The 3 “C”- Communion, Convention, and Certification.
Today in our society “Communion” is a necessity, “Certification” is the guarantee, and “Community” is a convergence. And if tomorrow blockchain…
Since its debut by the hands of its anonymous creator known with the pseudonym of Nakamoto Satoshi, blockchain technology has progressively become a familiar topic even for the general public. Indeed, we are now witnessing the first applications of Satoshi’s incredible protocol, and yet, in spite of its moderately wide appeal as a topic for the media, there is still confusion and uncertainty surrounding its real potential.
To clarify the changes that this technology might bring to our social system, it is necessary to pause and take a detached look at the shape of the current situation.
Our social and economic systems hinge on three important pillars: communion, convention, certification.
Communion: because it is undeniable that there is a constant exchange — economic, interpersonal, contractual, emotional — between all components of our society.
Convention: because in our social narrative we have created accepted roles and values which form the base of our realities and our certainties. This means a network of exchange, but this is only a set of conventions which draw us together and create a community.
According to a fascinating theory set forth by the world renowned historian, researcher and professor Yuval Noah Harari,[1] humans, unlike other living creatures, benefit from a type of perception which, in addition to being subjective and objective, is also intersubjective. Thanks to this last type of perception, it is possible to build up a reality around a collective narrative, which, after being shared intersubjectively, represents the reality of our present, as well as our history.
Indeed, we would be stunned if we were to observe ourselves and our society through a pair of binoculars.
One of the clearest examples of this complexity is the measurement of time: most of humanity interacts based on the Gregorian calendar,[2] which started its timer at the moment of the birth of Jesus. However, to cite an example from just one of the other possible dating systems, year one for the Islamic calendar corresponds to year 662 of the Julian calendar. This is a system of time-keeping which does not represent a small number of persons. In our tax declaration, however, we must refer to the year in act according to the Gregorian calendar.
Or instead: by convention Monday is the start of the week; a train leaving at 18.00 has a set agreed-upon time; it is not some random point in space-time.
The European Council has tabled a proposal to abolish the annual passage to Daylight Savings Time[3] and has put off the debate to 2021: whatever the final decision is, it is evident that we will follow the instructions which are determined by it. The exact time is therefore a common reference point and is certified by respected, and thus recognized, institutions, nothing more.
The same holds true for a light grey ticket with “5 euro” written on it. This slip of paper corresponds to one-tenth the value of the larger orange one with the wording “50 euro”. This is the reality, but again not for the intrinsic value of truth or worth, but rather by social convention. In the Eurosystem, Banca d’Italia issues banknotes in relation to, and based upon, the European accords for monetary policy.[4]It assumes the authority to print currency and guarantees its amount and validity.
The same can be said about the legal effects resulting from an act of marriage, or rather the end thereof, following a divorce. This holds true for so much else.
Certification: it is a word derived from the late Latin certificare, which is itself composed of certus(‘certain’) and facere (‘make’), or rather to formalize/authorize with a written certificate.
Today certification is of great importance, the honor and duty of authorities or recognized institutions. Anything which attests to credibility and legitimizes titles or rights is always a mechanism of certification.
But what are its essential characteristics? Certification is essentially composed of two fundamental elements: certainty on one hand and immutability of temporal information on the other.
A record of certification is by law preserved in specific archives which contain indisputable information. Today certification is connected to the concept of consultable conveyance, which pertains to an immutable fact or event and is recognized by the system. It must follow that the certification, in form and substance, is accepted and even recognized as valid by the legal system. It is protected by law and by convention it generates various effects.
From this point of view, as a result, it is necessary to focus on how certain, widespread and shared (exchanged) information translate into rights and guarantees by creating trust and credibility.
In our society, these three ingredients- certainty, dissemination and exchange- generate the trust which functions as the lubricant of the system, and consequently produce the vital sap for the economy and trade.
More specifically, we can say that “Communion” is a necessity, “Certification” is the guarantee, “Community” is a convergence.
But let’s go back to the concept of certification in our current system: the sum total of all certifications constitutes the map of information stored in the ledger, that is to say in that hypothetical master ledger or archive maintained by the authorities or officially recognized institutions. It is this master ledger which determines and gives access to the certainties to which we refer when we organize our existence in terms of legitimacy and legal claims.
The information recorded in the ledgers are also part of ARCHIVES which permit analysis, monitoring and authentication and which, before the advent of information technology, were written and stored on paper.
With the arrival of digitalization the body of information stored and exchanged was catalogued and preserved on paper, but its overall organization is based on centralized logic and has remained the same throughout time. What continued changing was only the means of storing it — perhaps those vast cabinets with shelves filled with file folders tied up with strings don’t exist anymore- but the principle has remained the same. Yes, access to and consultation of some information has improved, surely the monitoring and the speed of certain steps has been made easier, but in fact its entire structure replicates the same paradigm which existed beforehand, the only difference being the use of digital tools to perform the tasks.
This process has included all the official institutions of certifications, from the archives of the banks to the offices of the real estate registry and public administration, but it has also struck other more modest and circumscribed settings, like, for example, institutes responsible for agri-food certificates.
It stands to reason that the only official certificate possible thus far has been, by its very nature, centralized. However, having said that, blockchain technology may prove to be, indeed it will surely be, useful for certifying information and permitting open access for a wide range of people in a transparent and immediate way.
And not only that, with the advent of artificial intelligence, the same technology will be a tool for interfacing. To give a practical example, the consortiums for prosciutto or cheeses DOP or wines DOC might be both the object and subject of sure and incontrovertible information during the production process. It may include certified data about aging, stocking, the origin of raw materials and so forth:greater transparency, reduced possibility of falsification, and thus greater protection for all parties, consumers and producers.[5]
In the financial world, blockchain will be able to guarantee a new system which will substitute the traditional system of paper-based certificates, relaunching collectives of shareholders and micro-shareholders with a wider audience and more transparent management.
Its applications in real estate could open up a new system of collective investment funds and more rapid transactions. By using intelligent contracts, our economic system will guarantee the automatic execution of the legal commitments of parties, thereby reducing litigation and guaranteeing greater contractual protection.
Much, if not everything, could be tokenizable.
In short, many sectors could draw advantages from blockchain technology, from copyright protection to the buying and selling of goods and property, even the tracking of production and supply chains.
In many situations, with new certifications via blockchain, it will be possible to do away with the intermediaries and issue shared, transparent, open-access certificates. This might reduce to a considerable extent the importance of certain roles and create a new system of relationships between citizens.
Certainly, no small thing!
The three pillars, the three great C’s of our system — Communion, Community, Certification –, would still lie at the base and would remain the system underpinning our society, even if this system would take on a new and unprecedented form.
But the celebration of the new technology, which sometimes has been defined by some experts as potentially “destructive to the system”, also entails, in keeping with its founding vision, the concept of decentralization. This implies disintermediation, and thus the altering of the reference point of “trust” as we now know it.
This is because the real power and extraordinary reach of the technology, which will be flexible and useful in many fields, will have its greatest impact only when the technology undermines the principle of centrality at the heart of the current system.
In substance, as long as blockchain is applied within the confines of private situations controlled at the source by centralized authorities — a sort of exclusive “security guard” — it will perform a task very similar to the transformation which occurred during the transition from paper-based to digital record keeping, remarkably improving its efficiency without changing the analog paradigm.
But such technology possesses intrinsic characteristics which are also capable of bringing about a transformation of the morphological and structural paradigms of our society if more widely used: whereas Community would remain an unaltered necessity, Certification might be a consequence of that Community and no longer vice versa. In that way it would really mean a re-assessment of our system.
From this perspective, blockchain would cause a reevaluation of the performance and governance of many services. It is right to imagine, in fact, that any activity currently regulated by a “central authority” might be reorganized into “peer-to-peer, trust-based network(s)”.[6]
This transformation could lead to the reorganization of a large number of structures, and here we are referring not only to credit institutions, legal bodies, notary organizations and so on, but rather to the titans of the web, today real and proper monopolies of data processing and access, whose certifying role is totally self-referential.[7]
In this way, technology really could bring about a new interpretation of “our system”. It will mix up and reposition some certainties while probably also creating a new system of interpersonal connections with social relevance.
Some may smile at this, but I believe that it is necessary to allow the right amount of time, and it will definitely not be tomorrow, for this to be absorbed into the system.
Giovanni Perani
[1] See https://www.ynharari.com/
[2] Introduced by Pope Gregory XIII on 4 October 1582 to substitute the Julian calendar
[3] See http://europa.eu/rapid/press-release_IP-18-5302_it.htm
[4] See https://www.bancaditalia.it/compiti/emissione-euro/index.html
[6] See https://www.fondazionebassetti.org/it/focus/2017/09/blockchain_la_tempesta_in_inte.html
[7] See https://www.nytimes.com/2018/12/04/opinion/blockchain-bitcoin-technology-revolution.html
