manages to bluff their way to success. Entrepreneurs fail and manage to convince someone to give them a second chance. Do we really want a shared ledger where all of your red flags and failures are documented?

 

Then there is the question of trust and privacy. It seems contradictory that a system could enable monetary and non-monetary transactions that are simultaneously efficient, private, secure, and transparent. We naturally assume that the efficiency comes at the expense of security. It seems illogical that a system could be both private and transparent for the parties involved.

 

Nevertheless, the general consensus seems to be that Blockchain will change democracy and government for the better. Here are some of the ways where Blockchain could change our lives as citizens for the better:

 

#1. Better elections:

Blockchain could make elections more efficient and reliable. Attempts to introduce e-voting have failed in many countries around the world, but skeptics argue that it is incapable of being fully embraced due to concerns about traditional server technology. The risk of corruption through e-voting would essentially be eliminated by Blockchain as citizens would have the ability to confirm who they voted for and that their voted was counted.

 

#2. More accountable Government representatives:

The Supreme Court’s decision in Citizens United v. FEC prohibited the Government from placing any restrictions on campaign contributions from corporations. Blockchain has the potential to reduce the influence of corporations in elections and give the power back to citizens to hold their elected officials accountable. Citizens could enter smart contracts with their elected officials where their campaign contribution would be contingent on following through on campaign promises.

 

#3. Participatory Government: 

Could Blockchain eliminate the need for representative democracy? If Blockchain could enable e-voting for elections, perhaps it could also eliminate the need for Senators and members of Congress. The majority of constitutions in the Western World were drafted in an era before aviation travel, phones, computers and other everyday technologies. Blockchain theoretically enable pure, participatory democracy, where people vote and form consensus on policy initiatives directly.

 

#4. More efficient services for citizens:

Whether you are registering a birth, or buying a house or a car, or trying to access your health records, or registering a company, dealing with the Government can be complicated and time-consuming. From digital property titles to patient-controlled (as opposed to physician-held) electronic health records, Blockchain offers the potential for better delivery of Government services.

 

#5. Better identity management:

Blockchain will likely lead to better identity management. From the Government’s perspective, this will encourage better intra-agency cooperation aiding national security efforts. Better identity management using Blockchain may also reduce social welfare fraud (which most citizens will be in favor of, however, there already some concerns in Britain that the Government may force recipients to spend welfare payments on specific things).

 

#6. Democrats and Republicans could work together:

Benjamin Franklin remarked that in this world “nothing can be said to be certain, except death and taxes”. If Blockchain does successfully displace existing intermediary institutions (such as employers, retailers, financial institutions who tend to withhold income taxes, sales taxes, and capital gains taxes and interest taxes), it is only a matter of time until the taxation system is reimagined for a Blockchain world.

 

It has been 31 years since Congress passed meaning tax reform. If intermediary institutions are displaced by Blockchain, one can expect that both sides of the aisle may finally start to work together.

9 comments

  1. Really neat post, and I now have a better understanding of the point you were making in class about income inequality! With all the news last year about America’s broken/vulnerable voting machines, it would make a lot of sense to transition to blockchain, once we get to the point where government officials and the public trust the technology to that extent. I like the idea that blockchain could get rid of the need for representative democracies, but I don’t think that’ll happen anytime soon – people don’t want to weigh in on every single issue that our elected representatives spend time learning about! And blockchain for tax reform is a great idea, I can only wonder what the post-blockchain tax codes would look like! This was a great post, and it’s clear that you’ve given the issue a great deal of thought, thanks for sharing!

    1. Great point Josh – I agree, I think it’s unlikely that the average citizens wants to get into the small details of policy/bills.

  2. fayehubregsen · ·

    Wow, this is a fascinating look at the government implications of widespread blockchain implementation. One of my lingering discomforts with this concept is the seeming inaccessibility to the masses — particularly anyone who does not have the necessary tech resources. Would it be a “Great Democratizer” or would these voices be silenced by lack of Internet access? Maybe the government would have to achieve universal access for citizens before embracing this technology.

    1. Completely agree, there are definitely accessibility and tech literacy issues. I feel like a lot of the Government services that available online at the moment are also available offline.

  3. lenskubal · ·

    This was a really interesting post. I think Blockchain certainly has capabilities in this area, and its effects could be huge. I disagree with a few applications yiu suggested, but many of them seem possible. In particular, I loved your observation that Blockchain could make for better elections. This area seems to be a very applicable scenario to implement Blockchain. Your next point, which essentially ties into the first, suggests that Blockchain could eliminate the need for representative democracy. I think this could certainly be the way of the future, and I am interested to see how Blockchain will unfold in our communities and country.

  4. Great post. You could’ve easily stayed simple in your implications, but instead chose to be creative and offer some awesome new ideas, which really helped to make the blog post go from good to great. I specifically enjoyed your point about identity management, which can potentially have several private sector implications as well. I can definitely see several startups in the blockchain space with a focus on identity management, as the market could prove to be highly profitable.

    1. Thanks Michael – I think the issues of identity management and IDs for Government-citizen interactions are sensitive in terms of civil liberties, but I agree there are endless private sector applications, where this will probably occur first.

  5. terencenixdorf · ·

    Really interesting post, Paul. When I think of blockchain, I always think of a revamping of the financial system or just eliminated inefficiencies. I like how you took this post further, with a topic you’re clearly passionate about, and listed all of the different ways that blockchain could be used to disrupt that. Prior to taking this class I found myself to be very narrow-minded on technological innovations – mostly thinking of the obvious advancements that the new tech would occur. I think that the way you took it a step further and thought about how great of a disruption blockchain could be to the democratic system is a perfect example of what this class has taught me. New tech has ramifications across all parts of society and your post shared one that I never really thought so in depth about with regards to blockchain. Thanks for sharing, well done!

  6. talkingtroy · ·

    If I’m understanding your point of view correctly I think we share the same distrust of the system but I like the idea of how blockchain could be used. I still can’t understand how the system can’t be corrupted or hacked but I think you raise a lot of good points about how it could ideally be used. For now I would just settle for higher rates of engagement/ higher voter turnout.

%d bloggers like this: