How Blockchain Can Improve Politics

Credit: Arkansas Money & Politics (www.amppob.com)

It’s no secret that American politics is broken. Our system is increasingly dysfunctional and ineffective, with citizen trust in government hovering near historic lows. Recent sessions of Congress have been amongst the least productive (in terms of bills becoming law), of all time. Partisan division is the worst it has been in decades, with geographic segregation by political views, becoming a defining feature of American life. A prominent majority of the country expressing dissatisfaction and concern, with the direction that our nation is headed in.

A range of solutions have been offered. Some have called on Americans to speak with one another individually (so that we might better understand and empathize with our fellow citizens, despite our differences. Others have argued for reducing the influence of money in politics. Prominent analysts also believe that the process by which Congressional districts are drawn, and the closed nature of most primary elections, are major culprits in our current situation.

Each of these reforms merits consideration. Yet, there’s another approach, grounded in a relatively new technology, which could have a dramatic, transformative impact upon American politics: Blockchain.

First off, what exactly is blockchain? It’s a complex technology, but let’s review the basics.

As The Economist explains, blockchain is best known as the technology which underpins Bitcoin, by facilitating financial transactions, between individuals who don’t know each other, and without the involvement of a third party (i.e. a bank), since blockchain basically acts as a “trusted third party.” This system has helped make Bitcoin, while still not mainstream, increasingly popular. Blockchain functions through a mix of sophisticated mathematics, advanced computational tools, and cryptography.

Blockchain tracks, and provides proof of, the payment history and ownership of each and every bitcoin in existence, through a decentralized “distributed ledger” (that is, in various locations or “bitcoin nodes”, which is shared with every party within a required network). Thanks to this approach, transactions will only clear if they meet the requirements of the network/system, and there is a permanent record of all transactions (nothing can be erased). The graphic below, produced by the World Economic Forum, provides an excellent illustration of how this system works.

Credit: World Economic Forum (weforum.org)

Colin Turnbull offers an interesting analogy, to better illuminate the workings of blockchain. Imagine that a piano fell from the sky, onto the middle of a crowded city street. Dozens of bystanders witnessed the event, and each is independently strapped to a lie detector, and shares what he or she saw. In the blockchain, each of these people would be the distributed “nodes” of the system, each registering an account of what they saw. The lie detector, is the cryptographic process, by which the truth of outcomes are verified, and in order for something false to be recorded, over half the people (of half the “nodes” in a system), would have to tell the exact same lie, without being able to coordinate. Of course, this is rather difficult.

Blockchain offers disruptive potential, for applications far beyond bitcoin-based transactions. Because of how it facilitates and distributes trust and transparency in transactions between parties, blockchain is being used to validate property/land title transactions in the Republic of Georgia and elsewhere (helping ensuring authenticity of any property purchases, transfers, or claims, in places where fraudulent conduct runs rampant). Blockchain makes self-executing smart contracts possible, facilitating a range of transactions, and reducing the need for lawyers and brokers. It can help ensure better identity management and verification, both online and offline. In the world of finance, the promise of blockchain is nothing short of transformative, as it allows both for a significant reduction in transaction costs (both money and time), and an ability to decentralize, which will allow for new, innovative approaches to take root in areas like venture capital, payments, lending, and more.

What about politics? At first glance, this might seem like an unusual arena for blockchain applications. Unlike the earlier examples, politics isn’t a series of discrete, unemotional transactions. Rather, it tends to be highly contentious, ideological, and deeply grounded in social, cultural and economic identity (look no further than the Brexit vote, or the 2016 US presidential election). Yet, upon deeper examination, there are several compelling ways in which blockchain might be applied, to make American politics better.

One of the most obvious applications of blockchain, is in voting itself. The 2000 presidential election, which was a complete circus, replete with recounts of votes and “hanging chads.” In subsequent years, we’ve learned that voting machines are highly vulnerable to hacking (as seen most recently at the 2017 Def Con Convention in Las Vegas), which ultimately throws the integrity of elections into question, undermining our democracy.

How might blockchain help? As Ben Dickson explained in VentureBeat explained last year, because of the “distributed ledger” structure of blockchain, votes could be stored in many “independent nodes” (i.e. different locations), which would make modifying or tampering with votes “theoretically impossible.” In blockchain voting, each voter could be assigned a “wallet” (a sort of user identifier or credential), and a “coin” (that is, a chance to cast a vote), the results of which would be stored in various nodes. Platforms like Follow My Vote (a blockchain venture which allows for secure, anonymous voting, monitored in real time), and Blockchain Technologies Corporation (which combines blockchain voting with paper ballots) are leading the way in the United States.

To be clear, there are still challenges around blockchain-based voting (not least of which is that blockchain is traditionally anonymous, and meant to avoid the involvement of third parties, while voting is managed by governments, and requires verification of identity). Also, while blockchain votes might be secure, online voter identification (i.e. pass codes to gain access to the blockchain), can be vulnerable to hacking. Still, as these issues are gradually resolves, blockchain can improve voting mechanisms, which can in turn ensure trust in the electoral process.

Over the past 12 months, few catchphrases have become more prominent than “fake news.” Politifact named fake news as it’s 2016 “Lie Of The Year), thanks to Twitter accounts (many of which were bots) and websites which churned out a steady stream of misinformation. Numerous false stories went viral on Facebook, while BuzzFeed documented how teens in Macedonia created thousands of fake news websites, targeting American voters.

While we are uncertain as to the extent to which fake news swayed the election (towards any candidate), there’s little doubt that promotion of outright falsehoods, regardless of political viewpoint, isn’t helpful to the functioning of our democracy. It is difficult to have any real debate or discussion, around the best way forward, when individual citizens are working from completely different sets of facts, some of them patently untrue.

Blockchain offers solutions here as well. Warsaw-based startup Userfeeds is working to stem the spread of fake news, by using blockchain to implement a ranking framework, which uses a blockchain ledger, and “reputation tokens”, in order to offer a voting system. Users and publishers of content (as well as software developers), can create their own rankings of content, which are factored into search results, to decide what content is actually shown to users of a platform, and in which order. Those who are ranking content, can also back the recommendations offered by others.

Userfeeds’ participants will be rewarded for productive behavior by digital tokens, which acts as a measure of authority and reputation. As Userfeeds noted in a recent blog post, the incentives of platforms like Facebook, or online publishers (who typically optimize for clicks and advertising revenue), aren’t aligned with the motives of people who actually use the platform (i.e. they have no “skin in the game” as far as the actual veracity and quality of content) The company hopes to change this, and, as a result, limit the spread of fake news.

Augur offers another approach to tackling fake news. Augur is a bitcoin-based prediction market, where people bet on outcomes of various events, while Augur pays another group of individuals, to verify or report what happened. For those who verify, a digital currency (known as the Rep), monitors an individual’s propensity for truth (whether someone is reporting events accurately), by polling whether others agree with the factual assessment offered by an individual — and if so, that individual will have their tokens returned, and be paid out in cash (a reward for being truthful).

As Augur grows in scale, the facts agreed upon by it’s “reporters” can be stored in blockchain ledgers, and tapped by applications like Google, Facebook, and Wikipedia, to measure the truth of any claim that is circulated (essentially, creating a crowdsourced “digital market for facts”, which stems the rapid spread of fake news). Remember, as with Turnbull’s “falling pianos” analogy, since the parties engaged in verification can’t coordinate with each other, an organized consensus of misinformation (i.e. “fake news”), becomes far more unlikely.

Blockchain can also do something far more radical than anything we’ve explored earlier: Remove politicians from politics, through blockchain-based direct democracy. As Sue Brideshead explains in Vice, political representatives “evolved out of necessity”, since in the early days of this country, it wouldn’t have been possible for citizens to travel to Washington DC for each vote. In today’s era, however, Brideshead argues that we might form voting districts through use of public records (based on geography and population numbers, rather than gerrymandering), and use a secured smartphone app, to vote directly on issues.

Brideshead proposes that in the United States, app-based democracy (powered by blockchain) ought to start at the local level, where political staffers (who would be hired more on merit, and less on partisanship and ties to special interests, as is done today), will draft a basic version of a piece of legislation. This legislation will originate not from these staffers, but rather, from ideas proposed by voters, who would use the petition format, offered by Change.org, and the upvote model, utilized by Reddit, to indicate interest. Text message alerts would guide this process, to ensure that a wide enough group of voters indicate interest in the issue.

Once a certain threshold is passed, government administrators and staffers will collaborate with the voter who originally proposed the petition, to draft a final version of the legislation, for consideration by the broader electorate. A majority of the electorate will then decide whether this legislation ought to become law. Brideshead also argues that at higher levels of government, politicians and political parties could run on the implementation of a direct democracy voting system pledging that “I will set up a system for you to rule yourselves.” Over time, this voter-centric, blockchain system, could work it’s way up the political chain.

As Brideshead acknowledges, this system, like any new technology, faces challenges, including voter apathy and lack of knowledge, as well as the possibility of deliberate misinformation and manipulation. These issues will have to be resolved over time. Yet, as Brideshead argues, today’s system is broken, and change is needed. Blockchain-based democracy offers a solution, whereby voters are empowered.

Blockchain, whether applied to voting machines, news curation, or the political system itself, is not a panacea for the many challenges we face. A variety of strategies will be required, in order to bring about lasting change. Yet, blockchain offers a powerful mechanism to incentivize truth, increase transparency, and make politics work better. We must give it a chance.