This is an over-simplification of the role of relationships, contract law, and risk. We believe there is a gap in the understanding of the capabilities of SC’s. With that in
Blockchain Economics
NBER Working Paper by Joseph Abadi and Markus Brunnermeier: “When is record-keeping better arranged through a blockchain than through a
A centralized record-keeper
China will now officially try to extend its Great Firewall to blockchains
Mike Orcutt at Technology Review: “China’s crackdown on blockchain technology has taken another step: the country’s internet censorship agency has just approved new regulations aimed at blockchain companies.
Hand over the data: The Cyberspace Administration of China (CAC) will require any “entities or nodes” that provide “blockchain information services” to collect users’ real names and national ID or telephone numbers, and allow government officials to access that data.
It will ban companies from using blockchain technology to “produce, duplicate, publish, or disseminate” any content that Chinese law prohibits. Last year, internet users evaded censors by recording the content of two banned articles on the Ethereum blockchain. The rules, first proposed in October, will go into effect next month.
Defeating the purpose? For more than a year, China has been cracking down on cryptocurrency trading and its surrounding industry while also singing the praises of
Blockchain’s Occam problem
Report by Matt Higginson, Marie-Claude Nadeau, and Kausik Rajgopal: “Blockchain has yet to become the game-changer some expected. A key to finding the value is to apply the technology only when it is the simplest solution available.
Blockchain over recent years has been extolled as a revolution in business technology. In the nine years since its launch, companies, regulators, and financial technologists have spent countless hours exploring its potential. The resulting innovations have started to reshape business processes, particularly in accounting and transactions.
Amid intense experimentation, industries from financial services to healthcare and the arts have identified more than 100 blockchain use cases. These range from new land registries, to KYC applications and smart contracts that enable actions from product processing to share trading. The most impressive results have seen blockchains used to store information, cut out intermediaries, and enable greater coordination between companies, for example in relation to data standards….
There is a clear sense that blockchain is a potential game-changer. However, there are also emerging doubts. A particular concern, given the amount of money and time spent, is that little of substance has been achieved. Of the many use cases, a large number are still at the idea stage, while others are in development but with no output. The bottom line is that despite billions of dollars of investment, and nearly as many headlines, evidence for a practical scalable use for blockchain is thin on the ground.
Infant technology
From an economic theory perspective, the stuttering blockchain development path is not entirely surprising. It is an infant technology that is relatively unstable, expensive, and complex. It is also unregulated and selectively distrusted. Classic lifecycle theory suggests the evolution of any industry or product can be divided into four stages: pioneering, growth, maturity, and decline (exhibit). Stage 1 is when the industry is getting started, or a particular product is brought to market. This is ahead of proven demand and often before the technology has been fully tested. Sales tend to be low and return on investment is negative. Stage 2 is when demand begins to accelerate, the market expands and the industry or product “takes off.”
Across its many applications, blockchain arguably remains stuck at stage 1 in the lifecycle (with a few exceptions). The vast majority of proofs of concept (POCs) are in pioneering mode (or being wound up) and many projects have failed to get to Series C funding rounds.
One reason for the lack of progress is the emergence of competing technologies. In payments, for example, it makes sense that a shared ledger could replace the current highly intermediated system. However, blockchains are not the only game in town. Numerous fintechs are disrupting the value chain. Of nearly $12 billion invested in US fintechs last year, 60 percent was focused on payments and lending. SWIFT’s global payments innovation initiative (GPI), meanwhile, is addressing initial pain points through higher transaction speeds and increased transparency, building on bank collaboration….(More)” (See also: Blockchange)
Blockchain and Sustainable Growth
Cathy Mulligan in the UN Chronicle: “…What can blockchain give us, then?
Blockchain’s 1,000 Thought Experiments
Blockchain is still new and will evolve many times before it can be fully integrated into society. We have seen similar trajectories before in the technology industry; examples include the Internet of things, mobile telephony and even the Internet itself. Every one of those technologies went through various iterations before it was fully integrated and used within society. Many technical, social and political obstacles had to be slowly but surely overcome.
It is often useful, therefore, to approach emerging technologies with some depth of thought—not by expecting them to act immediately as a fully functional solution but rather as a lens on the possible. Such an approach allows for a broader discussion, one in which we can challenge our preconceived notions. Blockchain has already illustrated the power of individuals connected via the Internet with sufficient computing power at their disposal. Far from merely tweeting, taking and sharing photos or videos, such people can also create an entirely new economic structure.
The power of blockchain thus lies not in the technology itself but rather in how it has reframed many discussions across various parts of our society and economy. Blockchain shows us that there are options, that we can organize society differently. It has launched 1,000 different thought experiments but the resulting solutions, which will be delivered a decade or two from now, may or may not be based on blockchain or cryptocurrencies. The discussions that started from this point, however, will have been important contributions to the progress that society makes around digital technologies and what they can mean for humankind. For these reasons, it is important that everyone, including the United Nations, engage with these technologies to understand and learn from them.
At its most basic level, blockchain speaks to a deep, human need, one of being able to trust other people, organizations and companies in a world where most of our interactions are mediated and stored digitally. It is arguable how well it captures that notion of trust, or whether any technology can ever actually replicate what a human being thinks, feels and acts like when they trust and are trusted. These concepts are deeply human, as are the power structures within which digital solutions are built. Blockchain is often discussed as removing intermediaries or creating democratic solutions to problems, but it may merely replace existing analogue power structures with digital ones, and cause decision-making within such contexts to become more brutally binary. ‘Truth’ on the blockchain does not leave room for interpretation, as today’s systems do.
Context is critical for the development of any technology, as is the political economy within which it exists. Those who have tried to use blockchain, however, have quickly realized something: it forces a new level of cooperation. It requires partnerships and deep discussions of what transparency and inclusion truly look like….
Perhaps one of the reasons that blockchain has received so much attention is because it speaks to something that many people across the world are feeling instinctively: that we can only create new solutions to some of the world’s oldest problems by working together and including everyone in the discussion. Blockchain appeals to many people as a viable solution precisely because it is about applying a counter-intuitive approach to problems; despite the often technology-deterministic manner in which it is discussed, it is important to listen to the underlying message. The call to inclusion, trust
Blockchain helps refugees gain access to financial services
Springwise: “…Blockchain has also lead to huge steps forward in this sector, enabling greater transparency for consumers in the food industry. This latest innovation could also combine both worlds in using blockchain to take back control of personal data.
Gravity Earth seeks to provide equal access and opportunity to digital IDs, a growing necessity in the modern world. Digital identities allow access to key financial services, mobile communication, and other online benefits. At the moment, Gravity Earth estimates that around 1.5 billion people across the globe do not have an official proof of identity.
The Nairobi-based startup sought to change this by allowing anyone to create a secure, self-sovereign digital ID based on their personal data. The blockchain-based process can be done wherever you are and on any mobile device. Their solution allows currently disadvantaged people to store and share personal data with whoever they want. In so doing, it also allows users to build on existing traditional IDs, but does not depend on them.
The products
See also: Field Report On the Emergent Use of Distributed Ledger Technologies for Identity Management
Seven design principles for using blockchain for social impact
Stefaan Verhulst at Apolitical: “2018 will probably be remembered as the
In 2019, business will continue to explore blockchain for sectors as disparate as finance, agriculture, logistics
In a recent report I prepared with Andrew Young, with the support of the Rockefeller Foundation, we looked at the potential risks and challenges of using blockchain for social change — or “Blockchan.ge.” A number of implementations and platforms are already demonstrating potential social impact.
The technology is now being used to address issues as varied as homelessness in New York City, the Rohingya crisis in Myanmar and government corruption around the world.
In an illustration of the breadth of current experimentation, Stanford’s Center for Social Innovation recently analysed and mapped nearly 200 organisations and projects trying to create positive social change using blockchain. Likewise, the GovLab is developing a mapping of blockchange implementations across regions and topic areas; it currently contains 60 entries.
All these examples provide impressive — and hopeful — proof of concept. Yet despite the very clear potential of blockchain, there has been little systematic analysis. For what types of social impact is it best suited? Under what conditions is it most likely to lead to real social change? What challenges does blockchain face, what risks does it pose and how should these be confronted and mitigated?
These are just some of the questions our report, which builds its analysis on 10 case studies assembled through original research, seeks to address.
While the report is focused on identity management, it contains a number of lessons and insights that are applicable more generally to the subject of blockchange.
In particular, it contains seven design principles that can guide individuals or
Innovations In The Fight Against Corruption In Latin America
Blog Post by Beth Noveck: “…The Inter-American Development Bank (IADB) has published an important, practical and prescriptive report with recommendations for every sector of society from government to individuals on innovative and effective approaches to combatting corruption. While focused on Latin America, the report’s proposals, especially those on the application of new technology in the fight against corruption, are relevant around the world….
The recommendations about the use of new technologies, including big data, blockchain and collective intelligence, are drawn from an effort undertaken last year by the Governance Lab at New York University’s Tandon School of Engineering to crowdsource such solutions and advice on how to implement them from a hundred global experts. (See the Smarter Crowdsourcing against Corruption report here.)…
Big data, when published as open data, namely in a form that can be re-used without legal or technical restriction and in a machine-readable format that computers can analyze, is another tool in the fight against corruption. With machine readable, big and open data, those outside of government can pinpoint and measure irregularities in government contracting, as Instituto Observ is doing in Brazil.
Opening up judicial data, such as information about case processing times, judges’ and prosecutors’ salaries, information about selection processes, such as CV’s, professional and academic backgrounds, and written and oral exam scores provides activists and reformers with the tools to fight judicial corruption. The Civil Association for Equality and Justice (ACIJ) (a non-profit advocacy group) in Argentina uses such open justice data in its Concursos Transparentes (Transparent Contests) to fight judicial corruption. Jusbrasil is a private open justice company also using open data to reform the courts in Brazil….(More)”
The soft spot of hard code: blockchain technology, network governance and pitfalls of technological utopianism
Moritz Hutten at Global Networks: “The emerging blockchain technology is expected to contribute to the transformation of ownership, government services
When ‘The DAO’, a highly publicized but faulty crowd‐funded venture fund was deployed on the Ethereum blockchain, the techno‐utopianism was suspended, and developers fell back on strong network ties. Now that the blockchain technology is seeing an increasing uptake, I shall also seek to unearth broader implications of the blockchain for the proliferation or blockage of global finance and beyond. Contrasting claims about the disruptive nature of the technology, in this article I show that, by redeeming the positive utopia of ontic, individualized debt, blockchains reinforce our belief in a crisis‐ridden, financialized capitalism….(More)”.
Blockchain systems are tracking food safety and origins
Nir Kshetri at The Conversation: “When a Chinese consumer buys a package labeled “Australian beef,” there’s only a 50-50 chance the meat inside is, in fact, Australian beef. It could just as easily contain rat, dog, horse or camel meat – or a mixture of them all. It’s gross and dangerous, but also costly.
Fraud in the global food industry is a multi-billion-dollar problem that has lingered for years, duping consumers and even making them ill. Food manufacturers around the world are concerned – as many as 39 percent of them are worried that their products could be easily counterfeited, and 40 percent say food fraud is hard to detect.
In researching blockchain for more than three years, I have become convinced that this technology’s potential to prevent fraud and strengthen security could fight agricultural fraud and improve food safety. Many companies agree, and are already running various tests, including tracking wine from grape to bottle and even following individual coffee beans through international trade.
Tracing food items
An early trial of a blockchain system to track food from farm to consumer was in 2016, when Walmart collected information about pork being raised in China, where consumers are rightly skeptical about sellers’ claims of what their food is and where it’s from. Employees at a pork farm scanned images of farm inspection reports and livestock health certificates, storing them in a secure online database where the records could not be deleted or modified – only added to.
As the animals moved from farm to slaughter to processing, packaging and then to stores, the drivers of the freight trucks played a key role. At each step, they would collect documents detailing the shipment, storage temperature and other inspections and safety reports, and official stamps as authorities reviewed them – just as they did normally. In Walmart’s test, however, the drivers would photograph those documents and upload them to the blockchain-based database. The company controlled the computers running the database, but government agencies’ systems could also be involved, to further ensure data integrity.
As the pork was packaged for sale, a sticker was put on each container, displaying a smartphone-readable code that would link to that meat’s record on the blockchain. Consumers could scan the code right in the store and assure themselves that they were buying exactly what they thought they were. More recent advances in the technology of the stickers themselves have made them more secure and counterfeit–resistant.
Walmart did similar tests on mangoes imported to the U.S. from Latin America. The company found that it took only 2.2 seconds for consumers to find out an individual fruit’s weight, variety, growing location, time it was harvested, date it passed through U.S. customs, when and where it was sliced, which cold-storage facility the sliced mango was held in and for how long it waited before being delivered to a store….(More)”.