Blockchain for the people? A progressive perspective on technology – People’s World
There are many myths and misconceptions about blockchain, the technology behind cryptocurrencies such as Bitcoin. This in large part because many (not all) of the people who work in this space come from either a global capitalist mindset and / or some flavor of the libertarian / anarchist mindset. They seek to politicize something that is after all just a technology, a tool, which can be used for different purposes. They want to grab this tool for themselves.
Without going into too much technical detail, the blockchain at its core is just the most recent iteration of an ancient methodology pioneered by bankers in the 1400s in Italy, who found it to be safer and more resilient. accounting errors to keep at least two sets of ledger books, copies of each other, to avoid typos and intentional modification of data by bad actors. So blockchain is basically just that, with the exception of not only two copies of ledger books, but potentially millions of copies, distributed to computers over the internet around the world.
And that’s really it: blockchain is just the last way to avoid fraud and accidental data entry errors by keeping duplicate records. The political aspects of blockchain technology are essentially ‘baggage’ brought in by people with their own agendas and have nothing to do with the technology itself, which, again, is essentially just a computerized form. retention of duplicate records to improve security. in record keeping.
There are many legitimate uses for this technology. Businesses can use it to track inventory and supply chains to reduce costs and avoid errors and waste. Blockchain can also be used to create very ambitious multiplayer online games because, as even the casual gamer knows, it is often easy for a bad actor to exploit a vulnerability in a game to earn prizes, points, etc. . at the expense of other players (a situation that was parodied in the South Park episode, “Make Love Not Warcraft”). Blockchain makes cheating in a multiplayer online role-playing game difficult or impossible, mainly because it can make so many copies of the “inventory”, so to speak, of each player’s virtual assets, so that no player cannot find an exploit who would modify this virtual “inventory” of game assets to their advantage.
Even states can also use blockchain to their advantage. Russia, for example, is considering releasing a digital version of the ruble based on blockchain technology, with the aim of making fraud and counterfeiting virtually impossible.
So there are many perfectly legitimate uses of this technology that have nothing to do with individuals or companies issuing their own totally unregulated “currencies”, a system reminiscent of the era of the “thieves baron” of the 1800s. where there was no regulation of companies issuing shares or “corporate currencies” and thus fraud was rampant, mainly to the detriment of workers, even worse in some ways than it is today .
The current trend for social media ‘influencers’, such as Kim Kardashian, issuing their own ‘pump and dump’ cryptocurrencies: they ‘talk’ about the price of an asset, to sell it at the top, leaving everyone else, namely, their followers on social networks, holding the sack – is unfortunately, I think, the end, the logical result of the Reagan-Thatcher era of deregulation that began in the 1980s. When the government abdicates its responsibility for protecting people from the excesses of predatory capitalists, it is no surprise that today, everywhere you look at social media, there is yet another fraudulent digital “currency” that is harassed by a “personality” From social media or whatever. Of course, not all social media influencers are unethical, but as is often the case, sometimes it’s the unethical people who seem to get the most attention.
Widely used public and open source blockchains, such as Bitcoin or Ethereum, can be seen primarily as public goods, subject to sensitive regulation like any other good to protect the public from fraud. Ethereum can be used as a platform to build other applications (like the example games mentioned above), and Bitcoin can be seen as a sort of ‘store of value’ type of commodity not too different from precious metals. . The USDC is a “stable coin” based on Ethereum technology whose value is pegged to the US dollar. I can see a (properly regulated) version of USDC becoming a kind of “digital dollar” similar to the above-mentioned “digital ruble” that Russia is planning.
These things are neither good nor bad in themselves; it is a question of how they are used. Properly regulated, blockchain can be used for the benefit of society, but misused, it will only serve the benefit of crooks and profiteers who can monopolize control.
A key element of the concept of socialism is the notion of centralization of the means of production. Technology in general including computers, internet and blockchain are all types of means of production, that is, they are all tools that help create economic production. Blockchain is not such a unique situation; it is just another tool that can be used for the benefit of all, or for the benefit of a few at the expense of all others.
There are also environmental concerns which are a bit technical to address, but basically there are better and worse ways to secure blockchain networks. The Wrong Way is a family of algorithms called ‘proof of work’, which is very energy intensive and therefore can contribute to ecological destruction and climate change. A family of less power-hungry algorithms that can be alternatively used to secure blockchain networks is called ‘proof of stake’, which is preferable from an ecological point of view, but also poses issues of fairness in terms of “participation” to actors. in the network, which is a bit beyond the scope of this discussion. There are also other alternative methods being researched, so a future challenge for blockchain technology is to find environmentally responsible and economically fair operating procedures and algorithms that can be used to secure blockchain networks.
Used correctly, blockchain can be a useful mechanism to eliminate fraud in general, whether it is financial fraud such as counterfeiting, inventory fraud in businesses (embezzlement, “cooking the books”, etc. .), and even online gaming fraud, and it can be used to create many applications that can improve human life. Used inappropriately, blockchain can be an environmental disaster and trigger financial malfeasance that harms workers to levels not seen since before President Franklin D. Roosevelt’s banking regulations were put in place to stop some of the extremes of capitalism that led to the Great Depression. .
We are currently at a critical juncture as to how things will go with this technology. Socialists and progressives should generally advocate for strict oversight and regulation of blockchain technology to ensure that it is used for all of us, not just a handful of unscrupulous financiers and of social media influencers.
Francis Erdman works as a technical support engineer for a cryptocurrency company.
As with all editorials published by People’s World, this article reflects the opinions of its author.