Blockchains – carriers of democratic processes?

Democracies worldwide are facing a number of challenges. Technologies are transforming societies and social relations without politics being able to understand these processes of change in time, let alone manage them effectively. Where existing systems reach their limits, windows of opportunity for new technologies emerge. It seems no coincidence that Bitcoin, the first cryptocurrency based on blockchain technology, became established in 2009, immediately after the economic and currency crisis.

An important part of the digital (infrastructure) transformation recently emanated from blockchains. Like TCP/IP, on which the Internet is based, blockchains are protocols that not only allow programmable contracts and transactions but also to predetermine the rules that guide contractual relations. Exchanged over decentralized peer to peer networks, they allow virtually any type of transactions to be validated cheaply and securely. All parties have insight into the full blockchain, where all transactions are stored in a tamper-proof manner.

Despite the current hype, blockchains, like other innovations, are ambivalent in that their repercussions on systems such as society and politics depend on the applications built on this protocol. Nonetheless, one key aspect of this technology is of particular importance. Even though the radical transparency made possible by the complete traceabilty of all transactions in the blockchain can be limited by anonymization, a blockchain in its basic design is capable of permanently altering the current form, perception and actual use of public discoursive spaces. In this context, transparency as a principle has been gaining importance for several years and is also discussed as a human right, since it is itself of fundamental value for the realization of other human rights such as freedom of expression.

Beyond often discussed possible blockchain applications such as elections and outsourcing of administrative tasks, a corresponding research agenda would need to explore under which conditions this technological innovation can be adopted in fluid and flexible societal contexts, who defines its rules, and what this means for shaping the public space in which citizens conduct democratic discourse. Looking at the use of blockchain technology for democratic purposes, three sets of questions are in my view of central importance:

1. What are the repercussions of transparency of blockchain applications on social actors and their participation in discourses in the public sphere, especially through the omnipresent availability of past interactions contained in blockchains? While established news media such as the New York Times are already using blockchains to measure and track the truth of a given text, the focus here should be on how such models can change the public sphere. What impact does the omnipresence of this information have on participation in public discourse and how does the perception of transparency as a fundamental right change?

2. Trust in the sense of legitimacy and enforcement of decisions is the basis for the functioning of democracy. Until now, trust has been generated and guaranteed by democratic institutions. Blockchains offer the prospect of shifting the generation of trust from institutions to the protocol and could thus lead to a loss of legitimacy of the monopoly position of state rule-making and arbitration. Such, among others, is the thinking in institutions such as the European Central Bank when blockchain-based cryptocurrencies take over traditional functions of money. So to what extent do blockchains have the potential to compete with basic state services? What mechanisms characterize a transaction model on blockchain technology between citizens and the state?

3. Social and political processes are constantly changing, relying on negotiation as a central mechanism for establishing consensus and cooperation as the basis of democratic legitimacy. At the same time, modifications in public blockchains occur through consensus, and where consensus cannot be reached due to classical coordination problems, the system fragments through forkings, as the example of Bitcoin shows. The informality necessary for negotiation is in tension with the rigidity and irreversibility inherent in blockchain applications. How can the tension between this rigidity and the need for informality as a characteristic of ever-changing social relations be resolved? To what extent are consensually programmed applications, as sets of rules that are difficult to change, at all suitable for capturing socially fluid contexts?

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