Blockchain and the new social contract
Don Tapscott, Executive Chairman of The Blockchain Research Institute is somewhat of a visionary. Before Google was even invented, he saw the profound affect information technology would have on business and society.
He wrote about it in the best-selling, seminal book The Digital Economy. These days, he has his sights set on the next technological revolution — Blockchain. Last month, Tapscott addressed the European Business Forum, an annual Thinkers50 event. This year’s conference examined the role business plays in making a positive impact and a keynote from Tapscott on the new technology agenda set the tone for the two-day programme.
Blockchain, for those of you who aren’t familiar, is a decentralised, highly encrypted, global distribution ledger. You may have heard of Bitcoin, well blockchain is the foundation cryptocurrency is built on. It’s not the easiest concept to wrap your head around, so here is an explanatory video to help visualise what this revolutionary network of cryptography does.
The second era of the internet
At the moment our current digital ecosystem depends on intermediaries who take a cut to handle information, data or any other digital assets. We trust bankers to handle our money, bureaucrats to help administrate government policy and a middle man (generally) to facilitate the exchange of goods and services. This model can leave individuals out of pocket or at risk of unwittingly giving up their privacy rights.
“The most profound change blockchain will bring is how we exchange trust with our financial institutions, our governments, our media and with one another.”
For example, overseas contract workers can be charged as much as a 20% fee by a middle man to send money back to their home to their families; a musician who releases a new album only gets a small fraction of money from digital downloads. The cost of trusting someone to handle your money or your intellectual property doesn’t have to be financial, it can be as simple as signing away privacy rights. Facebook, for example, takes your digital identity in exchange for participating on their platform and they earn money by selling on your personal data to third parties. Personal data that pieces together your digital identity which you have no jurisdiction over.
The most profound change blockchain will bring is how we exchange trust with our financial institutions, our governments, our media and with one another. In the future, will there even be a need for intermediaries to facilitate value exchange?
Blockchain and the new social contract
Blockchain technology would make it possible to cut out the middle man entirely, providing a direct, peer-to-peer value exchange: assets, intellectual property, money, supply chains and even civic rights like an electoral system are all on the table. The digital revolution that is underway is the shift away from an internet that gives open access to information to an internet that gives open access to value. Trust, which is something that has been broken in the old era, needs to be addressed.
This paradigm shift would, according to Tapscott, require a new social contract if it is to be used to bring business, government and civic society closer to the best versions of themselves. Tapscott suggests what this new social contract could look like. He’s published a new White Paper, A Declaration of Interdependence and it calls upon business, government, civic society, and the fourth estate to come together to make good the massive disruptions of global market forces in recent years.
“In the future, will there even be a need for intermediaries to facilitate value exchange?”
Business as a force for good
One of the more interesting points Tapscott made illustrated was the strides that carbon trading has made in protecting some of the most important ecosystems the planet needs for a resilient biosphere. It would take business innovation at scale to enable each global citizen to buy carbon on their own behalf in a straight peer-to-peer exchange, rather than it becoming an exclusive the domain of monolithic corporations and the exorbitantly wealthy. Businesses could use blockchain to account for fairer practice in their supply chains, this brought to mind De Beers who, through mounting pressure, are implementing a blockchain initiative. It is a transparent ledger that accounts for a clean supply chain, reducing the risk of “blood diamonds” cropping up in the products they sell.
The most radical proposition Tapscott made to a room full of international businesswomen and men was how they could lead in this new era. He turned our attention to the natural world and used “murmuration” as analogy to describe the trust inherent in the complexities of movement starlings use when they flock together to chase away a natural predator, such as a hawk. The analogy also describes leadership as collectively shared.
This natural phenomenon was a metaphor for a new kind of leadership that took on the values of caring for one another in the midst of changes and flows of direction. With the new era of the internet is a letting go or a softening of the values that have underpinned new technology and to rest instead on a “trust protocal” seen in the natural world. “Move fast and break things” (Facebook) or “Big bold bets” (Uber) are no longer relevant ways of leading in digital society that trades value and trust.
If business is to be a force for good, then its purpose should be knitted into a new social contract that builds trust and also benefits more than just a few.