“Pretty soon you’ll be able to run a whole business on open source software” — anonymous developer (1994)
“Lol, that’ll never happen” — Oracle salesman.
Pretty soon you’ll be able to run a whole country on smart contracts on a public blockchain.
Imagine for a moment that the entire UK’s financial system was deleted. All of it. No more Faster Payments, no more Bank of England, no more big banks, each with their own digital ledger, backed by DB2, or maybe Oracle.
But more than that, imagine that all the councils had their databases deleted. And the DVLA, and HMRC, and the Land Registry.
Imagine every insurance company, car rental company, and most other regulated businesses who have dealings with the state had their databases deleted as well.
Imagine, for a moment, that that actually happened.
How would we design it differently as we went about rebuilding? Well, for one, we’d probably agree that having multiple redundant databases each with their own limited domain was a bit of a ball ache.
If you see someone sat at a computer, writing code, getting paid a ridiculous day rate, there’s a pretty good chance that what she’s actually doing is working out how to get data out of one database, and into another.
Such a large part of building a business, or running government is just getting access to various systems so you can move data from one database to another..
Right now it takes months to get a fibre into a payment scheme, just so you can send a message telling another bank to change an entry in their database. Or filling out endless forms so that some network admin at a credit reference agency will whitelist your IP address so you can send them some obscure fixed width files so they can update their database. Or if you’re lucky it might be sending XML messages over TLS encrypted HTTP, to check that a customer is really who they say they are, so you can update your database.
Regardless, all these things basically boil down to this: You’re moving data from one database to another.
Now imagine that the UK government decided that instead of all these databases, we’d just have one general database for the entire country. It’d be a huge database, and waaaay too important to outsource to one company, so instead they’d use this fancy new thing called The Ethereum.
On the first day after the Great Delete, the Government Digital Service would go through an elaborate key ceremony; 12 trusted citizens would each go into a small windowless room and roll some dice, and create the Master Key.
The government would then use this key to write a pretty simple smart contract, it would simply say:
“This is a list of the smart contracts that have legal weight in the United Kingdom of Great Britain and Northern Ireland: [ ]”
It would start off as an empty list. The address of this contract, and the public key that pairs with the private Master Key, would be published on the front page of The Times, and engraved in brass plaques and fixed to the front doors of the Bank of England.
Several small forward looking government ministries would quickly move to get back up and running. Brits love their houses, and house ownership being such an essential thing, such a high value, low volume thing, the Land Registry would probably be the first thing to get stood back up.
Firstly the Land Registry would upload a contract that says something like: “This is who owns land, and what they own. There’s also a function on this contract that can be called to change ownership of the property.”
The UK Government Master Contract would be amended to say that this new land registry contract had legal weight, and a list of all house owners uploaded to the Land Registry Contract.
Immediately two problems would arise. Firstly there was no particular way to tell one John Smith from another, and secondly checking if the correct stamp duty has been paid would have to be done by hand.
The government won’t want to hire someone to rebuild a database of citizens in order to tell all the John Smiths apart, so they decide that every citizen who wants to buy a house has to create their own secret key. They strongly recommend using a physical hardware token, with a paper backup. Before you can buy or sell a house, you have to take your secret key (your USB token) into a Post Office with 2 forms of ID.
The Post Office checks the id, and uploads your public key to a new smart contact called: Post Office Verified Citizens of the United Kingdom. It’s a simple contract that says something like: “This is a list of public keys, and the Name and Date of Birth of the citizen that presented them”. This Post Office Verified Citizens of the United Kingdom Contract is then added to the UK Government Master Contract.
To buy or sell a house now, you need to have a verified key, but this completely cuts down on one particular type of mortgage fraud so everyone’s pretty happy.
People are pleased with their new USB tokens and personal private keys. Soon Banks decide that it’s time they got onboard. Rather than having to go through all the bothersome process of actually checking your passport and birth certificate before letting you open an account, they can just ask to see your public key and check that it’s listed in the Verified Citizens of the United Kingdom contract. This saves them a tonne of time, and makes it really easy for them to sign up new customers.
There’s still no computerised money though, people are walking around with hundreds of kilos of paper bank notes, so the banks decide it’s time to get back up and running with digital ledgers.
The UK Master Contract is amended again, this time another contract is given legal weighting: “Companies that are authorised as Banks”.
Banks go through their own key ceremony process, and upload the first version of their new smart contracts to an address. This address is then included in the governments smart contract.
The banks contracts are super interesting, they have a list of Citizens Public Keys, and how much money they have deposited. These contracts have functions on them that allow you to open an account, but only if your public key appears on the Post Office Verified List of Citizens contract. The banks are super happy with this arrangement, they don’t have to pay to do expensive onboarding and identity verification.
Depositing and Withdrawing money is still a pain though. Customers keep turning up with Wheel Barrows full of cash, or empty wheel barrows they’d like filled with cash. So the banks get together and create a standard, they call it the epound contract. 1 epound is valid for 1lb of paper money. A pound (lb) of pounds (£). You laugh, but this why we call our currency the Pound Sterling. Literally a “Pound (1lb) of Silver Starlings” (the small silver coin).
The epounds contract is added to the Governments list of contracts with legal weight, and it allows anyone with a citizen approved key, or a bank approved key to send epounds to anyone else who’s also approved.
If at any time anyone wants back their wheel barrow full of cash, the can go into any bank, using the special wheelbarrow entrance, and exchange their epounds for cash. People love it. Suddenly they’re free to send money instantly to each other again, and it’s way more convenient than all those wheelbarrows. A few months later the banks quietly close and remove the wheelbarrow entrances, but no one cares, as long as they still have epounds they’re happy.
This has another unexpected benefit for the government, they can now change their Land Registry contract so that it’s not possible to buy or sell a house without sending the government the correct number of epounds for Stamp Duty as part of the process. Suddenly the government is collecting tax again, and into the bargin, they don’t have to do anything, it’s all automatic.
They like this a lot and insist that all employers now pay their employees in epounds, and they must do so by sending all your monthly payroll to a new smart contract called Pay As You Earn Epounds.
This new contract deducts the correct amount of tax, and your national insurance, and remits the remainder of your epounds to your Nominated Bank Account (another smart contract). There’s a function that can be called by any citizen to change your nominated bank account. This concept seems weird to British citizens at first, but the Danes explain that this is the way it’s always worked in Denmark and it’s actually super convenient.
Everything’s going along swimmingly, the DVLA basically copied the land registry’s smart contract and now your motor vehicle tax is automatically paid from your nominated bank account, and you can buy and sell your vehicle in seconds, with out needing to find a pen and paper and a stamp to send back the V5c form..
Some people are grumbling that everyone can see how much money everyone has, and how much they paid for their house, but Finland pops over to say this is how it’s always been in Finland. They say it’s actually not that bad, and helps create a fairer more equitable society because people can make more rational decisions about what jobs to pursue because they have better information.
Citizens of Other Countries that are plagued with political instability and corruption look on the UK with jealous eyes. As they always have done, they consider a London Property, or a bank full of Pounds to be the safest way to store their wealth, far from the greedy corrupt government of their own country. They start pressing their friends in the UK who are citizens, to hold some of these new epounds on their behalf. The government, seeing an opportunity to replace the Mighty US Dollar as the global reserve, creates a new contract and gives it legal weight. The Foreign Holders of EPounds Contract.
This contract allows foreigners to hold epounds. They’re taxed a small amount, and the contract pays them half the Bank of England base rate (itself stored as a smart contract).
Pretty soon, the UK is swimming in it. Hundreds of businesses, both in the UK and abroad have uploaded their smart contracts, and are automatically interacting with each other, with the government contracts, and with the epounds contracts. Business is booming, everywhere except Accenture and Capita who went out of business. IBM and Oracle stocks are way down too, as banks don’t need to run nearly so many databases anymore.
Political parties push versions of their proposed contracts up for the population to see. Versions with higher or lower taxes, versions with different ways of funding education or different ways of funding science and research.
The winning political party after each election is given access to the Master Key, so they can alter the Master List of contracts that have legal weight. There’s no ambiguity, they can only alter the contracts after each election, and can only alter the variables, tax rates, interest rates, benefits amounts etc on a fixed schedule. If they want to alter the Master list of contracts or those contracts, they need to call a new election.
That’s ok though, they also moved the voting onto a smart contract. Now anyone with a key, which is on the list of Citizens of the United Kingdom, can change their current preferred party in seconds. Elections happen every few weeks, and can be called by anyone who can get 2/3 of the population to agree to one. Votes are kept secret using some pretty fancy maths and algorithms like Zero Knowledge and Quadratic Arithmetic. No-one can know who you voted for, but anyone can check that the vote was fair and what the result was.
This world would be fundamentally more efficient than the one we live in now. It would be fundamentally fairer since there would be one rule for all and that rule would be plainly visible and implemented automatically. Many fewer people would work in IT and office administration jobs, freeing up their minds to pursue advances in Science and the Arts.
It’s an often repeated mantra that Global Problems require Global Solutions, and i think if you step back and look at the state of government and non government IT right now, you see a similar situation with our massive duplication and poorly integrated databases.
“Lol That’ll never happen.” — You in 2017 #OneWorldOneDatabase.