Keynote at UN on blockchains - transcript
Blockchain Technology and Transformation in the Face of a Climate Emergency
Professor Jem Bendell
Thursday, 25 October 2018
The text of the opening Keynote Speech at the UN Blockchains for Sustainable Development Session at the World Investment Forum 2018, UNCTAD, Geneva, October 24th 2018. Delivered in the Human Rights room to 700 attendees, in the European UN HQ.
What a difference a few years makes. In 2012 I was in Davos, for the World Economic Forum. In the conference corridors, wide eyed and talking excitedly about the need for us to create new digital currencies and use blockchains.
I remember being looked at like a lunatic. Even by the tech entrepreneurs! And here we are, 6 years later at the United Nations. I might still seem a bit of a lunatic but at least I’ve got a bigger crowd. And a smarter one at that.
In those intervening years, billions in investment has been secured, indicating the potential some see in blockchains and distributed ledgers.
Mainstream media has also got in the on the act. One week they tell us blockchain will save the world. And the next that it will destroy the world. Never, in the history of humanity have people got so animated about something as exciting as a type of database.
OK, so blockchains are a bit more than a type of database. But I emphasise the simplicity of the technology here because I believe it’s not actually the technology that will deliver net positive outcomes for humanity.
It never is. That’s why this session is useful. So we can discuss intentions and contexts. It is why I’m pleased my University is involved in co-organising the session, and grateful to the Blockchain Charity Foundation for supporting our work and being here today. It is impressive that UNCTAD have taken the initiative to provide member states and others the opportunity to learn more about the pros and cons of new technologies.
So let me first cover some basics so that we are all on the same page. A blockchain is a record of data that is comprised of blocks which are added over time from a distributed network of participating computers. It means the data can’t be changed, hacked or lost. Blockchain was invented in 2008 to serve as the transaction ledger of the digital currency called bitcoin. Blockchains support much more than digital currencies now, as they offer immutable records that can be public and enable interoperability. This is interesting many governments that struggle with legacy IT systems that can’t talk to each other. Another function of blockchains that is driving interest is called a smart contract. That is a contract between two parties where a payment can be made automatically when a shipment arrives, or where dividends are paid automatically when profits reach a certain level. The technology moves fast and although we use the term blockchain here today, there are promising post-blockchain systems like holochain, which appear more nimble. But the general promise of all these distributed ledgers is greater data transparency, coordination, and automation.
Today, we will hear a range of examples of how distributed ledgers are being deployed for useful outcomes. One example we will hear of is in Kenya where blockchains are combining with grassroots initiatives to provide some of the poorest in society with new currencies to trade with each other. Another example I like is a cryptocurrency called Stellar that enables payments via chains of credit or, simply, promises, between account holders.
Many useful services have been built on top of these new rails, including non-cash remittances used by microfinance organisations across Africa. As this field is moving so fast, it is great that we will be hearing the latest from our panellists, as well as at the side event by UNRISD this afternoon.
Despite some positive examples, the use of these technologies for everyday applications is still rare. Some say that blockchain-based cryptocurrencies like bitcoin are dangerous to our financial system, our security and the environment. How we can address those concerns is something to discuss. As is the matter of how these technologies could be used to address critical dilemmas facing humanity today.
When exploring these questions it’s helpful to keep an open mind. With any kind of technological advance, we may look at it with a mix of intrigue, wonder, confusion or concern. But let’s not be naïve optimists or blind sceptics about technology. And let’s not be bystanders. Because technology is neither inherently good or bad for humanity. Instead, it needs responsible management to maximise its intended benefits and minimise its unintended drawbacks. That perspective means we can look at blockchain and crypto currencies and seek to guide their development for positive public outcomes. To do that well will require wider stakeholder participation in shaping the direction and governance of this technology.
The Sustainable Development Goals offer one framework on public need. And we will hear of a range of efforts on different SDGs from our panellists. But I’d like to invite us to consider something bolder, more urgent. Although climate change is included in the SDGs, the latest report from the Intergovernmental Panel on Climate Change invites a reprioritisation. It implies that climate change is now a planetary emergency posing an existential threat to humanity. The artist who made this ceiling said he was inspired by a mirage in the Sahel where trees, donkeys and people all appeared to be melting up into the sky. We could take that a dramatic metaphor, in this human rights room, of the human face of climate change. So as our climate spirals away from one friendly to our civilisation, we need to face up to why we have been so incapable of changing our ways, collectively, at scale.
Despite decades of deliberation and initiative, carbon emissions continue to rise. One reason we have not stopped that is because action has always been an add on, not a starting point for our systems of economic organisation. So although it is typical for conversations like ours today to focus on how to improve the current global system, I want to ask us to consider something far bolder. That is the need to transform our economic system – and fast.
So here is the critique – and it’s not a shy one. Currently, stock markets incentivise the maximisation of company growth and profitability. That can encourage firms to manipulate people to consume more, while externalising costs onto society and the environment. But a deeper driver of humanity hitting natural limits is our monetary system, which is based on privately-issued debt. Nearly all electronic deposits are created by banks as interest-bearing loans. For the system to function normally, more of our Earth’s resources must be consumed to generate yields to service those debts. Otherwise, when existing loans are paid off, our money supply would dry up.
This system was OK for a time, and OK in some places. But not now. The climate chaos we face is nature’s answer to our hubris that we could expand forever.
A systemic redesign of our banking and corporate systems is long overdue. Until now, people in senior roles have preferred less awkward explanations of our problems. But now that complacency has become a grave threat to life on Earth. We now know that many self-reinforcing feedbacks have begun to further warm the planet, threatening to take the future out of our hands. So if we don’t wake up from our delusions of what is pragmatic and appropriate, then shame on us.
What to do now then? It means there must be a gateway question for any new technology: how is it going to help us build resilience and reduce harm?
When I look at blockchain technologies and crypto currencies, I therefore look at what opportunities there might be to transcend our self-harming monetary and corporate systems. No less a question is sufficient given our planetary emergency.
So here are some questions that might arise from that starting point. Could we see forms of company financing through digital token sales which don’t necessitate share-price competition and the perpetual growth of corporations? Could we see forms of money that are tied to natural ecosystem maintenance, or issued fairly to people for work of real value? Could blockchains be designed to be as energy efficient as possible? Could they be designed not to enrich speculators or create new monopolies? Could they be designed to enable upgrades driven by the beneficiaries, rather than commercial interests? Could blockchain projects take an integral approach, where the code itself and the internal governance are aligned with sustainable outcomes? In technical terms, the answer is absolutely yes. But sadly these approaches have been marginalised if they do not promise a quick buck.
I will give you one example. Today, in 200 communities around the world, people are swapping goods and services with their neighbours without using any money, using software from the Credit Commons Collective. Because of a handful of volunteers, these communities don’t need to pay a company for an app, don’t see adverts, don’t have their data harvested, and they own their installation of the software. These people, around 30,000 of them, are using very basic software because no one is funding its upgrade. Because there’s no profit in it. So if we want transformative change, we will need a shift in ambition from our philanthropists and aid agencies to one of transformation.
Currently social impact projects using blockchain may be useful but are often based on sub-optimal technologies. As we face an existential climate crisis, it is simply not good enough to base environmental initiatives on systems with code that is toxic for our climate. That is once again a reminder that we need collective leadership to shape blockchain and crypto currencies for significant and scalable public benefit.
So as we discuss the potential of these technologies, let’s remember that any technology is really our knowledge and system for creating things. That depends as much on our intention as it does on any code or gadget. So as we look at the difficult times ahead, our intention for creating things needs, more often, to arise out of our love for humanity and creation. The technology we seek is not some new distributed database. The technology we seek is love.
So, as we hear the contributions in this session, I recommend asking how specific initiatives are empowering people and responding to our planetary emergency. If that is the basis of our conversations here today, then this is a useful gathering indeed. So please don’t hold back.