Students ask CBT leaders to express their opinions on digital identities, smart cities, and sustainability — Part II

Students interview Paolo Tasca, Nikhil Vadgama and Jiahua Xu

In an initiative led by their teacher Monica Stragliotto, high school students of the Liceo G.B. Brocchi (Bassano del Grappa, Italy) interviewed members of UCL’s CBT team. With Ms. Stragliotto as moderator, Paolo Tasca (CBT Executive Director), Nikhil Vadgama (CBT Deputy Director) and Jiahua Xu (CBT Research Project Manager). In Part I of this interview, published last week, they covered sustainability, smart cities and “super apps”. In this second part, they explore the Covid-19 pandemic, hyperconnectivity, democracy, and justice.

Monica Stragliotto, a teacher at Liceo Brocchi and moderator of the interview.

The world has been experiencing the Covid-19 pandemic since December 2019. How can digital technologies contribute to this pandemic?

• Jiahua Xu: Track and trace apps and immunity passports are some of the projects I have been observing lately. There are some studies about tracking your itinerary or projects about vaccine passports or immunity passports. These vaccine passports will contain your attributes to say whether you are immune to certain diseases or not. I suppose that, in this way, next time that we might face another pandemic or lockdown in the future, we won’t have a full country or city completely locked down . In addition, it could be pinpointed who are the most fragile or high-risk individuals to protect and those who are low risk or immune can still conduct their ordinary lives and businesses despite the emergency. This would result in a lower-scale disruption in the economy and it would also better preserve people’s mental state because I think we can all agree on the fact that we are all pretty worn out but his lockdown situation we are globally experiencing right now.
• Paolo Tasca: For the position we have towards this problem, we have seen a great contribution of digital technologies to face this pandemic especially if we compare this pandemic with previous ones that took place in the past (ref. Spagnola). Currently, data is the most precious resource we have, and we have developed technology to collect, understand and get meaningful information about data. Over the years, we have also learnt how to share data across countries and communities . In particular, there is a consortium of universities now, called Bloxberg, led by the Max Planck Institute in Germany, which is built on top of a blockchain ecosystem. Each university, including UCL, controls a validator and all computers connected to this network share data with each other. What Bloxberg has done in these last few months is to make its technological capabilities at disposal of the scientific community to share more easily and transparently data and information concerning this pandemic. This is one example that we have observed very closely, since we are involved in this initiative.
  
  Certainly, everything has started from data and new technologies to better understand and share data, key drivers to fight the pandemic. In addition, in a hyperconnected world like ours today, having these powerful technologies at fingerprint is extremely useful. Indeed, these do not represent a panacea to solve all the issues the world is experiencing but it surely helps to speed up the reaction time at least: the sooner we understand data, the quicker the reaction. This is exactly what we have observed and what the scientific community has been doing so far, like doctors and scientists to develop a vaccine, for instance.
  
  Soon data has been understood and this has led to the development of a vaccine in a very fast track mode. If we think how quick it has taken to develop and put a vaccine into the market, this has never happened before in history. A collective effort of data scientists, doctors, immunologists and all people involved in this pandemic situation.
• Nikhil Vadgama: Indeed, blockchain can be of great support in this pandemic. Just to jump into this topic of vaccines, blockchain can be helpful in the supply chain for their distribution. If we look at the vaccines that are getting into the market just about now, the one by Pfizer-Biotech needs to be stored at — 70 ° C: it must be very cold otherwise a change in temperature will result in neutralising the vaccine’s effects. So, when you have a supply chain for vaccines that will be moved from the factory to trucks, then from trucks to warehouses and then to hospitals, etc, you need to be able to track that the temperature has constantly remained at — 70 ° C because any variation will neutralise the content of the vials. For instance, supply chain using blockchain as a tool for improving the tracking of all these data regarding the vaccine during distribution is an example of how we can use this new technology also to help us ensure that our response to the pandemic is resilient. This is to make sure that we deliver vaccines that are effective and not spoiled because something went wrong during the supply chain.

Talking about risk, the pandemic we are currently living in can be considered as a side effect of our hyperconnected world. Does digital innovation pose new risks? How does regulation face these problems?

• Jiahua Xu: Good question! Hyperconnected transportation has helped the spreading of the contagion, surely. To be honest, though, the possibility that we have nowadays of having virtual meetings and reaching friends and family far away is something, I would say, that reduces the necessity for us to travel. There exist two opposing factors: the first is the convenience of transportation, so this kind of hyper connection on the one side; the second is the convenience of communication, which on the other side reduces the first need. This is actually good and it also makes sure that we stay connected in this difficult situation.
  
  I would be reluctant to blame the development in transportation for the spreading of the virus. Instead, things can be improved in, e.g. the medical space or the supply chain space (some kind of evidence proving that the virus spread through the supply chain of fish is now current speculations). Definitely, in this sense, we have learned our lesson, for sure. In this covid situation, my take is that digital innovations cannot be taken as culprits but the others may have different views.
• Paolo Tasca: Interesting and difficult question to answer, as well. The problem we come from is a logical loop that has started in the 90s with the wave of globalisation and Noble prizes such as Joseph Stiglitz claiming how important it would have been to have a globalised world, where everybody would have been better off if we had been more connected to each other. However, after 30 years the results that we observe are not those that we expected. The results show that there are still a lot of problems, not just connected to welfare inequalities but even new risks have emerged, as pointed out in the question.
  
  There is a problem that in network theory is called the “Rich get richer” rule: a “preferential attachment” or self-enforcing mechanism that forces the economic agents in the network to be more likely connected to those that are more important in the ecosystem. This procedure creates hubs in our world, there are plenty of them but they are vulnerable and prone to be attacked; and so we have observed a kind of tradeoff between the layouts of our socio-economic systems. There is a tradeoff between efficiency and robustness to attack. What the network layout of an economic system depends exactly on this “preferential attachment” rule.
  
  What we have noticed in the last years is that the topology of our networks, which is very good for efficiency or performance goals, is not necessarily the same topology that guarantees robustness against external attacks. The issue here is this tradeoff that remains. Therefore, in the last few years, we have been focusing on promoting a global economy that should always be efficient, that runs fast and always produces a high-rate GDP every year. However, this topology configuration that came out has resulted in not being sufficiently robust to attacks and being extremely unequal. We saw this in 2008/9 with the financial crisis, we are seeing it now in the healthcare crisis which is currently turning into an economic crisis, etc. This is really telling us that our world is very complex and we do not really understand even how we organise ourselves as a community and so what is the best configuration for us to keep on living in this world. For sure, we have learnt that the best configuration does not exist, it is rather a kind of balance that we always need to find in a dynamic way. So, what is the best for us in terms of performance and in terms of robustness and resilience with respect to external attacks?
  
  Unfortunately, my answer is not really positive because there is no solution for this problem, it will never be solved. Crisis, economic ones and even pandemics will always emerge in the future because instability is an inner principle of our socio-economic systems…

During our analysis of the SDG Agenda we have also discussed Goal 16, focusing on the necessity of spreading democracy and justice more equitably. We have seen decentralized systems based on hyperconnectivity as a possible solution to reach this goal. Considering the ongoing digital innovation, how can our current socio-economic situation be considered: centralized or decentralized? Is a balance between the two possible? Which are possible scenarios for the future according to you?

• Paolo Tasca: I think this question is pretty much connected to the previous one so the answer I have just provided can surely fit in here. The point that is made in this question actually refers to which is the best configuration, so to be centralized or decentralised. As already mentioned before, there is no answer to this problem, since we have observed a trade-off in centralisation and decentralisation, and this trade-off is exactly what I’ve explained before. What science has examined so far is that centralised systems usually perform better but they are more prone to attacks; decentralised systems are less prone to attacks but do not perform as efficiently as centralised ones.
  
  Moreover, if we just focus on decentralised systems, it is also important to consider how decentralisation has been reached. And as discussed before, if there are certain rules that operate in socioeconomic systems (such as rules of “preferential attachment”), we create supernodes that are very vulnerable to external attacks. This means that the system will tend to spread out inequalities rather than the contrary. So there is a subtle balance in the roles that these supernodes can cover in these systems. In good times maybe they can help to spread out welfare and even wealth more equitably but in bad times they may amplify wealth inequalities. So again, unfortunately, there is no answer to your question.
  
  What I am about to say is just my personal opinion. Personally, I think that potentially this needs to be searched within the underpinning cultural infrastructures of society because every community has some cultural differentiations that can become triggers to a centralised rather than a decentralised system. So to say, a community may perform better in a centralised mode rather than another community that, in slightly different conditions, can potentially perform even better in a decentralised way. So this really depends a lot also on these subcultural features of the community. Certainly, this deserves still a lot of research and observation that’s why Centers like ours exist and we daily research on these topics because they affect not only the financial market (on which we have worked extensively) but also other areas of society. I think this is and remains an open question that has not been fully addressed at this stage.
• Nikhil Vadgama: The only thing I would like to add to what Paolo has explained so far is that almost everything is centralised within society. There are just very few things that are decentralised. There have been interesting experiments with decentralised organisations in the blockchain space, where there is no sort of central controller. Everyone has a vote depending on the effort or the investment or whatever they have put into this particular organisation that is entirely built on rules that are coded in a particular technological structure. Individuals that participate in this structure vote based on the allocation of what I have described before (e.g. effort, investments in tokens, etc). Unfortunately, these experiments have not gone very well. So there is certainly this argument at the moment that these decentralised structures are very much the ones that work better but indeed there are benefits of decentralisation that we are still not at the stage where the technology is ready to facilitate that decentralisation.
• Paolo Tasca: Let me also add that we should also avoid taking a clear line of action with respect to this topic. In good times decentralised systems work very well because they allow everybody to contribute to the common good by sharing ideas and adding to the public debate. However, in bad times and during crisis a centralised system performs better because decisions must be taken quickly, time cannot be wasted in philosophical discussions. Also in this not only cultural features but also contingent situations tradeoff between what is better and what is not, either centralised or decentralised. As mentioned by Nikhil, all these crypto-anarcho-anti capitalistic communities that popped up years ago and found a kind of support in the Bitcoin community 11 years ago because it promotes governance models that are decentralised against the established institutionalised types of organisations, showed up to be incapable of fulfilling their promises.
  
  For instance, if we examine the Bitcoin community very closely as we do every day at the CBT, we have observed that the top 100 addresses in the Bitcoin economy control the majority of the wealth that is produced by this economic system. The same for the producers (miners) of Bitcoin, who are around 10 or 7 big corporations (mining farms) that control the supply of this decentralised cryptocurrency that should have fulfilled this idea of a decentralised world. Thus, all these ideological movements that started 11 years ago smashed with reality: in truth, the reality is the complete opposite right now. Actually, the Bitcoin economy is more centralised than the current real-life economy, which represents a paradox of the current anti-establishment and anarcho-anti capitalistic systems stemming from underground communities.
  
  We are working on this and we are trying to fix these problems but the main issue is an inevitable tendency of any socioeconomic system towards centralisation, especially when economic incentives are put in place. Because of economic incentives, people tend to behave in a way that the system turns to be centralised in the long term, so towards an effort of accumulation of wealth (in the case of the Bitcoin economy, the effort of accumulation is towards Bitcoins, indeed). That’s the current situation and the reality that has to be faced even for the cryptocurrency communities.