Blockchain will impact your life…here’s how and what you can do about it
From Silicon Valley to refugee camps and everywhere in between, blockchain is getting ready to reach out and touch everyone
Most articles about blockchain start off trying to explain what it is and how it works, or warn you against falling for the abundant hype online. Instead, I’m going to tell you why you should care, and how it is likely to impact you, no matter who you are or where you are. I’ll share the most interesting stuff first, and get into some important details later, including what you can do to control blockchain’s impact in your life. I’ll finish with some expectation management — how long until these marvelous things bring light and joy to your life? Spoiler alert: it may take years.
Why you should care
You should care about blockchain because, as a consumer through the products you buy and as a citizen through the taxes you pay, blockchain is going to expand your options. In the best outcome blockchain will enable something called “self-sovereignty,” which will allow you, and you alone, to control your identity and personal details online. If a company wants to collect and then sell your browsing history or your online shopping habits to a marketing company, first they must ask you for permission — and not through some fuzzy legalistic “terms of service” agreement, plainly and explicitly — and possibly even pay you for your permission. Blockchain can make this happen with a level of security and reliability that current methods of identity protection simply cannot.
Similarly, blockchain will give you greater choice and clarity when it comes to how your taxes are spent and the government goods and services you can benefit from. There is already a lot of research being done by governments around the world on how to use blockchain as a bridge between several new fields of technology. For example:
- The “internet of things” (IoT) will enable smart stop lights to share traffic data between each other so they can manage traffic flows on a minute-by-minute basis. This way, if one road is blocked because a car is broken down, smart stop lights can share this information between each other to ease travel and ensure public safety by routing traffic via alternate roads.
- “Big data” can collect the traffic pattern information gathered by smart stop lights from around the city and organize it in a way that reveals interconnections.
- This information can be processed by “artificial intelligence” (AI) and used to predict trends in traffic patterns, combined with urban growth forecasts, so that road maintenance and construction can be designed and scheduled to facilitate the best outcome for road users, from surface streets to highways, for years into the future.
- The value blockchain brings to this example is that it can serve as an organizational platform where all of this performance data can be combined with financial data so that policy-makers can make common-sense decisions about how to spend your taxes to improve transportation around your city. This might sound boring, but how stoked would you be if you had a mobile phone app where you could increase the amount of your taxes being spent on things you think are important, and decrease the amount of your taxes being spent on things you do not approve of?
Blockchain is like a loom that can weave together multiple strands of separate things, including these technologies I mentioned above, into an integrated fabric where you can see what the data means and adjust resources in response. So, to reiterate, you should care about blockchain because the technology is capable of giving you full ownership of your personal online data, as well as making the taxes you pay more responsive to the needs of you and your community.
How is this possible?
Blockchain is a versatile technology that is already being used for all sorts of innovative applications. I don’t want to bore you with dry technical jargon, so I’ll just share a couple real-life examples that highlight the feature I think is the most important: traceability. In the smart stop light example above — traffic flow data is being collected and processed at several levels, starting with road users and on up to where policy-makers budget money to be spent on infrastructure based on urban growth trends. To do this is outrageously complicated and requires multiple different systems, each with their own language and ways of measuring things. Blockchain is able to integrate all of these disparate systems into a larger system-of-systems, thereby making it possible to trace an action in several ways and break that information down into something you could view through a mobile phone app.
Here are some real-world examples
Blockchain technology is already being used for many things that require traceability. For example, you can buy a diamond that is registered on a blockchain application called Everledger, that tracks where it came from and who it passed through, to ensure people were not blatantly exploited in its production. Likewise, you can also buy a famous work of art that is registered with Verisart to ensure its provenance so that you are not mistakenly buying a convincing forgery. But the technology has further reaching implications and applications than just tracing open roads, diamonds, and art work. It can also help improve delivering humanitarian assistance as you can see in the early work being done by the World Food Programme in Jordan with Syrian refugees.
My favorite real-world example of blockchain traceability comes from South Africa where the UNICEF Innovation Fund is supporting the ixo Foundation and TrustLab in a project called Amply. Amply pilots the use of a unique protocol where “proof of impact” is used to verify the attendance of school kids. This is an excellent example of blockchain’s traceability feature being used in a significant way, and is a window into how powerful this technology will become with further refinement. Imagine how applications like this might improve the operations of an educational system writ large, or even an entire government. This kind of scale-up is not just limited to one’s imagination; it’s slowly becoming real, as you can see with the rapid advances being made by the government of Estonia with the breadth of operations and citizen services being put online in the cloud and managed with blockchain.
How soon will this impact me?
Like many technologies before it, blockchain may begin to creep into your life — like processing payments for things you buy online — without you even being aware. In this instance you may eventually see icons letting consumers know that their purchases are being “protected by the power of blockchain,” or some such ad line to gain your trust over a competing company that has not yet shifted over to a blockchain-based payment platform. Moves towards this type of service are already underway. But, as fast as tech gets adopted by the private sector, it may still be a few years before we get to this point. As you know, blockchain is still in its infancy, and it took the internet decades to become what it is now.
What should I keep an eye out for?
The previously referenced example of smart stop lights talking to each other through IoT and using big data so policy-makers can use data to inform decisions via blockchain about spending your tax dollars, will take considerably longer to evolve than blockchain for consumer services. Any time you talk about taxes, whether you realize it or not, you’re talking about a subset of government operations called public financial management (PFM). Without a steady stream of money, governments stop working, so PFM is pretty important. It’s so important that there are usually complex laws that control how different departments and agencies can spend the money they get. This results in a situation where many siloed systems are operating in parallel, but not talking to each other.
All of these departments and agencies are like the smart stop lights mentioned earlier — they’d work much better if they could talk to one another. And, if an interoperable system-of-systems could integrate everything then we can start achieving the kind of changes that can have a positive impact in your life. To give you some sense of how complicated this gets, as a PFM professional I published a technical paper in 2015 in the International Journal on Governmental Financial Management about how rethinking PFM is going to be a complex affair, but it is doable. My article was focused on PFM for international development, but the scenario I laid out applies to all public financial management. So, before you see the kind of mobile phone apps I described where you can track the use and allocation of your taxes, I would estimate that this is a 10-year endeavor from the point that everyone in government is on board with the idea. By on-board I mean that politicians have decided to do it, and that government workers have the capability to adopt and use the technology — something economists call “willingness and ability”.
What can I actually do?
When it comes to the ability of governments to adopt new technology there isn’t a lot you can do. In 2016 I was on a panel at the International Monetary Fund that was “Exploring the Implications of Blockchain Technology on Public Financial Management”, to a room full of fellow PFM professionals. It was not well received and several participants even vocally protested that blockchain will bring too much transparency into PFM. Lucky for you, PFM practitioners have to do whatever elected politicians tell them to do, and this is where you have immense power over the impact blockchain can have on your life. If you want politicians to get on the blockchain bandwagon and start piloting use-cases like Amply, mentioned above, then call for it by writing or emailing your representatives and tell them as much.
Some politicians are beating you to the punch, just look at this article by Democratic candidate for governor in Maryland, Alec Ross. He’s already talking about how he wants to be the first “blockchain governor.” While the moniker he has chosen might draw criticism from some blockchain skeptics, he ends with undeniably powerful words, saying that,
“…we have no technical impediments to progress. It is just a matter of political will.”
Blockchain developers may take issue with Ross’ characterization that there are no technical impediments, but there is no changing the fact that blockchain is coming to both an online retailer, as well as a government, near you. Just don’t forget, you have power over both in terms of your consumer choices and your civic responsibility to vote.