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by David Suomalainen

On the frontpage of The Economist edition the 31 of October 2015 the words

“The trust machine
The technology behind bitcoin could transform how the economy works

are printed. Bitcoin, which we now usually call a cryptocurrency, had then been around since 2008. It is widely considered that the author, that calls himself/herself Satoshi Nakamoto, of the whitepaper[1] that invented bitcoin comes from or at least are inspired by the so called cypherpunk movement. A movement that focuses on using cryptography to ensure the privacy of individuals online against institutions, whether they be governmental or private, which are viewed with much suspicion – a lack of trust for the current institutions in other words. It is surely not a coincidence that the bitcoin whitepaper was released in 2008, they year of the financial crisis where distrust of and between financial institutions almost lead to the collapse of the world economy, and that trust is mentioned eight times in the short introduction of the whitepaper. The whole idea behind bitcoin is to use cryptography to enhance trust between parties that do know each other and thereby eradicating the need for trusted third parties. 

Bitcoin is focused on payments, and trying to do away with some financial institutions, but as it is pointed out by The Economist 31 October edition there are many other areas where a trusted third party is used as a guarantee for correct information. This could for example notaries, organizations that guarantee parts of a supply chain (maybe that the food is harvested in an ecological way) or government institutions. At the time of the article from the Economist I worked at the Swedish Land Registration Authority, which is the agency that keeps the register of who owns what when it comes to land in Sweden. The agency has been around in one form or another since 1628 and is one of the agencies that the public has the most trust for[2] in a country that is usually regarded as a high trust society. Still, we figure that adding more trust in the digital era cannot be a bad thing and began testing a blockchain solution on the real estate transfer process. 

However, at least by that time, most people in the blockchain field spoke about blockchain as technology that improves trust, we quite soon found ourselves asking almost philosophical questions. One of them is a quite obvious one but one that I do not think that a movement like the cypherpunk movement, which consists of IT-people, really considered on a deeper level – if you are unable to read code, why would you trust code? Probably because someone you trust says that the code is correct and “good”, but does that not mean that that person, or organization, is the third trusted party?  For bitcoin, which is mainly used for people in the shadows, or even dark parts, of the Internet, there might not be a better option than to trust the code (even though we now see that many do trust third parties such as exchanges or wallet providers) but when there already have an existing process in which people trust – what is the benefit? The Economist are probably correct when it writes that the technology might transform, not disrupt or completely overhaul, how the economy works.

Another similar question is what if using technology, instead of enhancing trust, would reduce trust? Blockchains are still very much associated with bitcoin and shady business is associated with bitcoins. This might be an issue that could be solved with more knowledge and if look at discussions about Artificial intelligence (AI) many organizations and states such as EU, OECD and USA have set up groups that are looking on how to use AI in an ethical way. This seems to be needed as the use of an AI-system used for detecting welfare fraud in Netherlands in a recent court ruling[3] was found to be in violation of article 8 (right to a private life) in the European Convention of Human Rights. Analysis needs to be done but I do not think that it is a wild guess that the trust for AI and public administrations will be lowered in the Netherlands as an outcome if the (mis)use of a new technology. In Sweden we can see that the worries about that public administrations might infringe of the integrity of the individual has risen from 15% to 21% between 2015 and 2019. Similarly, the same worry about the platform giants has gone up from 29% to 49% during the same period.[4] What does this means when using new technologies and what do discussions about data ownership lead to? 

From my point of view, I think that adding a technical layer on top of a trusted process that enhances that process would be a good thing, even though this really does not match the intent of the blockchain when it was for launched. Others seem to have come to the same conclusion as many established institutions are looking at using blockchains to enhance their position – not to replace themselves. Even though some actors might find that their roles are changing or disappearing I would say that it is because trust is moving from one party to another and not to technology and that this is happening because of technology. In this transformation everyone must tread easily, and especially public administrations must be very much in line with what the people thinks. Otherwise the lack of trust in the digital world might escalate and then discussion on important topics such as data ownership will get even more difficult to have, since if there is no trust if the parties that says that you control your data and you are unable to read code yourself – what is data ownership really worth? 

Photo by Launchpresso

[1] Bitcoin: A Peer-to-Peer Electronic Cash System, Satoshi Nakamoto 2008.

[2] Se for example, Anseendemätniing 2016-2019, KANTAR SIFO (Swedish)


[4] Svenskarna och Internet 2019, Internetstiftelsen.

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