BLOCKCHAIN FOR GLOBAL DEVELOPMENT JOSEPH LUBIN, MALLY ANDERSON, AND BOBBI THOMASON In the last year, global interest in blockchain technologies and their possible impact has permeated the public consciousness. Although much of this early attention has focused on the financial applications, many are eager to speculate about the ways blockchain will transform societies, institutions, and the very world as we know it. Many of these predictions inspire and galvanize observers and participants alike. However, these tools are very new and still developing, therefore few are addressing the potential and possibilities of blockchain tech- nologies in the near future. So what can we do with blockchain contracts, self-sovereign identity, and technology right now? Most of the consumer utility tokens. builders of the Ethereum blockchain The Ethereum blockchain is a public, ecosystem at ConsenSys share a vision of open-source, distributed computing plat- a decentralized future that creates oppor- form that supports the development and tunity and abundance for all people. utilization of decentralized applications. Ethereum has the unique potential, and Whereas the Bitcoin blockchain was some may believe even an obligation, to designed primarily as a payment system, create a more accessible, equitable, and Ethereum allows for more diverse capa- inclusive ecosystem from the outset by bilities, including its associated cryptofuel investing in social impact initiatives now. (similar to a currency), Ether, as well as The developing world stands to benefit smart contracts (see below). “Smart con- most dramatically from creative applica- tracts” are not actually smart, nor are they tions of decentralizing tools and necessarily contracts in a legal sense. They economies. This essay explores possible are just executable program objects on ways Ethereum-facilitated technologies certain blockchains that support them, can shape global development. We focus like Ethereum. A blockchain is a distrib- on three core applications of blockchain- uted ledger that enables tamper-proof, enabled solutions: peer-to-peer smart secure recording of transactions, collected 10 innovations / Blockchain for Global Development Downloaded from http://direct.mit.edu/itgg/article-pdf/12/1-2/10/705255/inov_a_00263.pdf by guest on 30 September 2021 into “blocks” of data, between partici- could facilitate widespread decentraliza- pants on a decentralized, peer-to-peer tion, and thereby help us to address sys- network. Transactions and blocks are val- temic imbalances and bring about a more idated by the parties involved and do not equitable distribution of information and require a centralized authority to attest to resources. Proponents of blockchain the data or approve the value transfer, technology aspire to enable distributed which can reduce cost and frictional cooperation between strangers on a glob- delays in every interaction. al scale by way of mechanisms that auto- In the context of the Ethereum mate trust; the question is, how might blockchain, decentralization is both a that become a reality? goal and a process, as well as an architec- ture. The word “decentralization” refers SOCIAL CONSTRUCTION OF broadly to the dispersal of component BLOCKCHAIN TECHNOLOGY network nodes, data, computational activities, and developers across an open- As with all new technologies, blockchain source, peer-to-peer network; block- is not a panacea, nor should it be imple- chains are not controlled by any central mented without careful consideration of infrastructure, and no one party controls the context and an evaluation of previous the data or the network. In fact, it is near- interventions within that context. We ly impossible for a minority set of actors examine Ethereum’s possible impact on the network to improperly manipulate from the perspective of the social con- the data or the programs on a decentral- struction of technology, drawing from ized platform like Ethereum. These the work of sociologists and organiza- twinned capabilities—automation and tional theorists. When we discuss the adaptability, security and configurable social construction of technology, we transparency, peer-to-peer openness and refer to an iterative social process in greater individual control—all arguably which individuals and collectives use a make Ethereum the first technology that technology, observe its intended and ABOUT THE AUTHORS Joseph Lubin is a Co-founder of the blockchain computing platform Ethereum and the Founder of Consensus Systems (ConsenSys), a blockchain venture studio. ConsenSys is one of the largest and fastest-growing companies in the blockchain technology space, building develop- er tools, decentralized applications, and solutions for enterprises and governments that har- ness the power of Ethereum. Lubin graduated from Princeton University with a degree in elec- trical engineering and computer science. Mally Anderson is Wordsmith and Editor-in-Chief of Cellarius, a blockchain-based transmedia storytelling project at ConsenSys. She is also a cofounder of ConsenSys Research. She previ- ously worked as an editor at Penguin Press and is a graduate of Vassar College. Bobbi Thomason is the Head of Research at ConsenSys. She is on the faculty of the Wharton School of the University of Pennsylvania and has worked as a researcher at Harvard Business School and Harvard Kennedy School. 2018 © Joseph Lubin, Mally Anderson, Bobbi Thomason innovations / volume 12, number 1/2 11 Downloaded from http://direct.mit.edu/itgg/article-pdf/12/1-2/10/705255/inov_a_00263.pdf by guest on 30 September 2021 Joseph Lubin, Mally Anderson, and Bobbi Thomason unintended consequences, and then build gathering critical resources early on, new technologies. which has proven true in the first few Scholars have concluded from such years of Ethereum’s development. studies that technologies cannot guaran- However, it also means that the assump- tee a definitive impact, even when they tions guiding these initial projects can are built with specific intentions. This solidify into assumptions about the entire matters because it offers space to inquire ecosystem. This can be a drawback, as the into how individuals, organizations, and problems an enterprise is trying to solve societies interact with technologies, and are very different from those faced by vul- with each other. In the context of global nerable populations, where access and development, this means that, in order for inclusion usually are far from guaranteed, new technologies to empower all citizens information asymmetry is rampant, and instead of perpetuating global hierarchies power dynamics are uneven, although and historical concentrations of power, there may be some common elements in we must be vigilant about how and where the solutions. they are implemented. The challenge of the digital divide— We are in a particularly critical the differential access and ability of indi- moment for considering these questions. viduals, communities, and countries to Blockchain technology is less than a use information and communications decade old: Satoshi Nakamoto released technologies and the socioeconomic and the Bitcoin white paper in 2008, and political inequalities that result—is partic- Vitalik Buterin published the Ethereum ularly urgent during the selection period white paper in 2013. The development of of a new technology. Failing to address blockchain software protocols and appli- these imbalances early on can exacerbate cations that enable their decentralization an already wide gap. The success of the is still very much in progress. Blockchain blockchain ecosystem and being able to in 2018 is entering a critical selection deliver on the promise of decentralization phase, in which it may evolve from a is as much a question of inclusion as one fringe technology used by a small group of effective protocol development and of enthusiasts trading cryptocurrencies usability. into a truly public and global platform. Social dynamics shape the adoption, THE POTENTIAL OF SMART implementation, use, and meaning of a CONTRACTS technology during the so-called selection phase, which is the early period of ecosys- Many great minds and high-impact tem development in which ever greater organizations around the globe already numbers of users adopt a new technolo- recognize the potential of the Ethereum gy.1. The conventions, habits, and struc- blockchain and decentralization to tures that emerge during this selection increase access, streamline processes, and period for blockchain are likely to deter- enfranchise global citizens. Much of the mine its future success as a social tool for attention in the ecosystem’s early days has facilitating decentralization. focused on financial inclusion, or “bank- The social construction of a new tech- ing the unbanked,” which refers to the at nology often begins with enterprise proj- least two billion of the world’s population ects developing and testing a tool. who do not have access to the traditional Gaining traction around innovation financial system. The thinking is that, requires funding, and this dynamic can be with accessible, secure digital identities, useful in accelerating development and lower transaction costs, and cheaper 12 innovations / Blockchain for Global Development Downloaded from http://direct.mit.edu/itgg/article-pdf/12/1-2/10/705255/inov_a_00263.pdf by guest on 30 September 2021 Blockchain for Global Development remittances, the barrier to entry around community.3. global financial networks will be lower Whereas