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Blockchain expertise may assist globalization work for everybody – Quartz

Technological

Blockchain expertise may assist globalization work for everybody – Quartz

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Last month, the world’s leading companies from business, government, media and technology made a pilgrimage to Davos, Switzerland, for the annual World Economic Forum. The serene mountains surrounding the city were in sharp contrast to the swirling populist storm that is now changing geopolitics. Indeed, the long-cherished goal of the event – to improve the state of the world by promoting open borders, global cooperation and free trade – stood in stark contrast to the nativism and isolationism that emerged during Brexit and the election of US President Donald Trump.

The new right-wing populists have many bogeys – immigrants, refugees and, in their opinion, corrupt and ineffective international institutions, to name a few. But when you look past these scapegoats, a troubling reality emerges. Not trade or immigration, but rapid technological progress – charged by globalization – has left many people behind. The truth is, the internet success story is complicated at best. It has democratized access to information and changed the way we communicate, but it has also eroded privacy. It spurred the creation of Silicon Valley juggernauts, but did not create widespread wealth.

The challenge ahead of us is to make globalization (and with it technology) usable for everyone and not just for the privileged few. The blockchain, a decentralized ledger that verifies and permanently records transactions, can help us achieve this goal. Indeed, the democratizing potential of this technology could be the key to ushering in a new era of globalism.

The blockchain was developed as a basic technology for cryptocurrencies such as Bitcoin. It is able to transport not only information, but also everything valuable. Money, titles, deeds, votes and intellectual property can be moved, stored and managed securely and privately, as trust is not built through powerful intermediaries such as banks and governments, but through consensus, cryptography, collaboration and clever code.

The decentralized blockchain strengthens individuals and local communities, creates opportunities and enables connections across borders without users having to forego individual autonomy or privacy. Individuals can own their own identities and personal information, conduct transactions, and create and share peer-to-peer value.

If blockchain becomes more widespread, billions of marginalized people will have better opportunities to enter the global economy through financial inclusion and strengthening of property rights. The wealth of the world’s poorest will no longer be tied to the cash barriers of the black economy, as more people have the ability to make payments, store assets and access credit around the world. Rather than trying to solve the problem of growing social inequality through redistribution alone, we can change the way wealth – and opportunity – is pre-distributed in the first place. Farmers can join global supply chains. Musicians can be appropriately compensated for the content they create. We can build a real sharing economy in which the value creators actually share in the wealth that these new platforms create. The list goes on.

In this regard, the promise of blockchain technology is encouraging. It includes significantly reduced transaction costs and broader financial access for individuals and businesses; increased financial and social stability through greater economic participation; stronger economic activity; and improving adequate transparency, security and privacy. Among other things, these transformations could usher in a happy age of entrepreneurship, as small businesses anywhere in the world can have all the capabilities of large companies without the corresponding liabilities such as dampening bureaucracy or legacy culture.

At the same time, the blockchain is not a panacea for the world’s problems. And, of course, we see the irony in postulating that this new technology could help us address our social and economic problems when previous technologies fail. Ultimately, technology alone does not create wealth – people do. Leadership and responsibility will be required to ensure that blockchain technology delivers on its positive promise. We strongly believe that this requires an ongoing commitment to global collaboration, not a departure.

Today, more than ever, we need global institutions and organizations like the World Economic Forum to work together to secure this brighter future. Overall, our organization consists of volunteers from different backgrounds who are united by the common goal of steering this important global resource in the right direction. We believe that all of the communities we represent must take positive action so that blockchain technology can constructively influence the world, with a sense of urgency. In the past, policy makers and the business community have treated goals such as financial inclusion or enabling greater decision-making over personal information about individuals as “good to have” rather than “must have”.

That is foolishness. Without a concerted and focused effort, this powerful new technology risks failing to deliver on its promise. Old paradigm leaders might try to stop it. Governments can try to crush them. Perhaps the greatest risk is that technology will never make it to prime time as competing fiefs within the nascent blockchain community drive their own narrow self-interest at the expense of the entire ecosystem. None of this should stop us from pursuing the technology, but rather highlight the challenges we need to plan and overcome – through inclusive, performance-based, bottom-up multi-stakeholder governance.

The members of our group intend to bring this focus into our work together and reach out to others in our respective communities to join us. The world is about to change, and we intend to do our part to ensure that our contribution to that change is positive. The time has come and we need your help. Please join us.

The following signatories are members of the World Economic Forum’s Global Futures Council on Blockchain, which was officially announced at the Forum’s Signal event in Davos, Switzerland, in January 2017. We are a diverse group of stakeholders that includes regulators, business people, investors and academics, entrepreneurs and representatives of open source communities.

  • Alex Tapscott, CEO, Northwest Passage Ventures; Co-author of Blockchain Revolution
  • Karen Gifford, Special Adviser on Global Policy and Regulatory Affairs, Ripple
  • Thomas Hendrik Ilves, former President of Estonia
  • Jamie Smith, Global Chief Communications and Marketing Officer, The Bitfury Group
  • Brian Behlendorf, Executive Director, Hyperledger
  • Tim Baker, Global Head of Innovation, Thompson Reuters
  • Elizabeth Rossiello, CEO, Bitpesa
  • Jen Zhu Scott, Radian Partner
  • Primavera de Filippi, Research Fellow at the Berkman Center for Internet and Society, Harvard University
  • Osman Sultan, CEO, Du.ae
  • Simon Taylor, Co-Founder, Director of Blockchain at 11: FS
  • Dr. Carsten Stoecker, innogy Consulting GmbH
  • Meltem Demirors, Digital Currency Group
  • Jesse McWaters, Director of Financial Innovation, World Economic Forum
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