It is hard to predict how an emerging technology will be used, and what impact it will have on us, on our cultures, societies, institutions, practices. Few, if any foresaw the impact computers and digital networks (Bush 1945), or the types of policy, and regulatory challenges electronic communication technologies brought forward (de Sola Pool 1983). Yet, enduring regulatory, social or economic crises (such as the collapse of the music market due to the emergence of p2p file sharing, or the collapse of online privacy due to ubiquitous online state surveillance and commercial dataveillance) should warn us that without the early engagement of scientific and policy research, the unexpected, often undesirable consequences of rapid technological developments cannot be addressed, let alone mitigated.
Learning from these recent mistakes, this project defined three interlocking research questions (RQs) to study the diffusion of blockchain technology in our societies, and define policy tools to address their potential disruptive effects.
- RQ1: What internal factors contribute to the success of a blockchain application? In order to understand how blockchain technology may affect the wider social, economic, political, cultural domains it penetrates, we first need to understand what it is: how it is internally governed, and how the different social, political, technological, formal and informal governance layers construct the techno-social assemblage we identify as a particular blockchain application (Epstein, Katzenbach, and Musiani 2016; Hofmann, Katzenbach, and Gollatz 2016; Mueller 2010; Musiani et al. 2016). There is a huge degree of variance among the countless blockchain applications. Blockchain implementations differ in the technical characteristics of the technology, in the composition of involved stakeholders, in their governance, and last, but not least, in their performance and success. These different aspects are usually closely related and depend upon each other. Particular aspects of a technology, such as openness, or decentralization, shape its social layers of governance, enabling, for example, novel, bottom-up, decentralized, deliberative, consensual forms of self-government (Davidson, De Filippi, and Potts 2016). On the other hand, the social governance layers may clash and ultimately override the technological fundamentals (De Filippi and Loveluck 2016). Past studies suggest that the ultimate success or the failure of a technology depends on the compatibility of the technological design with the social, political, cultural contexts in which the technology is being developed (Bijker et al. 2012; Bodó 2014c; De Filippi and Loveluck 2016; MacKenzie and Wajcman 1999). This research question addresses the intrinsic characteristics, internal governance structures of four different blockchain applications, with the aim to catalogue, describe, and compare them from the perspective of their potential impact.
- RQ2: How does society adopt blockchain? Most blockchain commentators stress the disruptive potential of the technology. Some, especially in the techno-libertarian, techno-utopian, techno-solutionist communities (Barbrook and Cameron 1995; Levy 1984; Morozov 2014) go as far as to proclaim the end of the State, and the end of banks, and the radical transformation of any- and every human institution, process, and organization that, lacking a better alternative, involves trusted middlemen (Davidson et al. 2016; Tapscott and Tapscott 2016). While many of such predictions fall into the category of self-serving (if not self-fulfilling) hype, and it is highly unlikely that the State will collapse anytime soon, one should not dismiss claims on the disruptive potential of the blockchain technology without serious scrutiny. Especially, because one driver of this disruptive potential is the consensus about such potential.
In addition to the intrinsic qualities of the technology, explored under RQ1, the path of technology diffusion is shaped by how various stakeholders in a social domain understand and conceptualize the risks and promises of the new technology (Rogers 1995). This collaborative meaning making process takes place in public debates, specialized discourses in the domains of science, policy, business, and is reflected in various documents such as business plans, strategy papers, white papers and reports. Through the analysis of these discussions, we can (1) understand how key societal actors, including incumbents, outsider-disruptors, regulators, commentators, laymen, academics assess and adapt to the technology, when it appears in their immediate environments; (2) trace what kind of consensus is emerging around the use of the technology; (3) map the conflicts around the diffusion, and study the effectiveness of proposed resolutions; (4) analyse the strategies of adoption, resistance, avoidance; and (5) draw up the (discursive, political, institutional) networks that shape the consensus building and adoption process.
- RQ1: How to regulate blockchain? Due to its design, blockchain technology, especially its open variant can pose major regulatory challenges. The rise of blockchain, for example is in part attributable to the fact that it enabled users to trade drugs on the infamous and now defunct illegal online drug marketplace Silk Road (Christin 2013; Soska and Christin 2015). In fact, much of the innovation in the blockchain domain hopes to exploit the lack of regulation and enforcement, and at least a part of the technology development efforts is dedicated to maintain such regulatory immunity.
Blockchain is not the first digital technology believed to be immune to regulatory interference (Barlow 1996; Lessig 1999). Yet, few, if any could maintain a complete isolation from pre-existing, or newly devised regulatory frameworks. Even the most advanced, decentralized protocols, specifically engineered to reduce control to a minimum, such as P2P file sharing technologies, and privacy enhancing technologies like Tor (Bodó 2014b) are struggling with ongoing, not perfectly ineffective control efforts by third parties and regulators. So the question is not so much whether blockchain is immune to regulation, but rather: (1) what are the most pressing regulatory challenges, (2) how to balance them, and (3) what the best ways are to achieve that balance. The early engagement of policy with blockchain technology is necessary to avoid belated or misguided policy responses, which in the past resulted in regulatory stalemates (in the case of online copyright enforcement), or outright regulatory failures (in the case of the protection of online privacy).
These three research questions form a closely interrelated framework. The governance of the technology (RQ1) may define the success of its diffusion (RQ2), while the particular social domain may define which governance model is the most appropriate for that field (for instance, finance may more easily adopt permissioned blockchains maintained by professional business organisations, instead of open blockchains developed by open source communities). As blockchain penetrates various social domains (RQ2), we can expect a number of proactive and reactive regulatory responses (RQ3). A reactive policy is shaped by the particularities of the technology and its governance (RQ1), and by the particularities of the social domain (RQ2). Proactive policy hopes to shape either the technology, or the processes of adoption, or both.