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Why it’s time to start talking about blockchain ethics

Blockchain technology is changing the nature of money and organizations. We should probably start pondering the potential consequences.
October 10, 2019
Blocks and scales of justice
Blocks and scales of justiceMs. Tech; Scales: Chris Potter; Flickr

At first glance, the word “ethics” may seem out of place next to “blockchain.” After all, the world of cryptocurrency may be most famous for its many frauds and scams.

But according to a small contingent of academics, not only does it makes sense to discuss “blockchain ethics”—it is necessary.

If blockchain technology can be reasonably expected to make a significant difference in society, then it deserves its own field of ethics, just like biotechnology, artificial intelligence, and nuclear technology, argues Rhys Lindmark, head of community and long-term societal impact at MIT’s Digital Currency Initiative. 

Lindmark spoke October 6 at the group’s Cryptoeconomic Systems Summit, a gathering of blockchain developers, economists, financial engineers, lawyers, and others whose academic disciplines are relevant to the technology. The summit was an attempt to lay the foundations for a new academic field focused on the many interdisciplinary aspects of blockchain development. Blockchain ethics might be considered a subfield of that. Lindmark described it as “a group of people focused on the question: How we can positively shape the development of this technology?”

Blockchain technology is still mostly a niche interest; the value of the cryptocurrency market is minuscule compared with the value of traditional global investment markets. It doesn’t have much influence, if any, in the global financial system—rather, cryptocurrencies are mostly seen as a way to profit by speculating on their volatile prices. But that may be changing. Big mainstream institutions like Fidelity Investments and Intercontinental Exchange (which owns the New York Stock Exchange) have embraced the technology. Facebook wants to launch its own global digital currency. Central banks may be close to getting into the business too.

Lindmark said that like other “tech ethics” fields, the field of blockchain ethics should examine what the technology is capable of doing, and ponder the potential consequences. For instance, blockchains make it possible to create leaderless, “decentralized” organizations. Does that mean no one is responsible if something goes wrong? In public blockchains like Bitcoin, the network’s shared software rules are supposed to automatically sort out what behavior is allowed. So if a user exploits the protocol for profit without breaking its rules, is that unethical? Meanwhile, global digital currencies like what Facebook is proposing might change the nature of money. How might that change politics and power dynamics?

A concrete, near-term concern pertains to blockchain research. Much like biotechnologies and nanotechnologies, blockchains and cryptocurrencies introduce a new class of “ethical risks” for researchers, said Quinn DuPont, an assistant professor at University College Dublin. 

The blockchain field should work toward standardizing guidelines for ethical research, he said, because studying crypto networks—for instance, probing and disclosing security vulnerabilities—can put other people’s money at risk. One of the slides from DuPont’s talk at the MIT conference featured a Twitter poll posted last year by Philip Daian, a researcher at Cornell University’s Initiative for Cryptocurrencies and Contracts. Daian asked if it’s ethical to assign students to find a vulnerability in a live blockchain smart contract. Two-thirds of the 1,262 respondents said yes.

Traditional computer security research faces a similar quandary. But in proceeding with research like this on a blockchain, “you’re not just breaking into a social network or some other system which may be relatively important,” DuPont said. “You’re literally teaching them how to break into the bank.”

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