Blockchain Technology And Decentralized Governance

Blockchain Technology And Decentralized Governance

In a context of exponential technological development, old centralized models of governance may be outdated. Opportunity may come from a new trend towards decentralization, which allows organizations facing global challenges to trial a range of novel solutions adapted to local contexts. In this perspective, what might be the role of the United Nations? It could operate as a platform, offering a neutral interface to facilitate interactions among a broad range of stakeholders. To bring this vision to life, the best vehicle would be an independent UN Labs that harnesses the potential of blockchain technology to support better global data flows, and catalyze the development of decentralized solutions to global challenges.

This article is a contribution to the Global Challenges Foundation report:
Global governance in the age of disruptive technology“.

Technological change is accelerating, and can be simultaneously observed in a range of uncorrelated industries. Most evident in the information and communication sector, it has created a globally connected world, and exponentially increased the level of uncertainty around the globe. In this context, centralized forecasting by hierarchical organizations has become a blunt and inadaptive tool – but opportunity may arise from an increasing trend towards decentralization.

Blockchain is emerging as one of the key technologies to support decentralized models of organization. Blockchain was invented in 2008, and implemented first in the Bitcoin cryptocurrency. Blockchain based solutions work on a network of computers or smartphones, connected together over the Internet. Its fundamental innovation is that through novel use of cryptography and smart software, the nodes in the network are able to share inalterable data without a central authority. The system works even if the participants never met, or even if they do not trust each other. While the first and still most prevalent application is the storing and transfer of value, underpinning a true digital money native to the Internet, the ambitions and potential applications of blockchain go beyond that field.

The innovation of blockchain enables decentralized organizations to dynamically decide how to allocate resources to achieve their goals. Blockchain systems are based on a shared universal ledger that records data, transactions, and agreements, allowing anybody to verify them without relying on a central authority. This mechanism is already at work in open source software development, where the most popular software libraries are incorporated in a large number of applications. But success now goes beyond reputation, and naturally includes an economic dimension, as most blockchain systems incorporate a tradable cryptographic token whose value reflects the popularity of the project.

Decentralization has two main benefits for organizations facing global challenges. It allows them to more easily implement novel solutions, and to trial variations on the same solution. New approaches can be tried in one part of the network with limited risk and cost, and, if successful, easily circulated, reproduced or adapted across the entire organization. This model directly replicates evolution as it occurs in biological systems, and is crucial for creating resilient systems adapted to their environment.

We can do more than merely recognize the blind forces of evolution in action. Since we can observe and evaluate their implications, orienting them in desirable directions becomes possible. This new interplay promises superior results. In a decentralized structure, a wide variety of solutions can be implemented and tried out on the basis of a shared global understanding and broad common policy directions. What needs to be done is understood globally; how it is done is understood locally.

Decentralized organizations are naturally non-exclusive, and not necessarily determined by geography: it is possible to belong to a decentralized organization regardless of one’s location, and to belong to several of them simultaneously. This is enabled by the real-time global communications networks that have been developed over the past thirty years. Various networks and their members now exist side by side, within shared social and physical locations. This lack of physical separation imposes a much higher degree of tolerance for diversity, and points towards a new kind of coexistence where disagreements cannot be resolved through physical conflict.

In a world driven by decentralization and the emergence of the Network Society, organizations like the United Nations have the opportunity to become a platform – an interface to facilitate interaction and communication which is as neutral as possible, and is not built on the assumption that identical solutions will work in different settings. Importantly, advanced information and communication technologies allow platforms to operate more rapidly and efficiently compared to systems that need to develop ad-hoc interfaces, and to achieve qualitatively superior results. They do this by feeding data into the process, supporting decision making by smartly aggregating opinions, and building consensus in a manner that goes beyond the mere dictatorship of the majority.

One key area where the UN could operate as a platform is by providing access to open, transparent and accountable data flows in a neutral manner, in order to support a range of practical applications addressing global challenges. Such data flows originate from sensor networks, which are becoming ever more universally deployed and connected – forming a decentralized and distributed version of what is often referred to as ‘the Internet of Things’. These sensors provide a fundamental reading of objective reality. For example, private and public sources can independently fund numerous air quality monitoring stations deployed across a large metropolitan area. Citizens can make short- and long-term decisions based on the high quality, accessible, aggregated information that they produce. This is already happening in Beijing, and is transforming the conversation around local environmental policies.

Blockchain technology would optimally support the aggregation of those various data flows, because of its transparent and accountable nature. but implementation must be done in a nimble manner. A potential vehicle could be a new UN Labs, which should be isolated and protected from the larger body of the United Nations. It is naive to believe that a large organization such as the UN can be easily reformed: there is often a protection mechanism, a veritable immune system, that maintains the established practices of hierarchical bureaucracies, and is able to produce honest justifications for killing new initiatives, even if they are wrong.

The mandate of the UN Labs should come directly from the highest functions, ideally from the Secretary General. Its resources could be relatively modest, but it must recruit a combination of highly qualified new staff and self-selecting members from across as many agencies as possible. This will ensure novel technical capacities, while preserving access to and deep understanding of organizational mechanisms.

The objective of the UN Labs would be to develop and rapidly release blockchain based components that can be made available to developers worldwide. Possible applications should not be established by the laboratory itself or larger UN agencies. Because the platform is neutral, and because access to data is open and unfettered, thousands of unexpected, creative and valuable solutions could flourish, developed by other entities: government agencies, NGOs, and private corporations. The measure of success for the UN Labs would be objective: running code, used in thousands of places worldwide, powering applications installed in billions of mobile phones, supporting the design and deployment of tens or hundreds of billions of sensors.

Giving access to blockchain based decentralized data sources and applications will allow a new dynamic balance to emerge. It will yield resilient local solutions to global challenges, and fundamentally increase the adaptability of human societies in the 21st century.

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