According to the Fall 2018 issue of MIT's Sloan Review Magazine, “Blockchain technology is set to be a major player of the future digital economy.” Increasing numbers of independent experts and specialists from top institutions have begun to agree with this. But some are going further to say that it can even reshape how civilisation functions in more ways. Last year, the Electronic Frontier Foundation said that, “the amount of energy required to download tweets, articles, and instant messages which describe what 'the blockchain' is and how 'decentralised' currencies are 'the future' will soon eclipse the total amount of power used by the country of Denmark.”
But what is a blockchain?
As Edward Snowden explains, blockchain is basically a new kind of database “backed by fancy math.” Yes, it's simply that boring. And there is nothing revolutionary about the technology itself, per se. What is revolutionary is a certain unique characteristic.
Imagine a chain (resembling a database) made up of separate blocks (resembling entries). The unique characteristic of blockchain is that any update to the chain is added at the end. And no previous block (entry) in the chain (database) can ever be modified or deleted. For example, if you send USD 100 to a friend, you cannot simply delete or undo the block (your transaction and its record) once it is done. Your friend has to send back the USD 100 to you, which will be recorded as a new transaction that will be entered at the end of the database. Now, let's say you sent USD 100 but you want to send USD 110 instead. For that, you cannot simply just modify your USD 100 transaction and add another USD 10 to it. You have to complete a new transaction transferring another USD 10 that will again be added at the end of the chain as a separate entry—thereby preserving the sanctity of the historical record in its truest form. In the old database, any entry can be changed by simply typing over it.
What makes this characteristic valuable? In one word, according to Snowden: “trust”.
To understand the significance of that through one real-life example, let's consider what happened in Cyprus after the 2008 global financial crisis. After the crisis, unlike countries where their governments decided to bail banks out, banks in Cyprus were allowed to “bail in”—which means they were allowed to confiscate depositors' accounts to save themselves. And although the seized funds were converted to equity—giving people bank shares in exchange for their confiscated funds—it cost depositors billions of euros in just one fell swoop.
The problem this illustrates with the old system is that it allows someone to change the history of a database with just one keystroke. What blockchain does is remove the ability of someone to do this. So “blockchains are an effort to create a history that can't be manipulated.”
But how do you authenticate whether entries have been preserved in their original form?
This is where it gets technical so I won't go into too much detail. But that is achieved using something called a “cryptographic hash function”, which uses math to ensure the “uniqueness” of each entry—as even the slightest change in an entry will give a much different “hash” than what was assigned to the original entry, even if the original entry and the new entry are entries of, let's say, the same picture. Therefore, besides maintaining transaction records, blockchains can be used to record “blog posts, cat pictures, download links, or even moves in the world's most over-engineered game of chess.”
Another thing to note here is that these records are “time-stamped”—a “high-tech version of public notary.” So once the “freshly notarised records” are distributed “to members of the network, who verify them and update their independent copies of this new history... no one person or small group can fudge the numbers, because too many people have copies of the original.” “It's this decentralisation that some hope can provide a new lever to unseat today's status quo of censorship and entrenched monopolies,” says Snowden.
To truly appreciate why this can potentially revolutionise human societies, we have to understand some basic facts about societies—past and present.
After the death of Stalin and the falling out of favour of Lavrentiy Beria, there was an amendment made to the Great Soviet Encyclopedia in 1954. Beria's entry in the encyclopedia had become politically unfavourable, and so an amendment was sent out to every holder of the great encyclopedia. But in those days, because the amendment required a copy to be pasted in, it was obvious what was happening. One could easily see where the paper had been plastered on, and which page had been torn out.
In our times, there are no tear-lines and seams anymore—as the vast majority of material today is published online. History, nevertheless, is being redacted quickly and at an ever-progressive rate, without us even knowing about it.
To take just one example, a juridical basis that has been used to take down material published online is a ruling by the Human Rights Court in Strasbourg, which says that every time someone reads something on the internet, it has been re-published. This means the liability for publishers reoccurs every time someone reads something (unless individual countries have their own statute of limitation law). This has often been used by the powerful to force publishers to take down material from the internet, sometimes years after it had been published. Such instances include court cases against the powerful published by influential publishers such as The Guardian, even when the verdict of the case was never reversed and the material was adjudged to have been published “in the public interest”—with powerful groups or individuals using US stipulations in British courts to force British publishers to take down material concerning British citizens.
In 2010, UK media lawyers estimated that there were 200-300 secret gag-orders in the UK—the number has obviously gone up considerably since then. According to Julian Assange, “These are not just injunctions to say you can't talk about something, these are injunctions to say that you cannot talk about whatever the subject is, together with the fact that you cannot talk about the fact that you cannot talk about it.”
If we truly understand the history of our civilisation, then we'd understand that traditionally, our civilisation has tended to manipulate and falsify its own history. With every new innovative technique in preserving that history—for example, through the invention of writing—we have gone through an initial phase of having access to more accurate historical records, before the process of manipulating that particular technique was eventually mastered.
For the sake of brevity, I will not go into the details of why that is a problem, but ask you instead to settle for a quote and draw your own conclusions from it: “The truth about the world is the only useful ingredient in human decision-making...If we want a rich, complex, civil civilisation then we need to have this robust intellectual ingredient—historical record. So we can use it to understand our world, adapt to it, engage in the democratic process. Without that, we're sailing in the dark.”
So to summarise, blockchain could potentially reshape our world because it decentralises control over how we interact with each other, financially and in other ways—by changing and decentralising the process of how the historical records of our civilisation are maintained and the process of verifying its authenticity. And, to an extent, by changing how we speak and interact with history itself in a way that, all the best technical experts till now agree, negates many of the problems we have faced and are currently facing, in regards to our civilisation and its social structures throughout history, as mentioned above.
Eresh Omar Jamal is a member of the editorial team at The Daily Star. His Twitter handle is @EreshOmarJamal.