Building an Empathic Blockchain

Building an Empathic Blockchain

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By Jeff Kempler

The following essay originally appeared in Sub Rosa’s bi-annual print publication La Petite Mort: Summer Solstice 2017 issue. To receive your own printed copy, please contact LPM@wearesubrosa.com. A digital version can be accessed here.

We are at the dawn of a new generation of the Internet, powered by a foundational technology (and, importantly, a mindset) that could be as influential as the advent of the Internet itself. Despite its comical name, the open, distributed ledger technology Blockchain presents a powerful opportunity to address a core imbalance in our hyperconnected, digital/mobile culture. While the Internet provides the frictionless ability at nearly unlimited scale to find and interact with any type of content and any number of people (and machines), substantial barriers, risks, and inefficiencies to establishing and exchanging identity, access, and commitments online thwart that ability in many cases. Blockchain-based systems are rapidly evolving to meet this challenge, particularly in frontier markets and cultures where traditional notions of verification already clash with modern commercial norms. In short, Blockchain may become the trust protocol that provides efficiency and reliability for all online exchanges.

For the most part, the gargantuan digital marketplace runs through one or more centralized intermediaries (e.g., ISPs, telecom, big banks, etc.) using standardized transmittal protocols that power the Internet (e.g., TCP/IP). Yet, most online transactions are in truth chaotic and prone to corruption — as recent events illustrate. Blockchain portends a potentially massive paradigm shift by enabling peer-to-peer digital interaction of any type and scale that is secure, reliable, and efficient — yet decentralized and highly resistant to monopoly or manipulation. Essentially, Blockchain is a cryptographically secure, crowd-hosted and widely distributed, autonomously administered ledger technology that continuously records transaction data among “nodes” located on different computers. Transactions are automatically ordered chronologically as a “chain” of “blocks”. Because a “block” cannot be retroactively altered, and non-conforming transactions cannot join the “chain,” transaction integrity is very high and transaction records are highly reliable.

There are 5 basic principles of Blockchain¹:

  1. Distributed Database — No single party controls. Each party on the blockchain has access to the entire database. Each party can independently verify the records of transactions without relying on an intermediary. This has a democratizing and anti-monopolistic effect.
  2. Peer-to-peer Transmission — Communications occur directly between peers; there is no central node. Each node (on an individual computer) stores and forwards information to all other nodes. This decentralization enhances the security and democracy of the system.
  3. Transparency with Pseudonymity — Every transaction and its associated value is visible to all system participants. Each participant has a unique 30+-character identifier. Users chose to remain anonymous or to share their identities. Transactions occur between blockchain addresses. This enhances trust, protects privacy, and lowers intermediation costs.
  4. Irreversible Records — Once a transaction is completed and entered into the database, accounts are updated and the associated record becomes a sequential “block” in a constantly evolving chain. Aspects of the built-in code ensure that the “block” and the surrounding database is permanent, chronological, and transparent to all network participants. This creates a highly secure “ledger” and enhances reliability.
  5. Computational Logic — The code underlying the digital ledger is programmed in accordance with unalterable, self-enforcing norms and rules that automatically trigger actions between the system nodes. This supports reliability and efficiency through real-time, unbiased application of previously accepted norms and conditions (in the form of code) for the exchanges at issue.

With this vision of an automated, stigmergic marketplace for digital interaction, excitement around Blockchain runs high. Disintermediation and automaticity in a high-trust environment suggests removal of costly inefficiencies for providers and access to otherwise precluded users lacking traditional means of identity verification.

As such, blockchain theoretically can serve as the operating system and real-time ledger and verification system for any form of digital exchange between any number of people, entities, and/or machines. It can be used to pay bills, settle contracts, share music, manage a car or home rental business, or bring reliable identification and bankability to literally billions of people and businesses who are excluded from traditional financial systems.

The best-known Blockchain system is the controversial cryptocurrency Bitcoin, but there is enthusiastic exploration of potential application across a wide range of industries and markets. From supply chain management to tracing the lineage of diamonds and fine art, to banking and healthcare data, entertainment media distribution and monetization, micro-grid energy solutions and the Internet of Things, the vision of a cost-efficient path to a real-time digital transaction system capable of unlimited scale without compromising efficiency or security is enticing to many sectors. A recent World Economic Forum report predicted that by 2025 ten percent of global GDP will be stored on blockchains or blockchain-related technology.²

Examples (among many) emerging applications of Blockchain include:

— The Gates Foundation (building credit histories to enable banking for the poor);

— ID2020 and Khushi Baby (digital identity for adults and children without existing proof)

— M-Pesa (mobile phone credits in Kenya)

— Ethereum (smart contracts);

— Stellar (the Lumens crypto-currency, data storage, and B2B currency exchange in Africa);

— Brooklyn Microgrid (IoT-enabled community-managed energy grid);

— Pokitdok (medical records);

— Spotify (acquisition of Mediachain to apply blockchain to music streaming); and

— Userfeeds Engine (combating “fake news”).

Best practices for designing for adoption and use at scale are very much in a nascent, speculative state. It is at this formative stage that an empathic, considered, and practical approach to systems and communication design is particularly opportune so that the actual needs, resources, and circumstances throughout the affected ecosystem are taken as design parameters in creating truly useful and reliable applications.

As with any frontier, motives and behaviors for pioneering will vary. The sturm und drang surrounding Bitcoin illustrates this. Generally speaking, in these early days, market and perhaps societal forces seem to be pushing investment and attention towards one or more of the following scenarios:

(a) so-called “high delta” areas³ where intermediaries, systems or infrastructure either do not exist or are too volatile or misaligned to support scaled formal markets (e.g., establishing proof of identity, bankability, property or transaction recordation, or pay-as-you-go models in the developing world);

(b) established businesses that would derive supply-side efficiency benefits from moving existing transaction systems onto a Blockchain (e.g., foreign exchange, mortgage processing, car rentals, business incorporation); and/or counterculture, techno-evangelist, or libertarian initiatives (e.g., crypto-currencies, protest movements, peer-managed sharing models).

In any of these typologies, and particularly in “high delta” markets, a critical design challenge emerges from the paradox that the environments in which a Blockchain system could be most beneficial in addressing systemic transaction deficiencies are often commensurately volatile and therefore at odds with the fundamental rigidity (and benefits) of Blockchain’s computational logic. Where the addressable market presents the largest and/or most rapidly growing population of underserved or dissatisfied potential participants who could benefit from a Blockchain system, the immutability and predictability essential to Blockchain’s promise will need to be reconciled with the inherent environmental dynamism.

Essentially, to derive the reliability and integrity of the decentralized system, there must be one “law” that automates consensus and disallows disputes, bias, or manipulation. The underlying computational code objectively determines whether a proposed exchange will be processed and become and remain a part of the growing “chain”. As one commentator remarked, “To be part of a community supporting a blockchain is to accept the rules of the network as they were originally published. In a blockchain transaction, you don’t have to trust your counterpart to perform their obligations…, since these processes are standardized and automated, but you do have to trust that the code and the network will function as you expect.”⁴ With this in mind, empathic consideration of all aspects of the ecosystem, and cutting twice and measuring once, in system design and implementation is crucial, especially (but not only) in high delta environments, whether in developing or developed nations.

As communities scale, and in any case with the passage of time, the probability and degree of divergence and need for adaptation will only increase. Given the immutability of any given Blockchain, and the hardwired technical rejection of intermediation or dissent, emerging or evolving communal needs that materially deviate from the premises at origination will essentially force the creation of new Blockchains (or “hard forks” that split out non-conformity), thereby diminishing the potential benefits of aligned scale and automaticity. Particular thought must be given to the types and effects of probable evolutions or divergence in those needs and contextual considerations.

Yet, across the growing discourse around blockchain, this critical element of empathy appears to be under-considered. This is especially the case where the technological aspects of this invisible ledger system, for which there is a lack of common norms or language, or clear regulatory guidance, are being nominated or trialed for use in cultures or communities with lesser digital fluency or modernized transactional experience. In such instances, the supplier’s image of a seamless, reliable operating system empowering a previously unbanked community to access its offering — say micro-grid solar power on credit enabled by a Blockchain currency and delivery system — could succeed or fail based on suitability to more human realities on the ground, whether on a consumer or business-to-business level, regardless of flawless technical design and application.⁵

Interestingly, the ability to gain the type of perspective necessary for empathic design will typically require a concerted pairing of data-gathering as to more quantifiable factors that can be assessed digitally with hands-on, in-market immersion focused on culture and context. Examples of attributes that will need to be empathically observed and understood through in-person interaction may include:

  • Language and communication norms
  • Digital and technological fluency
  • Virtues and stigma relating to the transaction type at issue, and to honoring commitments generally
  • Demographic biases or nuances (racial, religious, gender-based, or otherwise)
  • Prior direct or indirect history relative to the transaction type
  • Pain or pleasure points in existing or proximate systems

This type of ethnographic sensitivity, combined with the more supply-side forces driving the application (e.g., reducing verification costs and default risk, or reducing intellectual property) will put systems designers in a far better position to harness blockchain technology that is actually suited for use. Starting from a better-informed and holistic approach to such factors, and understanding that any blockchain system will not exist not as an isolated silver bullet, should increase the probability that a system has anticipated some contextual shifts over time. It stands to reason that starting from an empathic perspective at the outset will support receptivity, utility, and durability.

For the premise and promise of a particular Blockchain application to succeed, it will be necessary for the system to “fit,” and not merely function. There is no shortage of smart people around the world in academia, philanthropy, technology, law, government, and industry thinking about, investing in, and even applying Blockchain. There is an exuberance and fabulist energy (as well as notes of cynicism or caution) to the dialog that has a gold rush feeling suitable to a frontier moment. There is dramatic potential for Blockchain (and an “Internet of Contracts”) to accelerate the benefits and attributes of trust and fitness for purpose, even at scale and in dynamic environment. Applying an empathic, “whole system” approach to designing Blockchain applications may be key to bringing that potential to bear.

¹ Derived from the Harvard Business Review’s ongoing Blockchain series. See, e.g., Murck, Patrick “Who Controls Blockchain?” (HBR, April 19, 2017) (“Murck”)

² World Economic Forum Global Agenda Council on the Future of Software and Society (2015)

³ Kirshbaum, J., Blockchain in High Delta Markets: Manufacturing Trust in Unstable Environments, Institute for the Future, May 27, 2016

⁴ Murck.

⁵ Zuckerman, E., and Barabas, C., Can Bitcoin be Used for Good?, The Atlantic, April 7, 2016 (citing Palmer, D., Pushing Bitcoin for Third World Issues can be “Techno-colonialism,” United Nations Research Institute for Social Development, 2016

Acknowledgements:

In addition to the sources cited herein, I am indebted for insight and provocation to many thinkers addressing Blockchain and Bitcoin, including Alex and Don Tapscott (The Tapscott Group); Marco Iansiti and Karim Lakhani (Harvard Business School); Michael Casey, Joichi Ito, Neha Narula, and Robleh Ali (MIT), Primavera de Filippi (Berkman Center for INternet & Society at Harvard University), and Heather Marsh. While all of these thinkers informed and elevated my thinking, any and all errors or misdirection are mine and mine alone.