Working On The Blockchain Gang, Part 2

by Misha Lepetic

"Technology is a way of organizing the universe
so that people don't have to experience it."
~ Max Frisch

Blockchain01Last time I set up a discussion around the premise of BitCoin, or more specifically, one of its underlying technologies, known as the blockchain. In the intervening time, I have been half-heartedly attending numerous events here in New York focusing on blockchain, especially in relation to non-financial implementations. I say half-heartedly, because the purported promise of blockchain has been constantly undermined by the quality of discussion at these events. I'll grant that crypto-currencies in general and the concept of blockchain specifically are initially challenging to grasp, but at the same time I left most of these events wondering if the panelists actually knew what they were talking about, or if what they knew was earth-shaking and recondite to the point that it couldn't responsibly be shared with the public.

Of course, this doesn't prevent people from making all sorts of radical claims befitting a technology that is in its infancy and is speculative at best. Consider the case of Democracy Earth, a startup that I heard present at one of these events. Democracy Earth is seeking to ‘disintermediate politics' through the deployment of blockchain. The closing line of the abstract of Democracy Earth's cri de couer states:

We seek nothing less than true democratic governance for the Internet age, one of the foundational building blocks of an achievable global peace and prosperity arising from an arc of technological innovations that will change what it means to be human on Earth.

Go big or go home, as they say. But what do we really talk about when we talk about blockchain? In this piece I won't address the specifics of the technology (there are any number of half-decent explainers out there for that), but rather the complex series of maneuvers in which we implicitly engage when discussing nascent technologies.


A key aspect that makes phenomena such as blockchain so slippery is the sheer difficulty of describing how it works, or rather how it's supposed to work. Actually, there are two discursive moves here that occur simultaneously. The first occurs at the point of the elucidation of the concept itself: the cost of explaining the mechanism or technology in question. But the second move is a concealment of the larger, socio-political context in which that mechanism or technology resides. This concealment simply follows as a result of the attention required to understand the concept in question.

As an example, consider another innovation that has been much in the news lately: universal basic income. A guaranteed, non-means-tested income is not that tricky to convey; you can just about summarize it by saying, ‘everyone gets a check'. The real cost to our attention springs from the issues that immediately surround it: Is UBI effective? If so, how will we pay for it? To be sure, these are important considerations, and will profoundly characterize any attempt at designing and implementing any UBI scheme. It's not surprising, then, that the discussion tends to end at these questions: it's difficult enough to get consensus on UBI, even when the discussion is bounded within its own terms.

More consequential is the concealment of the larger picture. It's not uncommon for a discussion around UBI to follow these lines: "Let's assume that the government spends X dollars on providing entitlements to its citizens. If we just cut checks adding up to X to everyone, we will give people the money to spend as they wish. Those that need the services will spend their money in such a fashion." However, part of what makes UBI possible is the dismantling of the programs that provide those services. So the true consequence of UBI may be that needy and vulnerable populations no longer have access to services once explicitly designed to serve them, or that the cost of those services is no longer kept in check by government subsidy or regulation. The unconditional, distributed nature of UBI also strongly implies that those who require more care will see their purchasing power diluted: since everyone is getting the same check, if I have the additional burden of needing insulin for my diabetes, I am immediately at a disadvantage compared to someone who doesn't.

Consider another example of what narrowly constructed discussions around UBI do not address, via Brishen Rogers' recent piece in the Boston Review:

How would a basic income impact workers and firms? It would surely protect workers against the economic harms of unemployment and underemployment by giving them unconditional resources, and it would enable them to bargain for higher wages and to refuse terrible jobs. But a basic income would do little to reduce corporate power, which is a function not just of wealth but of the ability of firms to structure work relationships however they wish when countervailing institutions—such as a powerful regulatory state—are absent or ineffective.

In other words, the gains to an individual's freedom are balanced against the sacrifice of much larger social, economic and political institutions that serve as an interface, interlocutor, arbiter and even bulwark. It reminds me of a comment I heard years ago from the legal scholar Gerald Frug: "There are two kinds of freedom: the freedom to decide what you want, as an individual; and the freedom we have, to decide what kind of society we want to create together."

Put another way, the distillation of the discussion of UBI to the mechanics of financial distribution misses the fact that money really only facilitates vast networks of social relationships. Failure to see that creates instead an implicit calculus that suggests a little bit of ‘free' money is an adequate substitute for a whole swath of social relationships and processes, but shouldn't you be grateful for free money? Unless we can have a discussion that begins by asking in what way do we want UBI to change society, what we have here is little more than a cheap bribe, although perhaps an exceedingly effective one.


The same could be said for blockchain. But before treating blockchain another idea need to be tabled. I'd like to propose a new addition to the venerable taxonomy of "there are two kinds of people in the world": those who are told what to do by software, and those who tell software what to do. This sounds crude, but draws from arguments first made, so far as I can tell, by Peter Reinhardt in 2015, when he noted that:

The software layer between the company and their armies of contractors eliminates a huge amount of middle management, and creates a worrisome disconnect between jobs that will be automated, and jobs of increasing leverage and value. This software layer generally has three parts: the user interface (UI) for the end customer, a programming interface (API) that actually dispatches a human worker, and a second interface for the worker to execute the task efficiently. The API component is the interesting and slightly disturbing part… What's bizarre here is that these lines of code directly control real humans.

Uber, of course, is the example par excellence of this sort of disintermediation, and another illustration of Rogers' point of ‘the ability of firms to structure work relationships however they wish'. But Reinhardt wants us to understand that once workers fall ‘below the API' there is little opportunity for them to advance, as the API replaces middle management. Furthermore, any task that exists below the API is itself the target of eventual automation. Uber drivers may or may not value their arrangement with the company, but it's no secret that Uber is furiously developing self-driving cars that aim to eventually replace all their human drivers.


As with any technology, the real question to be asked is who benefits. Time and again, the history of technology is more correctly a history of advantages that accrue to those populations already in a position to leverage it. But an equally important trend is one that is diametrically opposed to, and yet co-exists with, this well-understood ‘early adopter' rhetoric. The final, pervasive characterization of a technology is its deployment to better control marginal populations; these are the true advantages of commodification and scale. Those with paltry bank accounts may find themselves with poor credit and little recourse to understanding why, let alone how to fix it. Others, of the wrong race, have been ‘redlined' from owning homes in neighborhoods deemed off-limits by the concerted efforts of both corporations and the government, and administered via the maps that gave the practice its name. And as I pointed out in a February 2016 column here at 3QD, the rapid development of robotic and artificial intelligence technologies is seeing increasing application aimed at marginal populations that require ‘management': the elderly, criminals both convicted or merely accused, and even children.

In fact, once you take the time to think about it, technology is really a social system, and what we view as the ‘technology' itself is just a proxy. Too often we are distracted by the physical artefact (eg, "How [insert something you can touch] changed society forever") and wind up giving it too much emphasis. As futurist Bruce Sterling puts it, objects are ‘frozen social relationships'. He was speaking from the point of view of design, but much the same could be said for any technology, except that technologies tend to be dynamic, and therefore embodying and shaping processes. And now that technology is abstract (in the form of "code"), or merely pretending to be abstract (in the form of "the cloud," which is just a lot of computers sitting in a spot where you can't see them), it's even more difficult to think of the phenomenon correctly, since we are grasping at how to ‘see' the technology, when what we should be seeing are the relationships it variously creates, cultivates, conceals, devalues and destroys.

Most importantly, technology is a heuristic that makes people legible to the authors and owners of that technology, and further down the line, to the subscribers, who are paying for the privilege of access. It is about being seen, of being subjected to a gaze (think of watching your Uber driver's car icon gradually make its way to you on the map presented on your smart phone). Of course, this legibility is only as good as the attributes that the system chooses to quantify, and therein lies the rub.


How does blockchain propagate the same set of risks? At first glance, it seems like distributed ledger technology struggles against these questions, and is predicated on disintermediation from the very institutions that seek this sort of control over any given group. After all, the founders of Democracy Earth want to rid us of the meddlesome, corrupt and conflicted ‘intermediaries' that infest our politics. (Wait, aren't these other people? Shush, never mind).

Keep in mind that blockchain, like most of the technologies generated by Silicon Valley, has libertarian roots. Taking the Enlightenment's sovereignty of the individual to its final reductio, we only define freedom as being beholden to no one. This is only one half of Frug's formulation above, whereas what's missing is the second half: we are just as equally beholden to everyone. What does this half-world look like? In The Atlantic, Ian Bogost has written one of the only mainstream media pieces of which I am aware that casts a skeptical eye on distributed ledger technologies, and he lays out the landscape succintly:

The [anarcho-capitalist] worldview only supports sovereign individuals engaging in free-market exchange. Neither states nor corporations are acceptable intermediaries. That leaves a sparsely set table. At it: individuals, the property they own, the contracts into which they enter to exchange that property, and a market to facilitate that exchange. All that's missing is a means to process exchanges in that market.

Even disregarding the way in which this worldview waves off society (while also noting how far this moves beyond even Margaret Thatcher's dictum that "there's no such thing as society. There are individual men and women and there are families"), the anarcho-capitalists also presuppose a minimum viable agency that each individual has. People voluntarily enter into transactions – since that's all there seems to be in this vision – and that's pretty much it. The ‘means to process exchanges' is a nice way of re-stating the stance that no one is to be trusted, and that's precisely what distributed ledger technologies purport to solve.

Except what if you're not feeling particularly flush with agency? What if you are a member of any number of vulnerable or marginalized populations? You may not have much choice about whether you'd like to enter into a transaction or not.


As of August 2017, there are at least 15 blockchain projects being piloted by various aspects of the United Nations. While I laud the UN for being unusually proactive in adopting potentially innovative approaches, I'll consider one project in particular: the World Food Programme's foray into blockchain for distribution of food aid to Syrian refugees in Jordan. The pilot does everything you'd want it to do: it tracks aid as it makes its way through the supply chain, reducing waste and fraud and dramatically cutting down on payments to intermediaries. This is all very well and good.

However, things get a bit anxiety-inducing when one considers that, in order to be eligible to receive aid, refugees must submit to an iris scan, the results of which are used to verify identity. More importantly, as each refugee's scan is performed for each occasion, this is data that is added to that particular pilot's blockchain. Additionally, this is a blockchain that has been ‘forked' off of the main platform, known as Ethereum, and is entirely under the UN's control. And the future is designed to scale. Houman Haddad, the executive leading the project for WFP:

…envisions a future where refugees control their own cryptographic keys to access their funds (or "entitlements," in aid worker jargon). This element may be crucial to making aid more easily and widely available because the keys would unlock data that's currently stuck in different aid agencies, including medical records from the World Health Organisation, educational certificates at UNICEF, and nutritional data from WFP.

It's perfectly understandable that the UN would want to go down this path. But at the same time, the refugees in question are now recorded permanently as having fled their country. While there are ample assurances that cryptography will preserve their anonymity, I can assure you that nothing is unbreakable. In fact, it doesn't even need to be unbreakable, merely deductible: blockchain forensics is already a reality. Much as mobile phone towers are used to triangulate locations of specific phones, and browsing habits find users whose identities have been pre-emptively anonymized, these rolls of refugees' names will eventually be at risk of being outed. Once this happens, they may face discrimination at home, or perhaps may never be allowed to return. Make no mistake: being a refugee is a mark. If the outing is done by criminal gangs, they may be victimized or subjected to trafficking, or at least exploited for their fragile identities. And it will all be perfectly recorded.

As Bogost writes, "instead of defanging governments and big corporations, the distributed ledger offers those domains enormous incentive to consolidate their power and influence." Why should the UN be any different? Judging from Haddad's ambitions, it isn't. This is why, instead of attempting to understand how blockchain works, we'd be better off asking ourselves what kind of world we want to live in, before we find ourselves irrevocably quantized in digital amber, below the API.