What blockchain means for democracy in the digital age

This post originally appeared on DemocracyWorks, a blog written by members of the National Democratic Institute (NDI).

Last week, NDI, in partnership with BitFury Group and New America, launched the Blockchain Trust Accelerator, which aims to connect governments with the technical staff and resources needed to pilot blockchain applications to improve governance.

Blockchain — in simple terms, an incorruptible public ledger of data that is stored in a decentralized, fully distributed and interconnected manner — is best known as the technology behind the Bitcoin digital currency. While the future of blockchain technology is still uncertain, some of the main uses of this technology will not even be limited to currency or financial technology.

Blockchain provides an opportunity to securely record the transfer of all assets. Fundamental assets to a democracy, such as identity, votes or social services, can be captured securely and permanently. Trials of blockchain software focused on strengthening democratic accountability are being implemented around the world. The first project of the Blockchain Trust Accelerator was launched in April in the Republic of Georgia, where the government is working with BitFury to create a blockchain-based land ownership database.

Other experiments have occurred elsewhere. In Ukraine, the government is experimenting with a blockchain-based election platform for municipal petitions and advisory votes. Estonia’s e-residents can now use blockchain to automatically validate documents, such as marriage and birth certificates. The Isle of Man government is trialing a blockchain registry to enhance transparency and efficiency in registering certain types of businesses. A Danish political party is using blockchain software to conduct internal voting.

Future projects may seize the opportunity to reduce bureaucratic middlemen, improve the efficiency of social service distribution and the reliability of public records. The use of digital assets can bring new possibilities for participatory budgeting, spending and auditing, and a 'sharing economy' for government. Tracking spending on the blockchain is more transparent and accountable, and can illuminate corruption and rent-seeking behavior by dishonest officials or contractors. Blockchain can also be used to improve the accuracy and speed of citizen monitoring of elections.

It is incumbent on those of us who care about the future of our democracy to actively work with institutions to leverage citizen technology to improve the effectiveness of our representative government.

We should be aware that technological innovations often involve an element of hype and even cyber-utopianism. Blockchain is no exception. As with most technological innovations, there are both positive and negative potential uses. For example, Bitcoin has been used as a platform for transferring illegal financial assets outside the control of governments. Moreover, it is not clear whether all of the potential applications of blockchain will be realized, and recent events such as The DAO and Ethereum have demonstrated that even if blockchain technology represents a huge improvement, the use of this technology is not immune to vulnerabilities.

NDI’s mission includes advocacy for democracy and civic innovation. We live in a period of very rapid socioeconomic and technological change. In contrast, modern democratic institutions have evolved over decades, if not centuries, and are, by their very nature, very slow to reform. In many ways, the gap between democratic performance and citizen expectations is growing. Closing the gap will require more rapid innovation and reform by governments. Blockchain applications could enable more frequent solicitation of citizen input on policy proposals, more secure online voting, and more flexibility in delegating voting rights to others. Organizations like my own, Democracy Earth Foundation, are actively exploring these issues. Only through the optimization of these new processes can we perfect these democratic experiments.

'Disruption' has become a Silicon Valley cliché, not only extremely popular but often a top priority. But disruption in the private sector has very different effects than disruption in the political system. Capital forces may cause markets to adapt more quickly, while complex political institutions are slower to react. Moreover, whereas disruption in markets may involve the loss of some jobs and the creation of some new ones, disruption in politics may lead to political instability, armed conflict, refugee increases and humanitarian crises. The so-called 'Arab Spring' uprisings clearly demonstrated that the difficulty of developing and consolidating new democratic institutions is often much greater than the ability of technology-based citizens to overturn the existing political order.

Technological change and disruption do not automatically guarantee a better, more democratic future. Gone are the days when democratic institutions passively watched technological change from the sidelines. Unless they actively seek to exploit the opportunities offered by new technologies, they risk being overwhelmed by them.

As is often pointed out, 'democracy is not a spectator sport'.