The Radical Politics of the Blockchain
Can bitcoin give rise to a cryptographic utopia?
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When Susanne Tarkowski Tempelhof removes her cigarette from her mouth, flicks her brown, bobbed hair to the side, and stares at you with her smiling eyes, it doesn’t matter what she says next. Whatever it is will sound like it’s coming in strict confidence.
But her plans for the future of government are no secret. Based in Rio de Janeiro, Tempelhof considers herself a citizen of the world, and she wants to see jurisdictions defined by virtual space rather than physical borders. She’s using the blockchain — the technological insight that enables bitcoin — to try to pull it off.
Tempelhof is CEO of BitNation, an organization that offers services typically provided by governments. The group has grand plans to create a geographically neutral alternative to every national institution — courts, a police force, even a space agency — and to organize it all with the bitcoin blockchain, a globally shared public database that was introduced as a mechanism for processing and recording bitcoin transactions, but which can also hold all sorts of records.
“I personally think it’s global apartheid that people are restricted of their lifestyle choices or freedom of movement just because of where they were arbitrarily born, because of a piece of paper, a passport that gives them permission or not to move somewhere,” Tempelhof said last week. “To discriminate on that basis is as wrong as it is to discriminate on the basis of religion or color of skin or sexual preference. There is absolutely no difference. It’s simply criminal.”
She made those remarks last Tuesday while celebrating the webcast wedding of Edurne and Mayel, a Basque couple who had agreed to be among the first to use BitNation’s notary service to record their marriage on bitcoin’s blockchain. Notaries — admittedly among the more prosaic agents of the state — are people whose main function is to verify the identity of a customer and bear witness to that person’s signature on behalf of a government. Incidentally, this is also what happens when a bitcoin user sends a transaction over the currency’s peer-to-peer network (minus the government). First, the user cryptographically signs the transaction, as proof of identity. Then it joins a long, ever-growing chain of prior transactions in such a way that it gets time-stamped and validated by every computer on the network — a kind of mass witnessing that turns out to be incredibly difficult to tamper with.
Tempelhof and a handful of others took turns sidling up to the laptop webcam in the London apartment where Edurne and Mayel had gathered their friends. She focused her remarks on revolutionary consciousness-raising; others on technical backgrounders. Then the couple got down to the business of reading their marriage contract out loud. In line with Tempelhof’s belief in choosing one’s own legal system, Edurne and Mayel pledged to abide by the laws of Ontario, a Canadian province whose progressive politics they supported. They also chose to limit their marriage contract to a term of 42 months, allowing them the opportunity to periodically update, end, or renew their agreement. (They may, for example, need to revise the detailed rules they drafted to govern the completion of chores and the game of Truth or Dare.)
Then, in a moment of solemnity, they pulled up their blockchain IDs on their laptop. They’d made the IDs using BitNation’s software, which prompts you to enter a name, a picture and some other personal details before producing the ID. Just as many people now use Facebook to log in to other sites around the internet, the blockchain can be used to verify identity when accessing other governance tools over the Internet. With some scrolling and a few clicks, first Mayel and then Edurne cryptographically signed the digital document prepared for them by BitNation. A hash (or condensed version) of their marriage contract was irrevocably added to the blockchain.
The newlyweds and their dissident friends raised their flutes of champagne and cheered. It was done.
Well, something was done. But are they in fact legally married? Will anyone recognize this contract?
Bolting legal frameworks and verifiable personal identities to the blockchain in many ways flips bitcoin on its head. The digital currency was designed to completely replace institutions with cryptography and math. There is no court of appeal for errors, no recourse for fraud, theft or carelessness — a transaction is a transaction and cannot be undone, barring a systemwide failure known as a 51 percent attack. Bitcoin ownership comes in the form of a digital key, which does not trace back to any real world person. Therein lies the conundrum for blockchain governance: no amount of math can validate that a person is who they say they are — so far, only a state can.
Tempelhof offered her own legal analysis to Backchannel by Skype the next day: “Since it’s an agreement between two parties, and it’s provable through the ecdsa signature [a type of digital signature], and the fact that it’s in an immutable public ledger (the blockchain), it’s legally binding.”
Others remain skeptical.
“Putting loony, personal terms in a marriage and notarizing it on a blockchain (bitcoin or otherwise) is just a record of the parties’ intentions,” argues Preston Byrne, a lawyer who now acts as the COO of Eris Industries, which works with companies that want to run their own private blockchains. He adds that it “will only be legally binding if the appropriate formalities have been complied with and those formalities give rise to legal consequences.” In other words, he doubts that a court would enforce the contract.
Yet BitNation is not the only organization applying blockchain technology to a state’s activities. The government of Honduras has reportedly partnered with a company called Factom to begin documenting land titles on the bitcoin blockchain.
Peter Kirby, CEO of Factom, says that the company will begin with a single city in Honduras, and that the blockchain will be used primarily as a backup. “The records will exist in the title system separately without the Blockchain components for the court to review,” Kirby wrote in an email interview. “The Blockchain verification simply allows us to know the records are time stamped and have not been tampered with. It’s like a notary stamp on each document with a signature from a trusted party.” Ultimately the courts will have to decide how important that stamp is, he adds.
A notary service is a far cry from the virtual utopia that Tempelhof champions, one in which refugee crises and xenophobia are erased. But advocates of digital nationhood have another strong ally in their camp: Estonia, a country so forward-thinking that anyone in the world can apply to become an e-resident of it. As an e-Estonian — such as Edurne and Mayel, of course — one can register a business, cryptographically sign digital documents, and open a bank account. As of this month Estonia now offers its e-residents blockchain-backed notarization through a partnership with BitNation. (The contract that the couple loaded onto the blockchain will also be tied to their Estonian e-identification.)
Byrne, the Eris Industries COO, sees the most potential in such collaborations. “The best way to figure out how to use blockchains in conjunction with government systems such as the Estonian e-ID is to actually build and prototype systems that bridge them,” he says. “This is a great first step in that direction.”
