Sunday, November 19, 2017

Blockchain for Global Inclusion: Enablement or Precarization?

Overall we expect that the benefits will outweigh the costs of blockchain distributed ledgers. (A blockchain (distributed ledger) is an accounting ledger (an account of who owns what) running on a distributed network, operated by cryptographic protocols, without any centralized control.) However, we should design this new class of information technology being mindful of both sides of the equation and address identifiable risks to the extent possible ahead of time. Here are some possible risks and benefits when considering blockchains for global inclusion, and the enablement or precarization that might result.

Benefits of Distributed Ledgers
Distributed ledgers could be the next important leapfrog technology for enabling human potential. Blockchains might be used to deliver peer-based services that support financial inclusion, identity-credentialing, and health inclusion. 

Globally, there are
It does not make sense to build out brick-and-mortar bank branches and medical clinics to every last mile in a world of digital services. Instead, eWallet banking, identity credentials, property registries and deep learning medical diagnostic apps might be used to deliver these services.

Risks of Distributed Ledgers
On the other hand, one risk of global blockchain services is that perhaps liberty is diminished if all persons worldwide are explicitly or implicitly forced to join blockchain systems. Precarization may be heightened if everyone must join the global labor market, if that means that one is subject to a constant sense of be measured and controlled by computational algorithms over which one has no control. Individuals are marketized, financialized, and precaritized.
Is a blockchain just a worse version of a FICO credit score? A blackbox over which one has no control? 
The risk would be losing the plethora of diversity in value systems, ways of solving problems, and orchestrating our daily lives if we are all subject to monolithic blockchain systems that do not support this diversity. Another risk is that economically, with blockchains more tightly integrating the economic sector, risk may become even more concentrated that it already is. At worst, distributed ledgers operated by algorithmic smart contracts might essentially turn the global economy into one giant HFT (high-frequency trading) vehicle, where there would not be any form of uncorrelated risk.

  • Heider, Caroline, and Connelly, April. 2016. Why Land Administration Matters for Development. 
  • Pricewaterhouse Coopers. 2016. The un(der)banked is FinTech's largest opportunity. DeNovo Q2 2016 FinTech ReCap and Funding ReView.
  • UN. 2017. 
  • World Bank. 2015.

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