Will blockchain fulfil its democratic promise or will it become a tool of big tech?

Engineers are focused on reducing its carbon footprint, ignoring the governance issues raised by the technology writes John Naughton in The Guardian

Illuminated rigs at the Minto cryptocurrency mining centre in Nadvoitsy, Russia. Photograph: Andrey Rudakov/Getty Images



When the cryptocurrency bitcoin first made its appearance in 2009, an interesting divergence of opinions about it rapidly emerged. Journalists tended to regard it as some kind of incomprehensible money-laundering scam, while computer scientists, who were largely agnostic about bitcoin’s prospects, nevertheless thought that the distributed-ledger technology (the so-called blockchain) that underpinned the currency was a Big Idea that could have far-reaching consequences.

In this conviction they were joined by legions of techno-libertarians who viewed the technology as a way of enabling economic life without the oppressive oversight of central banks and other regulatory institutions. Blockchain technology had the potential to change the way we buy and sell, interact with government and verify the authenticity of everything from property titles to organic vegetables. It combined, burbled that well-known revolutionary body Goldman Sachs, “the openness of the internet with the security of cryptography to give everyone a faster, safer way to verify key information and establish trust”. Verily, cryptography would set us free.

At its core, a blockchain is just a ledger – a record of time-stamped transactions. These transactions can be any movement of money, goods or secure data – a purchase at a store, for example, the title to a piece of property, the assignment of an NHS number or a vaccination status, you name it. In the offline world, transactions are verified by some central third party – a government agency, a bank or Visa, say. But a blockchain is a distributed (ie, decentralised) ledger where verification (and therefore trustworthiness) comes not from a central authority but from a consensus of many users of the blockchain that a particular transaction is valid. Verified transactions are gathered into “blocks”, which are then “chained” together using heavy-duty cryptography so that, in principle, any attempt retrospectively to alter the details of a transaction would be visible. And oppressive, rent-seeking authorities such as Visa and Mastercard (or, for that matter, Stripe) are nowhere in the chain.
 
Given all that, it’s easy to see why the blockchain idea evokes utopian hopes: at last, technology is sticking it to the Man. In that sense, the excitement surrounding it reminds me of the early days of the internet, when we really believed that our contemporaries had invented a technology that was democratising and liberating and beyond the reach of established power structures. And indeed the network had – and still possesses – those desirable affordances. But we’re not using them to achieve their great potential. Instead, we’ve got YouTube and Netflix. What we underestimated, in our naivety, were the power of sovereign states, the ruthlessness and capacity of corporations and the passivity of consumers, a combination of which eventually led to corporate capture of the internet and the centralisation of digital power in the hands of a few giant corporations and national governments. In other words, the same entrapment as happened to the breakthrough communications technologies – telephone, broadcast radio and TV, and movies – in the 20th century, memorably chronicled by Tim Wu in his book The Master Switch.

Will this happen to blockchain technology? Hopefully not, but the enthusiastic endorsement of it by outfits such as Goldman Sachs is not exactly reassuring. The problem with digital technology is that, for engineers, it is both intrinsically fascinating and seductively challenging, which means that they acquire a kind of tunnel vision: they are so focused on finding solutions to the technical problems that they are blinded to the wider context. At the moment, for example, the consensus-establishing processes for verifying blockchain transactions requires intensive computation, with a correspondingly heavy carbon footprint. Reducing that poses intriguing technical challenges, but focusing on them means that the engineering community isn’t thinking about the governance issues raised by the technology. There may not be any central authority in a blockchain but, as Vili Lehdonvirta pointed out years ago, there are rules for what constitutes a consensus and, therefore, a question about who exactly sets those rules. The engineers? The owners of the biggest supercomputers on the chain? Goldman Sachs? These are ultimately political questions, not technical ones.

Blockchain engineers also don’t seem to be much interested in the needs of the humans who might ultimately be users of the technology. That, at any rate, is the conclusion that cryptographer Moxie Marlinspike came to in a fascinating examination of the technology. “When people talk about blockchains,” he writes, “they talk about distributed trust, leaderless consensus and all the mechanics of how that works, but often gloss over the reality that clients ultimately can’t participate in those mechanics. All the network diagrams are of servers, the trust model is between servers, everything is about servers. Blockchains are designed to be a network of peers, but not designed such that it’s really possible for your mobile device or your browser to be one of those peers.”

And we’re nowhere near that point yet.

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Pakistan's Brave Judge

Najam Sethi in The Friday Times

Justice Athar Minallah, Chief Justice of the Islamabad High Court, has made history. He has ordered the Capital Development Authority (CDA) to knock down the Pakistan Navy’s Sailing Club House on the edge of the Rawal Dam in Rawalpindi as well as the Monal Restaurant in Islamabad and seize the Margalla Greens Golf Club in the Capital, because these have been built illegally on land belonging to the Margalla Hills National Park. He has thus outlawed the military’s claim to about 8000 acres of such land. Most significantly, the good judge has expressed the view that the Pakistan Navy does not have the authority to undertake a real estate development venture, nor the right to lend its name to any such enterprise.

Naturally, this judgment has warmed the cockles of millions of Pakistani hearts even as it has raised the hackles of powerful people lording it over unaccountable state institutions which have similar illegal stakes in real estate across the country. For starters, the Auditor General of Pakistan has revealed a list of 79 “encroachments” on the land of the Margalla Hills National Park, noting that several government bodies – CDA, Metropolitan Corporation Islamabad, Islamabad Wildlife Management Board, etc. – claim the right to control and manage the area, making the job of adjudication of rights and permissions difficult.

Justice Minallah’s judgment has also ignited questions of how courts have earlier dealt with such matters relating to the rich and powerful as opposed to the poor or feeble. In recent times, two cases have roused public indignation and in both the courts have been inclined to bend over backwards to appease powerful stakeholders. The first is that of Imran Khan’s sprawling multi-billion rupee estate in Bani Gala which was illegally constructed many years ago and brazenly “regularized” by the CDA on orders of Justice Saqib Nisar. In pursuit of this court order, the wretched chairman of the CDA who sent a questionnaire to Imran Khan regarding the property was swiftly dispatched to the nether lands and the journalist who quoted a news report exposing the PM’s shenanigans was served with a “show cause notice” by PEMRA. The second is a high rise luxury apartment construction at 1 Constitution Avenue Islamabad, a list of whose owners reads like a Who’s Who of the high and mighty (Imran Khan was one such). This building again, was “regularized” by the Saqib Nisar court, in sharp contrast to the demolition orders of lesser structures and lay encroachments in Karachi ordered recently by the Chief Justice of Pakistan, Gulzar Ahmed.

This is just the tip of the iceberg. The highway robbery began at the time of partition in 1947 when tens of billions worth urban and rural evacuee property of Hindus and Sikhs was seized by the new lords of the state and distributed freely over the years to their favoured assets and allies regardless of merit or due process. In time, the parliaments of the state began to make laws for cheap acquisition of lands and properties belonging to Pakistanis for the avowed purpose of building public parks, educational institutions or military security and defense installations. These land were then leased out at throwaway rates to favoured institutions and individuals, only for the latter to quietly transform these into high value, exorbitantly profitable commercial ventures in the private sector (housing societies, clubs, marriage halls, golf courses, etc). And that is how “Military Inc.” irresistibly came to be the leading “businessman” in Pakistan, owning airlines, shipping, hotels, banks, insurance, food, fertiliser, cement, housing, you name it. This is why Justice Minallah’s recent judgment is something to write home about. Earlier, he had put a stop to the practice of the civil bureaucracy allotting valuable residential and commercial plots to themselves and judges at throwaway prices to ensure protection against land-grabbing claims and law-bending practices, thus casting the first few stones at the established disorder. Which other court or judge will follow his laudable example and make these singular milestones in Pakistani history?

The Supreme Court is now faced with another public interest challenge. The Supreme Court Bar Association led by lawyer Ahsan Bhoon has filed a petition challenging the lifetime disqualification of PMLN’s Nawaz Sharif and PTI’s Jehangir Tareen from holding public office for not being “sadiq and ameen”. This petition follows revelations of high level judicial impropriety, misconduct and political bias by ex-CJP Saqib Nisar (that name again!) made by ex-CJ Gilgit-Baltistan, Rana Shamim, aimed at knocking out Nawaz Sharif from politics. To prepare the ground further for appropriate judicial review, the ex-Secretary of the PTI, Ahmed Jawad, has now come out of the closet to level accusations of judicial and military manipulation to oust Nawaz Sharif from office and hoist Imran into it. His allegation that Supreme Court judges disqualified Jehangir Tareen in order to “balance” their unfair ouster of Nawaz Sharif is bound to impact the trial and appeals of Mr Sharif in multiple cases and help pave the way for the judiciary to reclaim its lost credibility. It is significant that Justice Athar Minallah is also seized of adjudicating the allegations of ex-CJ GB Rana Shamim, and he will now be hard pressed to include the testimony of Ahmed Jawad in his deliberations.

Is Justice Athar Minallah the man of the moment? The history man?

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