Longreads

Blockchain Just Isn’t As Radical As You Want It To Be

Block chain concept. 3D illustration

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Rachel O’Dwyer | An essay originally anthologized in Ours To Hack and To Own: The Rise of Platform Cooperativism, A New Vision for the Future of Work and a Fairer Internet | OR Books | August 2017| 6 minutes (1,600 words)

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The current rhetoric around the blockchain hints at problems with the techno-utopian ideologies that surround digital activism.

A blockchain is essentially a distributed database. The technology first appeared in 2009 as the basis of the Bitcoin digital currency system, but it has potential for doing much, much more—including aiding in the development of platform cooperatives.

Traditionally, institutions use centralized databases. For example, when you transfer money using a bank account your bank updates its ledger to credit and debit accounts accordingly. In this example, there is one central database and the bank is a trusted intermediary who manages it. With a blockchain, this record is shared among all participants in the network. To send bitcoin, for example, an owner publicly broadcasts a transaction to all participants in the network. Participants collectively verify that the transaction indeed took place and update the database accordingly. This record is public, shared by all, and it cannot be amended.

This distributed database can be used for applications other than monetary transactions. With the rise of what some are calling “blockchain 2.0,” the accounting technology underpinning Bitcoin is now taking on non-monetary applications as diverse as electronic voting, file tracking, property title management, and the organization of worker cooperatives. Very quickly, it seems, distributed ledger technologies have made their way into any project broadly related to social or political transformation for the left—“put a blockchain on it!”— until its mention, sooner or later, looks like the basis for a dangerous drinking game. On the other side of things, poking fun at blockchain evangelism is now a nerdy pastime, more enjoyable even than ridiculing handlebar moustaches and fixie bicycles.

So let me show my hand. I’m interested in the blockchain (or blockchain-based technologies) as one tool that, in a very pragmatic way, could assist with cooperative activities—helping us to share resources, to arbitrate, adjudicate, disambiguate, and make collective decisions. Some fledgling examples are La’Zooz, an alternative ridesharing app; Swarm, a fundraising app; and proposals for the use of distributed ledgers to manage land ownership or critical infrastructures like water and energy. Many of these activities are difficult outside of local communities or in the absence of some trusted intermediary. However, I also think that much of the current rhetoric around the blockchain hints at problems with the techno-utopian ideologies that surround digital activism, and points to the assumptions these projects fall into time and again. It’s worth addressing these here.

ASSUMPTION #1: WE CAN REPLACE MESSY AND TIME-CONSUMING SOCIAL PROCESSES WITH ELEGANT TECHNICAL SOLUTIONS

Fostering and scaling cooperation is really difficult. This is why we have institutions, norms, laws, and markets. We might not like them, but these mechanisms allow us to cooperate with others even when we don’t know and trust them. They help us to make decisions and to divvy up tasks and to reach consensus. When we take these things away—when we break them down—it can be very difficult to cooperate. Indeed, this is one of the big problems with alternative forms of organization outside of the state and the market—those that are not structured by typical modes of governance such as rules, norms, or pricing. These kinds of structureless collaboration generally only work at very local kin-communal scales where everybody already knows and trusts everyone else. In Ireland, for example, there were several long-term bank strikes in the 1970s. The economy didn’t grind to a halt. Instead, local publicans stepped in and extended credit to their customers; the debtors were well-known to the publicans, who were in a good position to make an assessment on their credit worthiness. Community trust replaced a trustless monetary system. This kind of local arrangement wouldn’t work in a larger or more atomized community. It probably wouldn’t work in today’s Ireland because community ties are weaker.


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Bitcoin caused excitement when it proposed a technical solution to a problem that previously required a trusted intermediary—money, or, more specifically, the problem of guaranteeing and controlling money supply and monitoring the repartition of funds on a global scale. It did this by developing a distributed database that is cryptographically verified by an entire network of peers and by linking the production of new money with the individual incentive to maintain this public repository. More recently this cryptographic database has also been used to manage laws, contracts, and property. While some of the more evolved applications involve verifying precious stones and supporting interbank loans, the proposal is that this database could also be used to support alternative worker platforms, allowing systems where people can organize, share, or sell their labor without the need of a central entity controlling activities and trimming a generous margin off the top.

The blockchain has more in common with the neoliberal governmentality that produces platform capitalists like Amazon and Uber and state-market coalitions than any radical alternative.

Here the blockchain replaces a trusted third party such as the state or a platform with cryptographic proof. This is why hardcore libertarians and anarcho-communists both favor it. But let’s be clear here—it doesn’t replace all of the functions of an institution, just the function that allows us to trust in our interactions with others because we trust in certain judicial and bureaucratic processes. It doesn’t stand in for all the slow and messy bureaucracy and debate and human processes that go into building cooperation, and it never will.

The blockchain is what we call a “trustless” architecture. It stands in for trust in the absence of more traditional mechanisms like social networks and co-location. It allows cooperation without trust, in other words—something that is quite different from fostering or building trust. As the founding Bitcoin document details, proof-of-work is not a new form of trust, but the abdication of trust altogether as social confidence and judgment in favor of an algorithmic regulation. With a blockchain, it maybe doesn’t matter so much whether I believe in or trust my fellow peers just so long as I trust in the technical efficiency of the protocol. The claim being made is not that we can engineer greater levels of cooperation or trust in friends, institutions, or governments, but that we might dispense with social institutions altogether in favor of an elegant technical solution.

This assumption is naïve, it’s true, but it also betrays a worrying politics—or rather a drive to replace politics (as debate and dispute and things that produce connection and difference) with economics. This is not just a problem with blockchain evangelism—it’s a core problem with the ideology of digital activism generally. The blockchain has more in common with the neoliberal governmentality that produces platform capitalists like Amazon and Uber and state-market coalitions than any radical alternative. Seen in this light, the call for blockchains forms part of a line of informational and administrative technologies such as punch cards, electronic ledgers, and automated record keeping systems that work to administrate populations and to make politics disappear.

ASSUMPTION #2: THE TECHNICAL CAN INSTANTIATE NEW SOCIAL OR POLITICAL PROCESSES

Like a lot of peer-to-peer networks, blockchain applications conflate a technical architecture with a social or political mode of organization. We can see this kind of ideology at work when the CEO of Bitcoin Indonesia argues, “In its purest form, blockchain is democracy.” From this perspective, what makes Uber Uber and La’Zooz La’Zooz comes down to technical differences at the level of topology and protocol. If only we can design the right technical system, in other words, the right kind of society is not too far behind.

The last decade has shown us that there is no linear-causal relationship between decentralization in technical systems and egalitarian or equitable practices socially, politically, or economically. This is not only because it is technologically determinist to assume so, or because networks involve layers that exhibit contradictory affordances, but also because there’s zero evidence that features such as decentralization or structurelessness continue to pose any kind of threat to capitalism. In fact, horizontality and decentralization—the very characteristics that peer production prizes so highly—have emerged as an ideal solution to many of the impasses of liberal economics.

There’s zero evidence that features such as decentralization or structurelessness pose any kind of threat to capitalism.

Today, Silicon Valley appropriates so many of the ideas of the left—anarchism, mobility, and cooperation—even limited forms of welfare. This can create the sense that technical fixes like the blockchain are part of some broader shift to a post-capitalist society, when this shift has not taken place. Indeed, the blockchain applications that are really gaining traction are those developed by large banks in collaboration with tech startups—applications to build private blockchains for greater asset management or automatic credit clearing between banks, or to allow cultural industries to combat piracy in a distributed network and manage the sale and ownership of digital goods more efficiently.

While technical tools such as the blockchain might form part of a broader artillery for platform cooperativism, we also need to have a little perspective. We need to find ways to embrace not only technical solutions, but also people who have experience in community organizing and methods that foster trust, negotiate hierarchies, and embrace difference. Because there is no magic app for platform cooperativism. And there never will be.

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Copyright © 2017 by Rachel O’Dwyer. All rights reserved.

Editor: Dana Snitzky

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