Blockchain started as a way to trade crypto, and it has now evolved to a point where it stands to revolutionize industries worldwide. But even this does not represent the full scope of its impact.
The societal changes distributed ledger technology (DLT) is likely to cause have barely been contemplated at this point, but their implications are broad and profound. Within as little as ten years, blockchain could very well solve any seemingly intractable problems of today — but it can also create new ones.
4 Ways Society May Change as Blockchain Goes Mainstream
4. Blockchain Justice
Central to these changes is that blockchain establishes a trustworthy means of engaging in peer-to-peer transactions, bypassing banks, governments, and other longstanding institutions that have exerted control over societies for millennia. The transparency and accountability of blockchain are expected to generate greater social justice, in part by enabling more equitable distribution of goods and services, offering a lifeline to some of the planet’s poorest regions.
Charitable donations, for instance, can circumvent the red tape that hampers the flow of money, food, clothing, and other commodities that are desperately needed by millions. At the same time, the visibility of transactional records makes it difficult, if not impossible, to siphon aid to the undeserving. Smart contracts also streamline distribution channels and reduce the layers of intermediaries that drive up the cost of charitable giving.
Organizations like the World Food Programme are already using digital wallets and other tools to enhance distribution and provide recipients with degrees of financial autonomy they’ve never had before. Meanwhile, new organizations built around blockchain and crowd-funding are adding weight to the fight against poverty and the rapid response to man-made and natural disasters.
3. Decentralized Power
Even though blockchain essentially democratizes economic, political, and social power away from the centers of influence that have controlled it for centuries — literally bringing power to the people — this does not mean fairness is assured. In fact, says technology writer Micheal Chukwube, blockchain could create a stark new divide between the haves and the have-nots based on who has greater access to the technology.
Blockchain requires a relatively high degree of computing power — something still distinctly lacking throughout most of the world — not to mention the skills and knowledge to even access a chain, let alone create and manage it.
And while governments and other institutions can sometimes result in oppression and tyranny, this is not usually the case. If democratic governments lose control over their constituencies to a decentralized authority, will that produce greater freedom or merely increase vulnerabilities that non-democratic forces can exploit?
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2. ID Checks
Many of the tools populating the leading blockchain platforms can be both a help and a hindrance to the social good. For instance, decentralized identities (DIDs) offer ways for IDs to be confirmed but not revealed. This is seen as a crucial element of emerging applications in the metaverse and the growing field of decentralized autonomous organizations (DAO) that coalesce around all manner of human activity.
But as CryptoNews pointed out recently, they can also open the door to increased surveillance, manipulation, and discrimination. In communities that rely on DIDs for social credit scoring, it might take only a few data points to restrict someone’s rights or access to key functions, and this might diminish other users’ scores depending on how interactions are tracked and managed.
DIDs are also highly complex, which again brings up the issue of equitable treatment for all members of a chain, not just those with the highest skill levels.
1. Regulatory Challenges
Most of these problems can be solved, or at least managed, with a proper regulatory regime. However, this will require a fair amount of work, not to mention consensus among members of the chain and perhaps multiple chains as they become more interoperable. Along with identity management, regulations will have to touch on complex elements like access, ownership, and overall governance.
Ideally, all community members will have equal opportunity to weigh in on the rules governing the chain – a job that the blockchain itself can optimize.
But as communities scale, this becomes more difficult in terms of management and participation. It isn’t hard to imagine chains with millions of members generating rules and petitions daily, making it difficult for individuals to vote consistently.
This, in turn, will hamper the ability to produce enough votes for passage of critical items or, depending on the rules, allow only a handful of users to sneak changes that benefit themselves at the expense of others.
Social cohesion is what prevents a well-ordered society from descending into chaos. Blockchain certainly has the potential to produce a more just and productive society, but this will not come about on its own. Social harmony takes work and a commitment among all members to align their behavior with the public good.
Blockchain does not change this fundamental arrangement. It merely pushes it into the digital sphere.