Blockchain technology has been heralded as a disruptive agent that has the potential to change the implementation of programs and services in many sectors.  As such, blockchain has been celebrated as a potential tool for good: a means to promote transparency, build trust and reputation, and enhance the efficiency of transactions. It has even been considered as a solution to addressing poverty, particularly in the Global South.  

However, it is important to remember that implementing applications on the blockchain is a tool, like many other digital and non-digital tools. Emerging technologies like blockchain can never be the only solution, and they cannot solve social problems. Whether or not they are used to further marginalise people or help them secure their rights depends on how those tools are developed and utilized. 

WHAT IS BLOCKCHAIN?

Put simply, blockchain consolidates different innovations in order to produce a tamper-resistant distributed (i.e. decentralised) ledger of transactions.  This can include but does not have to be limited to only financial transactions. A transaction could be the exchange of money, as it is with cryptocurrencies, but also activities like completing a series of requirements for a certification, issuing of an educational credential, issuing an ID, granting food voucher, establishing a health history, etc. – really anything that involves the digital transfer of something of value from one party to another.  

The record of each transaction is stored in a “block” of information, including information such as a timestamp, currency amount, actions taken, etc. With the exception of the first block in the chain (called the “genesis block”), every block has two “hashed” numbers – one hash is matched with the number in the preceding block, and the second number will be matched to the next transaction.  Thus, every transaction associated with that item of value will be recorded in a linear “chain of blocks” that makes up the entire ledger of transactions. Users can verify every block independently. 

Actors within a blockchain network are called “nodes”, and each node has a copy of the digital ledger. Blocks are not stored centrally, but rather throughout the blockchain network, with digital markers used to point towards the location of the next block. They can even be implemented without a central authority such as a bank, company, or government. Since every block is tied to subsequent blocks, tampering with just one block would result in creating an entirely new blockchain – and blocks cannot be altered without the consensus of the whole network. Thus, it is nearly impossible to tamper with just one block in the middle of the chain, and to attempt it would require an enormous amount of computing power. Adding new blocks to the chain follows an established protocol and requires validation and consensus of all network participants, which can be done through different methods.  The digital objects themselves (i.e. digital coins, credentials, certificates, etc.) are kept in the current owner’s digital wallet. 

POTENTIAL BENEFITS AND POSITIVE USE CASES

Blockchain has been hailed as a potential solution for a variety of issues in the public sector. Most of these programsfocus on implementation of financial solutions (mobile money, secured financial transactions) in remote locations, for groups who typically lack access to formal banking or financial systems, or in places with lack of trust in financial institutions. 

For example, Blockchain for Change, a start-up founded in New York City, has aimed at using blockchain to allow homeless people to access food pantries and shelters, tap into financial services, and generally manage their digital identities. A much heralded blockchain-based program launched in May 2017 by the United Nations World Food Programme (UN WFP) at the Azraq Refugee Camp in Jordan allowed agencies to create virtual accounts for refugees and upload monthly cash deposits, for use in the camp’s supermarket via an authorization code. By some reports, the programme has contributed to a reduction by 98% of the bank costs entailed by the use of a financial service provider.

Blockchain has also been presented as a solution for enhancing transparency in supply chains. The allure of knowing where your purchases come from has driven discussions on ethical sourcing and “conscious consumerism”, particularly in Western countries.  This has fueled the rise of product certification programs like Fairtrade and “Certified Organic” designations, as well as the expansion of “farm-to-table” restaurants. Blockchain has been introduced to help improve transparency in an agricultural sector rife with supply chain and authentication problems. The use of blockchain technology to log in information about the origin and quality of poultry produce has led to a wave of technology use in rural China. This exemplifies how trust can be effectively built with technology within communities. However, it also reinforces that at the point of direct interaction between the system, and human beings still rely on human-to-human trust.  

THE RISK OF VIOLATION OF RIGHTS

Proponents of programs such as ID2020 -- an alliance led by Accenture and Microsoft that includes UN agencies, NGOs and governments -- point out that, especially in situations of mass displacement or mass disenfranchisement, the lack of legal identity results in being denied or delayed access to services. Such initiatives are intent on developing technology to help undocumented people secure elements of identity documentation, from children’s vaccination cards to voter registration. Blockchain has been presented as a solution to deliver digital identities in a way that could help millions access aid, welfare, remittances, donations, and healthcare.

However, it is important to openly discuss the potential danger of already-disempowered populations placing their digital identities in the hands of the governments and institutions who often marginalize them to begin with.  In the wrong hands, personal Identification schemes could serve to easily identify and target selected groups, thus isolating or further marginalising individuals or communities. Problems with grave consequence have already been identified with India’s Aadhar system, and Kenya’s national Digital ID program was put on hold by a supreme court decision in early 2020, with lack of data protection and discrimination of marginalized groups cited as primary concerns. With the rise of authoritarian governments around the world over the past decade, emphasizing nationalistic identities and exclusion of “the other”, the potential for abuse and use of disruptive technologies as a mechanism of control is very high.

This also ties to attempts at incorporating blockchain into electoral processes. The right to vote is fundamental to democracies and a shift to a seemingly high-tech solution will not be adequate to address the social context of the exercise of the franchise. Application of blockchain to fix the problem of the lack of representation in the electoral process, due to non-acceptance of in absentia votes, has become more heated. Turning a blind eye to the possible faultlines in the system can delegitimise the process, resulting in disenfranchisement. These could be as simple as the inherent vulnerabilities of networked systems caused by technical glitches used to access the device at the terminal to the possibility of large-scale voter fraud. Left unattended, these pose a violent threat to democracy, degrading the sanctity of the electoral process and thereby defeating the very purpose of increasing access to franchise to more people. 

Blockchain, specifically the underlying algorithms that power blockchain, requires a large amount of computing powerto implement, which can translate to using a large amount of energy resources. As the use of blockchain technologies increases, the amount of computing power used to power them can skyrocket. Some research has been done to map the impact (i.e. “footprint”) on resources and the environment as a result of digital solutions that require large amounts of computing power. It is possible that environmental impact of increased energy needs may fall disproportionately on less wealthy communities, particularly in the Global South.  At the very least, this is an acute risk. 

RECCOMENDATIONS

The innovative use of blockchain through varied applications is not prevented by the concerns around it. Therefore, it is necessary that they be addressed, facilitating the best use of the technology. The increased possibility of open government through blockchain can empower the citizenry as well as democracy across the globe. Initiatives on this must be accelerated, as the possibility of ill- impacts on individuals remain minimal in such a situation. It forms one of the few ideal non-cryptocurrency applications of blockchain. Some engineers are working to reduce the energy footprint of blockchain, and continuing to invest in such research and development will be essential to making the scale-up of blockchain environmentally economical. 

In any event of large-scale deployment of blockchain technology, public audits of the same at the structural and functional levels must be allowed. This must be followed through by incorporating the changes recommended by the audits and enforcement of compliance mechanisms. Attempts at standardisation of blockchain applications at any level, must involve civil society as well as public at large. The sophistication and complications of the technology should not be used to justify shortcuts that could result in invalidating the rights of individuals. As adoption of the technology becomes more widespread and is scaled up, redressal mechanisms in public-facing blockchain applications must be put in place for individuals who suffer negative consequences. This must be done in a way that the effectiveness of or access to redress is not dwarfed by the size of the scale-up. 

CONCLUSION

While blockchain will certainly play a role in the future of our society, we must remember that emerging technologies like blockchain are not a “magic bullet” for societal ills. Technologies like blockchain are simply tools that, without limits and oversight, could be misused and end up violating rights of large groups of individuals. In the Global South, these dangers are more marked. If these technologies are not put to use to actively improve people’s access to rights, then they should not be considered neutral, but rather should be viewed as a potential tool of active oppression. To scale up blockchain applications in the Global South, it will be particularly critical to ensure systems that do not further entrench systems of oppression or old colonial inequalities. Whether or not blockchain systems are used to further marginalise people or help them secure their rights depends on how those tools are developed and utilised. 

Sapni is a final year law student School of Law, Christ, India. She writes regularly on technology policy space on matters of rights and regulation.She is one of the Founding Editors of robos of Tech Law and Policy (r-TLP).

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Purvi Patel is a lawyer and public health professional with experience in humanitarian field operations, particularly in Latin America. Her current interests focus on the intersection of data analytics and humanitarian protection.