As the technology empowering Bitcoin and other cryptocurrencies, blockchains have been in the news a lot lately. Bitcoin, of course, has both roiled markets and is making world governments nervous about the possible creation of an alternative currency while simultaneously thrilling investors in crypto markets. Blockchain, however, is about so much more than just enabling digital currencies. It can be applied to everything from dating to contract law. And blockchain might even upending politics.
The core innovation of bitcoin, supported by the blockchain, is that it solves the double spend problem associated with digital technology. When you get paid, you need to trust that the asset you are obtaining in return for your product or service will have value in the future. If the other person in the transaction can easily make a copy of the asset, then yours will not be unique. As such, its value will be less. By creating an immutable ledger, secured by a decentralized network, the blockchain insures that we all know who owns what, at what time. This is what is called "consensus" and it allows for exchange to happen between parties with much less friction.
New technologies have long impacted politics. Franklin Roosevelt was a genius at using radio, which he used to speak to the voters of New York when he was governor even before using it for the fireside chats that helped reassure America during the Great Depression and World War II. John F. Kennedy used television creatively and effectively in his 1960 campaign for president. After the election, Kennedy noted that, "We wouldn't have had a prayer without that gadget."
In 2008 and 2012, Barack Obama used Facebook to reach his voters in getting elected and then reelected president; Donald Trump almost certainly would never have become president without his use of Twitter to go directly to the people and get over the heads of a media that clearly had issues with him.
With that in mind, blockchains present a number of interesting opportunities for conservatives, if they see the wisdom of taking advantage of them.
As Yale's Dov Greenbaum has noted, "Blockchain overcomes the problem of lack of trust, thereby eliminating the need for middlemen." The capability to circumvent middlemen could help conservatives get around liberal-dominated sector.
For instance, a new blockchain-based media startup, Civil, aims to reinvigorate open journalism. Civil utilizes the key capabilities of blockchain technology to improve transparency and use software-based, rather than human-centric, governance mechanisms to ensure adherence to journalistic integrity standards while helping readers gain more context on a reporter's perspective.
In Civil's model, anyone can examine the financial contributors who are backing a given journalist (here it's the reporter, not the publisher, who receives the payment directly) and can assess their veracity and effectiveness based on the accumulated crypto-tokens from past articles. These tokens can represent actual payment or reputation points certifying that a verified individual actually supports them. The Civil platform offers fact-checking as a service and creates a collaborative environment to improve the quality of the reporting, all backed by the blockchain. Civil has already raised $5 million and created a $1million to fund the first set of decentralized journalists.
You may not like or agree with an individual reporter's view, but in the Civil world of decentralized journalism, you will have full transparency into who hires them, who supports them, and what their biases have been as you read their work. It might sound crazy, but it's a glimpse into the future of trusted, decentralized journalism outside the control of either a handful of editorial boards or Big Tech algorithms. Liking an article costs you nothing. Paying for an article means you are literally putting your money where your mouse is. That can help build confidence and trust.
Unions are another classic middleman, charged with representing the interests of workers to management via the trust brokering efforts of union leadership. As we've seen in the last two presidential elections, however, union leadership overwhelmingly backed the Democratic candidates while a majority of rank and file union members voted for Romney and Trump. (Obama and Clinton won the more nebulously-defined "union households.") This indicates, as those in blockchain world might say, a severe misalignment of incentives and interests.
In the future, we may see unions that are organized and operated based on blockchain. Instead of the current model, these unions will be groupings of volition and not coercion, respecting the rights of their members without fear of retribution. With blockchain technology, every employee can be given a non-revocable, secure, and anonymous right to vote on issues relating to the workforce. Then, as issues are presented, each member will cast a digital vote that would be recorded securely and verifiably, but without revealing the name of the voter, using, for example, a technology such as zk-SNARKs, which is being used by JP Morgan Chase and the crypto-currency Zcash. The same collective action or decision-making that a traditional union seeks to facilitate can be done faster, cheaper, and with more guarantees as to the privacy of the individual, to better reflect the will of membership.
There is an oft-cited axiom called, "Pournelle's Law" which posits that in any bureaucratic organization, there will be two kinds of people: those who work to further the goals of the organization, and those who work for the organization itself. An example in education would be teachers, who work and sacrifice to teach children, versus the teacher's union representatives, who work to protect any teacher, including the incompetent ones. According to Pournelle's Law, the second type of person will always gain control of the organization, and will always write the rules under which the organization functions.
In a blockchain-based union, the good teachers in a school system, for example, could vote to kick out the ineffective teachers while simultaneously protecting the rights of the high performers and the group as a whole. Do not be surprised if we see an Initial Coin Offering for a decentralized union organizing platform. In this model, membership would be represented by crypto-tokens and, as the union actually delivers meaningful benefits to its constituents, the value of those tokens increase. The increase in the value of the token further incentivizes new members and provides tangible evidence of the value associated with collective organization and action.
The key thing here is that the will of the people—in this case, the workforce—is better represented. True market dynamics would win out if individuals could vote without fear of intimidation from the middlemen who are union leadership.
A third area of liberal dominance that could be disrupted by blockchain technology is higher education. The premise of college is already under assault as costs have trended beyond the point of affordability, and even sustainability. At the same time, too many college campuses have turned away from the job of educating so as to focus on ideological indoctrination. Meanwhile, almost half of employers complain that they can't find qualified candidates.
Blockchains represent an opportunity for individuals to clearly demonstrate their knowledge, credentials, and mastery of subject matter by providing them with immutable evidence of course completion. Think of it as a transcript that you have with you at all times, but everyone knows you cannot forge.
It is already happening. Take the University of Nicosia in Cyprus, for example. Given their recent history, few countries understand the power of blockchain and Bitcoin as well as Cyprus. It is probably no surprise then that the University of Nicosia offers the first digital currency MOOC (massive open online course), the first MSc in Digital Currency, which takes payments in digital currency, and writes certificates of academic achievement to the blockchain.
Going even farther, one blockchain-based start-up, BitDegree, aims to align incentives between students, educators, and employers with the creation of a token-based network. In their model, the best teachers are paid for being excellent by students, students are rewarded for completing their work, and companies pay to sponsor courses that are critical for their future needs. The results are stored immutably in the blockchain.
Other innovative programs like Exosphere and more direct skills-oriented programs like Coursera or CodeAcademy will likely follow suit in the move towards blockchain-based certification. Prospective employers will not only be able to know that the courses were completed, but a student could give a potential employee the option to see which classes were attended, which assignments were turned in, and possibly even how much the student participated in class.
The digital certificates, represented by cryptographically secured tokens residing on a blockchain and owned and controlled by the students, would serve as proof-of-work on the part of the student. It could demonstrate a level of competence that is sorely lacking in a world where the only thing a Harvard degree proves is that you got into Harvard."
One of the roles of a traditional institution of higher learning is to serve as a middleman. Colleges essentially offer a credentialing service of their graduates to the end consumer of their product: namely companies that hire the school's graduates. To be sure, the brands of many universities and colleges are strong, but they are vulnerable because of their high price points and low value delivery. Blockchains put the target on the backs of middlemen. Higher education is no different.
We are early in the process of understanding how blockchains or, more generally, distributed ledger technology will evolve. It is also impossible to predict how any of the start-ups or innovations in the space will fare. What we do know is that the technological impact of blockchains as a disintermediator of traditional gatekeepers and middlemen is a genie that is in the process of being unleashed.
Conservatives should recognize this sea change and explore how blockchain technology can drive greater individual empowerment, more accountability, lower costs, and better outcomes across a wide spectrum of policy issues.
Tevi Troy is a presidential historian and former White House aide, and the author of What Jefferson Read, Ike Watched, and Obama Tweeted: 200 Years of Popular Culture from the White House. Jeremy Epstein is the CEO of Never Stop Marketing, a blockchain marketing consulting firm and the author of the CMO Primer for the Age of Blockchain: How This 'Trust Machine' Impacts Branding, Customer Experience, Advertising & More. His clients include OpenBazaar, Zcash, and Storj.