Blockchain, the technology underpinning bitcoin, has given partisans of the libertarian movement unlooked for backing. This technology and its offshoots will soon give rise to a number of solutions, over and above cryptocurrencies. Surely we are at the dawn of an economic revolution? What might its consequences and implications be? Who would use these applications and lay down the legal framework that would govern these blockchain solutions? These are a few examples of some of the questions that we ought to be asking ourselves.
The start of a revolution?
Over the last few months, a profusion of articles, reports and other presentations have come out on this fascinating new blockchain technology. Its best ambassador is none other than the bitcoin which has now reached highs that would have been unimaginable a few years ago, with one bitcoin at the time of writing equalling about 15,000 USD. It is often said that this technology could spark a complete revolution in many sectors of economic activity, just as the internet did for all business activities. What is more, it could even take the very way our modern society is structured and turn it on its head. However, going beyond the purely technical workings of blockchain, which are difficult to explain because they are so complicated, nobody is raising questions about some of the implication of its ever-widening spread. Blockchain was developed as the result of a venture driven by libertarian ideas, with the underlying idea, initially, of side-lining intermediaries, such as central banks and even some government bodies. Might this decentralised system lead to a partial withdrawal of governments and their ancillary institutions from the role of intermediary?
Could blockchain become an instrument to serve libertarianism?
Blockchain technology is an innovation that operates in a decentralised way to make permanent records of transactions, such that they cannot be deleted. Each transaction has an encrypted block, containing one or more transactions and the data relating to them. These blocks are recorded in a digital blockchain, each of which has been approved by the group. Before a block can be added, each node in the network must validate and approve it. What is more, the data stored in a blockchain can never be deleted.
Blockchain could therefore be described as a sort of accounting general ledger or unchanging register of transactions that stores blocks of data shared on a network of computer nodes. This is often seen as having the merit of simplifying transactions, increasing transparency, reducing costs and reinforcing reliability. However, the most fascinating aspect of blockchain is perhaps the way it can do away with the intermediary in dealings between parties to a transaction. Parties to a transaction who do not necessarily know each other can deal with each other, without supervision, with no intermediary and with no centralised third party. This is a totally new way of sharing value, money, information or contracting securely for ownership rights, while at the same time saving on administrative formalities.