Future of Sovereignty in a Blockchain World

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* Article: No Gods, No Masters, No Coders? The Future of Sovereignty in a Blockchain World. By Sarah Manski and Ben Manski. Law Critique (2018) 29:151–162

URL = https://www.academia.edu/36871389/No_Gods_No_Masters_No_Coders_The_Future_of_Sovereignty_in_a_Blockchain_World

Contextual Citation

"Technologies in general have tendencies that are materially inherent and not simply produced by social context. This is because a technology is itself a structured set of relations that enables or con-strains different sets of possibilities. Thus, while it may be true that the process of uncovering a technology’s material components becomes increasingly chal-lenging as one moves to the digital realm (Leonardi et al. 2013), so too does it becomes easier to discover the intentionality behind digital materiality: the intended tendencies of blockchain technology are directly available in block-chain code." (https://www.academia.edu/36871389/No_Gods_No_Masters_No_Coders_The_Future_of_Sovereignty_in_a_Blockchain_World)


Abstract

"The building of the blockchain is predicted to harken the end of the con-temporary sovereign order. Some go further to claim that as a powerful decentering technology, blockchain contests the continued functioning of world capitalism. Are such claims merited? In this paper we consider sovereignty and blockchain technology theoretically, posing possible futures for sovereignty in a blockchain world. These possibilities include various forms of individual, popular, technological, corporate, and techno-totalitarian state sovereignty. We identify seven structural tendencies of blockchain technology and give examples as to how these have manifested in the construction of new forms of sovereignty. We conclude that the future of sovereignty in a blockchain world will be articulated in the conjuncture of social struggle and technological agency and we call for a stronger alliance between technologists and democrats." (https://www.academia.edu/36871389/No_Gods_No_Masters_No_Coders_The_Future_of_Sovereignty_in_a_Blockchain_World)


Excerpts

Claims regarding how the Blockchain will affect Sovereignty

Sarah and Ben Manski:

"claims regarding the changing structure of sovereignty tend to clus-ter around three functional qualities of blockchain: first, its use as a ledger of transactions of digital assets; second, its wide distribution among stakeholders/ maintainers; third, its encryption of the transactions stored in ‘blocks’ of data linked together chronologically in a chain. Altogether, these function to facilitate new forms of trustless exchange, speed information sharing and connectivity, and disintermediate service provision by central entities. As a powerful decentering technology, it is argued, blockchain contests the dominant institutions of world capitalism.Are such claims merited? It is true that blockchain technology is still in its infancy and that there are significant hurdles to widespread commercial adoption. Pointing to cryptocurrencies’ early problems, it has lately become fashionable among the punditry to declare the entirety of blockchain a hoax (Gerard 2017). Yet we cannot help but note the prevalence of articles that at once predict block-chain to have no major effects while at the same time castigating the technol-ogy for undermining the power of regulatory authorities, financial institutions, juridical bodies—take your pick (e.g. Jamie Dimon, JPMorgan Chase; see Gandel 2015). We believe the claims of blockchain technologists to be worthy of critical attention because they represent intelligent consideration, resource investment, and strategic action toward particular ends; they are literally coding the world they wish to see. The cognitive praxis of agents engaged in social change activi-ties can be a particularly useful source of empirical data (Manski 2018). While we do not here provide a thorough evaluation of claims, we do use them as sign-posts pointing the way forward from in-process projects toward possible futures." (https://www.academia.edu/36871389/No_Gods_No_Masters_No_Coders_The_Future_of_Sovereignty_in_a_Blockchain_World)


Seven tendencies of blockchain technology and the structural qualities that produce them

Sarah and Ben Manski:


  • Verifiability

Transactions are assured through encrypted network consensus mechanisms in such a form that all transactions from the very first to the most recent are recorded in a ledger open to its maintainers, reducing information asymmetries2.


  • Globality

Digital transactions and cultural information flows transcend geographic space and national borders3.


  • Liquidity

Value liquidity is enhanced as the location of a store of value that does not depend or is not under the direct control of a sovereign, central bank or private corporation4.


  • Permanence

The ledger of transaction is immutable by design5.


  • Ethereality

Transactions are conducted in a digital medium6.


  • Decentralization

The ledger is widely distributed among many stakeholders and maintainers.


  • Future Focus

Found in newer developments of blockchain such as Ethereum, a stored autonomous self-reinforcing agency (SASRA) is formed in the temporal displacement of action through the use of smart contracts enabling the prefigurative recording of future transactions."

(https://www.academia.edu/36871389/No_Gods_No_Masters_No_Coders_The_Future_of_Sovereignty_in_a_Blockchain_World)


Five Possible Blockchain Futures

Sarah and Ben Manski:

Individual Sovereignty

"The technical politics of the Bitcoin blockchain are often described as libertarian in part because the design choices of this first blockchain emphasize the technology’s tendencies toward liquidity and decentralization. The builders of blockchain technology emerged from the self-identified cypherpunk movement of cryptologists and coders; Satoshi Nakamoto was a member.

As Nakamoto wrote in an email to early collaborator Hal Finney, ‘It’s very attractive to the libertarian viewpoint if we can explain it properly’ (Nakamoto 2008b).

Back when Satoshi had first launched the software, his writings were drily focused on the technical specifications of the programming. But after the first few weeks, Satoshi began emphasizing the broader ideological motivations for the software to help win over a broader audience. (Popper 2015 p. 30) Those economic libertarians who identify as ‘Ancap’ (or ‘anarcho-capitalist’) claim society best facilitates individual will in a free-market economy free from regulation by states or large corporations. The discourse of Bitcoin enthusiasts is revealing: the use of the term ‘mining’ to describe blockchain maintenance and ‘coin’ to describe a chain of digital signatures speaks to their fondness for gold. At the same time, libertarians generally share a faith in progressive technological determinism, believing that society can be improved and that social relationships and institutions can function more effectively through the use of new technological tools. Blockchain forms, such as Bitcoin, institutionalize this ideal by enabling a form of trustless direct exchange among individual property owners. Applications such as uPort ID seek to wrest control of personal data from major corporations and governments, as well as to provide privacy protections to individuals (ConsenSys 2015). Evidence is widespread and multiplying of efforts by technologists to use blockchain technology to challenge existing hierarchical institutional forms with peer-to-peer networks. It seems questionable, however, whether large numbers of people — as citizens, consumers, producers, etc. — will embrace a total shift from regulatory oversight toward a disaggregated society of autonomous individuals picking and choosing between peer-to-peer legal codes of arbitration and enforcement of agreements."


Popular Sovereignty

After more than two centuries of building a world beyond capitalist logics, the coop-erative movement is well positioned to make the most of blockchain’s tendencies toward globality, liquidity, permanence, decentralization and future focus. Through these, blockchain is beginning to convert the long standing vision of a popular ‘cooperative commonwealth’ into the actual construction of a ‘global technological commonwealth’ enacted through the use of advanced exchange, communication, and governance technologies (Manski 2017). There are many current examples of applications that make the global decentralized exercise of a popular sovereignty possible. Blockchain for Change has developed Fummi, an application that uses blockchain’s immutability and globality to store digital identities for those lacking permanent homes (Schiller 2017). Applications that make use of blockchain’s tendency toward future focus (Aitken 2017)—via the utility of stored autonomous self-reinforcing agency (SASRA) to handle contract administration and management — can be found in the development of AgriLedger for agricultural cooperatives (Hammerich 2018) and of the Pylon Network for energy cooperatives (Klenergy 2017).

Decentralized commons-based currencies such as Duniter and Faircoin (Bauwens 2018) are now in use; these have been coded to reduce inequality via pro-vision of a Universal Dividend (also known as Basic Income) and other features. And emerging on the horizon are a series of next generation technology platforms designed to bypass bottlenecks and inequalities contained within current block-chain architectures; the most notable of these is Holochain (Brock and Harris-Braun 2017).We think blockchain is a powerful tool for the cooperative movement in its quest for economic democracy because many of blockchain’s tendencies toward globality, permanence, decentralization and future focus move parallel to ongoing cooperative projects. Additionally, we see in the distributed and secure structure of block-chain a limited safeguard against suppression should capitalist states move against blockchain-based pro-democracy initiatives.

Activist use of simple virtual private network (VPN) or Proxy systems to access blockchain applications is much less vulnerable to state attack than has proven the case for many centralized and ‘above ground’ social movement organizations. To the extent that the construction of a global technological commonwealth faces obstacles, these lie not in the tendencies of blockchain technology but instead in the somewhat insular path dependencies of the cooperative movement itself. We are uncertain as to whether democratizers will prove capable of creating a culture sufficiently open, user-friendly, expansionist, and politically ambitious to maximize the possibilities offered by blockchain.


Technological Sovereignty

Technocracies are characterized by powerful actors and institutions able to maintain unequal positions of power through their use and control of technical knowledge. In tending toward ethereality, blockchains favour those with superior technological knowledge and positionality. Blockchain coders enjoy a comparative advantage over lay users because in calibrating blockchain over multiple prototype iterations, coders establish a lasting frame of reference through which they imagine alternatives and make design choices. This agency can be used toward different ends—as a means of resistance to capitalism, or as a means to personal profit, or as path to power consolidation. Notably, the early days of blockchain coding have seen an organizational com-mitment to open source. Open source code is co-created in a cooperative manner and appears to be dominating the core development of blockchain. This may be true because blockchain coding is more demanding than other types of programming and because group participation in creating blockchain-based applications is inherently more purposive than individual participation in development. As blockchain applications become more lucrative, however, we are wit-nessing a growing cast of corporate in-house blockchain developers and blockchain developer billionaires. At least one tendency of blockchain technology — future focus — may be leading toward a sovereignty not of technologists but of the technology itself. The development of SASRA could enable the creation of blockchain businesses that run themselves with distributed and decentralized profits, management, and services. These independent DAOs (decentralized autonomous organizations), would automatically leverage manifold smart contracts, thereby eliminating the lawyers, accountants and bureaucrats whose job it is to confirm the trustworthiness and legal standing of contracts between parties (Dew 2015). One example is Colony (Rea et al. 2018), which is testing a decentralized platform for work collaboration. Overall — whether in the technology or the technologists, or in service of democracy, capital, or self — we see little question but that blockchain technology tends in every way toward some form of technological sovereignty.


Corporate Sovereignty

With their abilities to mobilize unmatched financial resources, major corporations are exploiting blockchain’s tendencies toward verifiability, globality, liquidity, permanence, and future focus to forcibly adapt the technology to their own purposes. For example, Kodak, Amazon, Facebook and other corporations have identified the potential benefits of creating their own platform cryptocurrencies. Blockchain cryptocurrencies can include smart contracts that automatically dole out the company’s currency as a reward for developers who build apps on its platform or users who engage in desired behaviour. This kind of corporate ‘token economy’ has the flavour of a traditional company town; in this case the owner of the online space is the sovereign. And corporations are extraordinarily bad sover-eigns (Lessig 2006). Indeed, already functioning corporate sovereignties such as Google claim and expand their exclusive sovereign territory by absorbing existing spaces (Bratton 2016 p. 144). The introduction of blockchain’s powers of verifiability and perma-nence could further the degree of data granularity captured and monetized by these corporate platforms. All of this has the immediate effect of strengthening hierar-chies, centralizing power, exacerbating inequality, and generally weakening democ-racy. Furthermore, as some of the most advantaged players in the world system, corporations enjoy a significant head start in the race to program their logics into mainstream blockchain applications, as well as the capacity to enact state policies that block new applications threatening future disintermediation. Where the environ-mental economics literature describes ‘technology forcing’ as technological devel-opment driven by regulatory pressure, we see a similar process underway in the cor-poratization of blockchain toward the ends of corporate sovereignty.


Techno-totalitarian State Sovereignty

Many have claimed that blockchain technology will inevitably weaken the nation state, and in the final analysis, it may. Yet at the moment, national and transnational state institutions are actively working to support and regulate favoured types of block-chain activity and otherwise, where blockchain applications are disfavoured, ‘to regu-late it out of existence’ (Nicolaci da Costa 2018). They are going about this by crimi-nally investigating initial coin offering (or ‘ICOs’) (De 2018), demanding currency exchanges turn over user information (Paul 2018), enacting capital gains taxes on cryp-tocurrency trades (Bernard 2018), criminalizing non-state cryptocurrencies (Iyer and Anand 2018), and more. At the same time, major powers such as China, Russia, Japan, and the United States, as well as regional technology leaders like Uruguay, Estonia, Slovenia, and Kenya—as well as subsidiary states—are all jockeying for comparative strategic advantage in the development and deployment of new blockchain technolo-gies (Tapscott and Tapscott 2016).Such interventions signal the possibilities for states to expand their reach. In block-chain’s tendencies toward verifiability, globality, permanence, and future focus, state actors are finding greater capacities to intervene globally in the daily lives of individu-als. These expanded capacities are making possible the emergence of new technologi-cal totalitarian forms of state sovereignty. To begin with, states cannot easily control what they cannot measure, and a blockchain-enabled Internet of Things (IoT) amplified by artificial intelligence furthers the degree with which states can monitor the material and social world. The rapidly expanding IoT is expected to more than triple in size by 2020 to nearly 21 billion devices (Stravridis and Weinstein 2016). When there is a tiny blockchain-connected chip embedded in each material object with which we interact, state institutions will assuredly seek to monitor and discipline the personal, political, and economic activities of the many. This prediction should not be controversial. Political parties in power regularly use targeted voter suppression technologies to gain partisan political advantage (Palast 2000; Norris 2014; Simon 2016). Police forces use technology to engage in ‘predictive policing’ that disproportionately targets communities of colour (Jouvenal 2016; Winston 2018). State welfare agencies use technology to track and restrict how food assistance money is spent or pension fraud or error (Templeton 2016; UK Govern-ment Chief Scientific Adviser 2016). The Chinese state is moving to a whole new level of state control with the creation of a national reputation system ranking individuals based on their economic and social status (Chinese State Council 2014). Altogether, recent history gives us reason to expect that state interventions into the development of blockchain technology are more likely to lead in a totalitarian rather than democratizing direction." (https://www.academia.edu/36871389/No_Gods_No_Masters_No_Coders_The_Future_of_Sovereignty_in_a_Blockchain_World)


Discussion

From the conclusion, by Sarah and Ben Manski:

"Earlier we stated that as a still young technology, blockchain offers interpretive flexibility. Yet as proposals become institutions, interpretation comes under the influence of structural forces. Structures possess within them powers that lean in some directions and not others. The structures of blockchain technology, we have found, tend more toward more distributed, democratized, and technologized sov-ereignties. Yet many of these same tendencies can be—and are being—channelled and recast both by corporate capital and states; actors that are well prepared and highly incentivized to take advantage. Corporations in particular have both a tem-poral advantage as early movers as well as the resources to hire technologists and rent state officials in attempts to both code and regulate the blockchain world of the near future. Against such advantages, we see little likelihood of effective dis-aggregated resistance by libertarian proponents of individual sovereignty.Popular sovereignty, on the other hand, may have a future. Cooperatives and democracy activists may find themselves capable of overcoming their early struc-tural disadvantages by building a coalition of technologies and broader publics. As we have repeatedly pointed out, much of the motivating ideology and daily practice of blockchain coders is idealistic, utopian, decentralist, and cooperative. Furthermore, many blockchain technologists became wealthy through early investments in cryptocurrencies and are thus free of the dictates of wage slavery. As the proximate constitutionalizers of the new blockchain world, technologists are in a potentially determinative position and their affinities matter. Add in the strong desire for the kind of world society that cooperatives are programming into their blockchain applications that was articulated in the global democracy wave of 2008-2014, and we see that a rising of global popular sovereignty may not be so improbable after all."