In Policy Horizons Canada’s new Economic Futures: The Next Digital Economy white paper, Blockchain is identified as one of 9 key technologies that will cause disruption to the economy, labour force, and ways in which individuals interact with businesses. Blockchain is lucrative. It’s flashy. Even Facebook has one now! Whether or not you think it’s merely a secondary stockmarket, or a way in which criminals can more easily move money around, there are potential benefits to the type of trust it enables. However, there are still serious ethical flaws in various iterations of this technology which must be addressed before it is integrated in the ways in which the government’s report suggests.
Today, I want to take a look at a few of those concerns that go beyond “it enables crime”, because in the spirit of the report, I want to assume those issues will be addressed via the integration of blockchains into existing regulatory schemes, as some blockchain’s status as a legitimate currency and way of dealing is implicit in the report.
The first of the ethical concerns I want to address today is the Climate Impact of Blockchains.
Currently, the most well-known and popular type of cryptocurrency is Bitcoin, famous for its price fluctuations and for introducing blockchain to the wider world beyond tech. In December 2017, one bitcoin was worth almost $20,000. Since then, its price has fallen, and yet, the myth and hope of another surge remains. One way to get in on bitcoin for “free” is to mine it. Miners use hugely powerful computers to do complex math problems, thus ensuring the network is secure and accurate, and are rewarded for their computing time and energy with issuances of Bitcoin. However, that energy needs to come from somewhere, and currently the amount of energy used by Bitcoin miners is more than the entire country of Switzerland uses in a year. As we know, it is imperative that all countries minimize their carbon output to minimize the effects of climate change, and yet, somehow blockchain has created an entire country’s worth of energy output, and all blockchains that rely on this type of computing “proof of work” to ensure their network is trustworthy have similar energy problems, which in the climate (haha), is simply unethical. Luckily, other types of blockchains are emerging.
The second of the ethical issues I want to address is actually generally thought to be a feature of blockchains but as one famous example will show you, can also be serious flaw, and that is the Transparency and Immutability of blockchains.
Transparency and immutability are both features of blockchains which make it an excellent trustworthy intermediary for all types of transactions, and which may make it a valuable tool and potential replacement in the future for things like banks, insurance providers, and lawyers. However, in January of this year, a user of Bitcoin Satoshi Vision blockchain uploaded child pornography to the blockchain ledge via use of a third-party site. Once uploaded, the only way to remove the pornography entirely is to “roll-back” the blockchain or hide a portion of the blockchain, something counterintuitive to the principles which make it trustworthy. While Coindesk notes that these types of situations caused by bad actors do not mean that all blockchain users end up distributing child pornography in a legally culpable sense, that these types of images are difficult to find in the blockchain once there, that users may be de-anonymized to eventually track them down and punish them for their bad actions which the blockchain makes apparent, this does not mitigate the harm that those who have had those images distributed and preserved may experience. Whether it is child pornography, revenge porn, or some other type of data, the EU and other jursidiction’s privacy rights, and “rights to be forgotten” is put into jeapordy by the type of data storage that makes blockchain useful. If blockchain is going to be used going forward there must be safeguards put in place to either prevent the uploading of such materials in the first place, or that allow the victims restitution and ownership over their own material after the fact in a way that reaffirms their dignity and autonomy.
Finally, my last concern as to the ethical nature of future blockchains is their Accessibility.
Currently, currency is something which already exacerbates inequality, whether that is because of the existence of cash deserts, or because of the rampant inflation of some currencies. While cryptocurrencies housed by blockchains were thought to be a potential balm to the latter, Venezuala’s “Petro” cryptocurrency has failed, and the accesibility of crypto is still lacking. Like other types of currency exchangers, most crypto selling sites charge either a flat or percentage based fee to buy-in. There is a high learning curve to understanding how to sell once crypto is acquired, sites like this one give vague tips, but until the system becomes more user friendly to those with low computer literacy (such as the elderly, some LMICs), a shift to blockchain based policy will leave many vulnerable groups out, and may price out lower income persons the same way that banks currently are. Finally, blockchains also need to think about accessibility in the traditional sense i.e. the ease with which their ledgers and services can be parsed and accessed by those who require screen reading softwares. If we are truly going to build something better we cannot be content with replicating the faults and injustices of past systems.
These are just a few challenges the new digital economy poses, that interact with other challenges such as the future of work and social supports, and the ethical principles that need to be followed by those developing these valuable and disruptive technologies. These ethical issues must be tackled alongside development, and not simply as an afterthought.