Two Sides of a Coin: Blockchain, Ethics and Human Rights

Blockchain is, for many people, still synonymous with cryptocurrencies and financial applications. Yet the features that make blockchain technologies so appealing for asset management and monetary transactions -- transparency, tamper-resistance, efficiency, and smart contracts, to name just a few -- are also useful in areas that have little to do with finance. 

In my day job as a bioethicist, I look for solutions - ranging from the philosophical to the technological - to novel or well-known problems that affect us all. As I read more about the blockchain, I began to realize that it has enormous potential as a tool for the common good. Unfortunately, not much has been written on the connection between blockchain technologies, ethics and human rights. Together with my colleague Max Schmid, I set out to see not only whether blockchain could help good causes, but also whether the lessons from ethics could benefit the blockchain community.

As we started our research into this idea, we came across several examples of blockchain projects being used to advance human rights. In one example, the UN, in partnership with blockchain company Aid:Tech, tracked the flow of refugees through conflict zones. In another, the UN World Food Program provided refugees in Pakistan and Jordan with digital currency only redeemable by the intended individual (blockchain for zero hunger). In fact, Stanford recently released a study of 193 blockchain initiatives aimed at social impact. 

So we were surprised to also find two recent articles by Nobel Laureates Joseph Stiglitz and Paul Krugman, claiming that the whole bitcoin ecosystem is either useless or immoral. Now, these are not unintelligent men. Stiglitz in particular has been a hero of mine since 1997, when he identified knowledge as a global public good. So, what was it about bitcoin that so irked these otherwise brilliant economists? 

Stiglitz (Nobel-winning economist: Authorities will bring down 'hammer' on bitcoin) appears to think that the only real advantage of bitcoin is its secrecy. He further assumed that secrecy must be wanted for nefarious reasons – say, money laundering or hiring hitmen. As bitcoin becomes more mainstream and abuses become the target of regulation, Stiglitz concluded that bitcoin’s added value would be regulated out of existence.  

Writing in the New York Times, Krugman (Bubble, Bubble, Fraud and Trouble) first listed a number of familiar economic doubts about bitcoin: its volatility, the relatively few shops which accept it, and the lack of a guarantor like the gold standard or Federal Reserve. He then compares bitcoin to ‘Benjamins’ or $100-dollar bills: popular with thieves, drug dealers and tax evaders. Bitcoin, he foretells, is a giant bubble that will end in grief, and the sooner it does, the better. But it was the title of an earlier article of his which is relevant for us today. It ran, very simply: ‘Bitcoin is Evil’. 

Technology and ethics

What does it mean to say that a technology is evil? Given Krugman’s arguments, it’s easy to see what he meant: bitcoin is used exclusively for acts which are morally bad; hence, bitcoin is itself evil. As an ethical argument, this is willfully ignorant; you don’t need a Nobel Prize to find examples of blockchain being used for social good. But, interestingly, the underlying thought pattern – that bitcoin is evil because it brings about bad consequences– is an example of a legitimate moral theory known as consequentialism. If Krugman was arguing along consequentialist lines, his error lies in disregarding bitcoin’s positive aspects and in the failure to make the assumption of this ethical framework explicit. 

Intrigued, we started searching the academic databases for ethical frameworks applied to blockchain, but found nothing. Yet we kept finding controversies surrounding certain blockchain use cases which relied implicitly on the ethical frameworks that philosophers have developed over thousands of years. 

Take the debate surrounding the bitcoin cash and gold hard forks. Due to rising transaction volumes and limited block size, those wanting to ensure a timely transaction had to include a sizeable mining fee. Similarly, voting power was increasingly concentrated in a few large pools. These developments meant that some, through greater access to resources, were privileged relative to others – which was one of the issues that bitcoin was supposed to address. The idea that power should be distributed, that one person’s preferences should count for no more nor less than another’s, is known in ethics as equality. It is different in type from the approach we identified in Krugman’s thinking, because it places moral value on the equality of individuals, regardless of whether this will lead to the best consequences. 

Other examples where ethical questions have been raised include the energy usage of the proof-of-work protocol, the nearly complete absence of minorities in the industry, and government attempts to restrict or regulate aspects of blockchain use. 

In each of these cases, the kind of reasoning we are engaged in is essentially ethical. Ethics is the formal study of how to choose the best possible way forward when faced with several options. Perhaps more importantly, when we think about ethics and human rights, we are in a better position to identify the areas where blockchain technologies can be used to make the world a better place. 

Academic ethics is split into four disciplines, from the abstract to the concrete. At one end is descriptive ethics, which tries to describe what people actually think about ethics and how this relates to different cultures and contexts. At a more abstract level, normative ethics deals with what people should or ought to think about ethics, regardless of what people actually think. More abstract still, meta-ethics is the study of ethical concepts themselves; for example, whether intuition is the proper basis for moral arguments, or whether moral facts exist independently of humans. 

Most interesting for us, applied ethics is the application of the other three disciplines to real-world questions. Applied ethics relies on normative principles, and because of this, we need to understand the major ideas in normative ethics.

Normative ethics

Normative ethics has a long history; but only a handful of theories have stood the test of time. These theories seek to establish a framework which can be used to determine whether or not an action is morally right or wrong. To establish this, the theories focus on one or more fundamental principles against which actions are judged.

We already came across one of them earlier. Consequentialism holds that what distinguishes a good from a bad action is its consequences. The best-known version of consequentialism is utilitarianism, which was first developed in its modern form by two eccentric Englishmen in the 18th and 19th centuries.

The first is Jeremy Bentham, who argued that the ethical thing to do is that which produces the greatest happiness for the greatest number. This idea is known as theprinciple of utility. By happiness, Bentham meant the sum total of pleasure, of all forms, minus pain, of any kind. Bentham argued that nothing else matters morally – that whatever else we value, say, honesty or friendship, is only good insofar as it brings about pleasure or reduces pain. 

On this view it doesn’t matter who is experiencing the pleasure or pain; the experience of anyone, king or pauper, is no more or less important than another’s, an idea we might call the principle of equality.  

Bentham thought that the only relevant difference between pleasures are their intensity and duration. In other words, if someone gets more pleasure from pornography, say, than reading Shakespeare, then so much the worse for Shakespeare. It was this aspect of his philosophy that Bentham’s godson, John Stuart Mill, rebelled against. 

Mill proposed that some pleasures were more worthwhile than others; no amount of, say, perverse pleasure from murder, could ever match a higher pleasure such as great literature or coding. 

Utilitarianism is the justification behind such ideas as cost-benefit analysis and medical triage. The theory has its fair share of criticisms. Perhaps the most devastating is the insight that it appears to justify actions which we consider intuitively wrong. From a utilitarian point of view, the trouble with murder, lying, or adultery is that they usually lead to more misery than utility, not that these acts are inherently wrong. If there were no other consequences – which of course there always will be – then a consistent utilitarian should be willing to kill one person to save two others. It also seems to ask too much of us – likely, there would be greater average happiness if we donated our bitcoins – or, like Robin Hood, other people’s bitcoins. 

It is these unsavory conclusions that motivate another normative theory, deontology, which holds that the ultimate ethical principle is duty, rather than utility. Deontology’s most famous proponent is Immanuel Kant, a contemporary of Bentham’s. 

Kant’s philosophy is notoriously hard to follow, but in essence, he argued that as rational creatures, humans have a responsibility, a duty, to act in accordance with autonomous reason, the kind of reason that stems from freedom of the will.

Kant thought that humans’ ability to reason and act freely gives us a unique status, which he called dignity. This concept is all-important to Kant’s philosophy, as he argues that dignity has overriding importance and must be respected, both in ourselves but also in others. 

From this idea of autonomy, Kant derived moral laws. The most famous of these he called the categorical imperative, one form of which states that we must treat others never only as a means to an end, but always also as an end in themselves. In other words, we should never use others against their will, even to bring about some great good, because doing so fails to respect their autonomy and by extension their dignity. 

Now, Kant wasn’t saying that consequences don’t matter. He just thought that where utility and the categorical imperative conflict, the imperative always wins. This leads to some tragic conclusions. Famously, he thought it would be immoral to lie to a would-be murderer about the location of his intended victim.

Deontology’s ultimate principle is duty. Since Kant, many philosophers have accepted this basic idea but produced systems of duties very different from his. The common idea here is that we need some kind of restraint on pure utility maximization, to protect the people and things we value. 

Human rights

One such idea is human rights. The concept here is that the dignity of each human grants them certain rights regardless of who they are or where they were born. This idea, that rights apply to everyone everywhere, is known as the principle of universality.

The actual list of rights produced -- the 1948 Universal Declaration of Human Rights -- was the result of what is probably the largest-ever survey of philosophers, academics and other intellectuals. The entire extant literature, all constitutions, every document of rights, and several hundred eminent thinkers from all over the world were consulted. Remarkably, pretty much everyone involved agreed on the major points, with controversy usually centering on details. 

Human rights are of central importance for us, not only because they are legally binding, but also because they cover many aspects of life for which the blockchain could truly make a difference. 

Philosophically, human rights are based on fundamental principles, themselves derived from dignity. These are participation and inclusion; universality, equality and non-discrimination; inalienability and indivisibility, and accountability.

When rights conflict, governments must weigh the relative importance of different rights claims in a process quite similar to utilitarian calculation. The human rights system therefore features some of the strengths of all the major normative theories – utilitarianism, which focuses on consequences, and deontology focusing on rights and duties, but also virtue ethics, which places emphasis instead on the person or agent, on their character rather than their actions. 

Virtue refers to a set of character traits which, collectively, make for a good person. A virtue is a persistent, reliable, disposition to act and feel a certain, morally positive, way. In other words, a virtue is that which makes someone behave in a characteristically good fashion. Virtue ethics was developed by Plato, Aristotle, Mencius and Confucius; the theories still discussed today are most directly associated with Aristotle.

In my opinion, Aristotle’s key insight is that we can and must train these virtues to acquire them. “Moral virtue comes about as a result of habit,” he wrote in the Nicomachean Ethics. “We become just by doing just acts, temperate by doing temperate acts, brave by doing brave acts.” To do the right thing, we must also practice our virtues until doing the right thing becomes part of us, as automatic as brushing our teeth or driving a car.

Although these theories – utilitarianism, deontology, human rights and virtue ethics – seem very different from each other, they actually share a surprising number of principles. All four frameworks agree on the fundamental importance and equality of each individual. Secondly, they are all universal, in that their principles apply to all humans everywhere. Thirdly, they all acknowledge that utility is important; where rights, duties and virtues don’t prohibit a range of actions, the best option is the one that generates most utility. 

Moreover, human rights, deontology and virtue ethics explicitly recognize the need for some kind of restraint on pure cost-benefit analysis. Even some forms of utilitarianism hold that to maximize utility, it is best to follow certain rules, so we do not end up having to calculate the future too often or making too many mistakes; these rules look very much like the constraints imposed by rights and duties. 

Finally, all four focus on development: human rights reflect the capabilities and conditions necessary for living a full life, such as education, health, a facilitating environment, and security; people who have these conditions are also able to generate more utility, and can more easily practice the virtues. 

These five principles, then – universality, equality, utility, constraints, and development - form the foundation for a framework of ethics in the blockchain industry, because they are supported by all three major normative theories, and because they are backed by the legal and symbolic weight of human rights.

Building such a framework in all its necessary detail will be no small task. We can begin to sketch it together by observing that three principles are fundamental and axiomatic: utility, that is, bringing about as much benefit as possible; and doing so in a way that treats all humans everywhere as having equal moral worth, in other words, universality and equality. But, to avoid exploitation, and in order to respect people as people rather than objects or pawns, we need to have a layer of rights and duties that restrain pure utilitarian reasoning. 

These rights will include human rights, but may include others, because the world is different now from what was happening seventy years ago, and because all fields need specialized professional codes of conduct. Finally, an important focus of actions should be the concepts of virtue and human and environmental development, because this is most likely to bring about utility and respect for rights and duties. 

What might our fledgling framework look like in practice? Something like this:

• First, clarify the issue.
• Then, assess the utility of various options.
• Consider whether the option(s) with the most utility violate the rights of others.
• If the rights in question are not absolute, determine whether the utility is large enough to outweigh them. 
• Choose the option(s) with the highest utility amongst those not constrained or outweighed by rights/duties.
• Wherever possible, focus on development and virtue.

Although this looks simple, each of these steps involves some hard questions. The first stage aims to identify what’s at stake and what’s important in an issue. The second step involves weighing up the costs and benefits of different options. This can only rarely be done in any strict mathematical sense, but often it will be uncontroversial that some options are inferior to others, and often the best way to choose between close options will be to discuss them openly. 

The next steps involve identifying conflicting rights and weighing them; often, different rights will be affected no matter what is done, and then it is the relative importance and degree of impact on rights that will be the deciding factor. Finally, it will often make most sense to prefer those options that contribute to human and environmental development, because investing in humans and the environments they require to develop fully has proven, throughout history, to be the best investment for humanity as a whole.

Of course, many details need to be filled in, but something like this could form the basis for an ethical code of conduct and for a practical normative framework in the blockchain sphere. 

Some examples

We can test the framework by trying it out against some commonly heard criticisms of the blockchain. For example, it’s sometimes claimed that proof-of-work blockchains are unethical because they contribute to environmental degradation. Clarifying the issue, we ask whether the benefits of the proof of work protocol outweigh the costs in energy, but also whether there is a better way to achieve the same end.

To answer the first question, we observe that enabling many more individuals to participate in the global sharing of value and information is one of the greatest benefits we can imagine, because it allows for greater development for more people and very probably outweighs other uses for that energy.

The second question is less obvious. The proof-of-work protocol has led to the rise of mining pools, which may exert excessive influence over future development. At the same time, lots of valuable computing power is going into work that is by definition arbitrary. One way to attack this problem is efficiency gains, such as the Lightning Network and better mining hardware. Another is to repurpose the work done to make it useful; for example, CureCoin utilizes a scheme in which work goes towards modelling protein structure for health research. A third option would be to abandon proof of work entirely, moving to another incentive structure such as proof of stake. Each of these alternatives has to be carefully studied to predict their likely impact. Since the rights of others are not much affected, this issue turns into a utilitarian calculation. 

A second important issue is the relative absence of minorities. Depending on the survey (e.g. Data Shows That Women Are Underrepresented in Blockchain and Crypto), only 7-15% of people in the blockchain industry are female, and fewer still are ethnic minorities. Clarifying the issue, we might ask what the barriers to entry are and what can be done about them. One obvious culprit is discrimination. This can exist in its blatant form, but we suspect that unconscious bias is the more common. This makes it all the more important to pay attention to these dynamics when considering new ventures or hires, especially because this is an area where people’s rights to equality are at stake. Another factor is the relative disadvantage of women and minorities in gaining the necessary tech skills. Here, many more initiatives like the MIT Media Lab’s bootcamps for women and minorities and scholarships to attend conferences will be necessary. This is an issue where utilitarian and deontological analysis agree: by respecting the equal rights of women and minorities, the available talent pool will massively expand.

Finally, a key issue is regulation in the blockchain sphere. Clarifying this issue, we can ask first whether it makes sense to have any regulation at all, and if so, how much and what kind. 

Although this is a huge and thorny issue we can begin by observing that some countries and even cities are beginning to put in place rudimentary regulations anyway. China for example has shut down its domestic exchanges and banned ICOs. On the other hand, Japan and Switzerland have managed to attract blockchain businesses due to a favorable regulatory environment. New York issued its BitLicense, and Delaware and Estonia allow you to register blockchain companies there remotely.

Secondly, we consider that the emerging regulations ought to benefit everyone everywhere rather than reflecting the interests of certain groups. We know, for instance, that market cornering can be rampant, and that very large financial players can have a disproportionate impact. There will only be regulations that work for everyone if they are made open to the community to draft and comment on. Thus, there is an ethical argument that regulatory bodies should include and welcome the participation of the affected parts of the community when drafting regulations. 

However, since this is not always likely to happen, another route lies in self-regulation. Many areas of academic research, for example, and arguably the Internet itself, are regulated primarily by representatives of the relevant communities. These bodies have put in place codes of conduct and professional ethics which are not backed up by threats of force, but nevertheless are reasonably successful. Making a concentrated effort here could help reduce the perception of need for outside regulation.

Blockchain for ethics and human rights

So far we have focused on the application of ethics and human rights to blockchain. However, the relationship goes both ways, and the other side of the coin - the application of blockchain to ethical and human rights causes – is perhaps even more important. 

In 2015, 193 of the world’s 195 countries adopted the UN’s Sustainable Development Goals.

These 17 goals reflect some of the most pressing humanitarian and ethical problems globally. 

Strategies to achieve these goals involve the transfer and distribution of large amounts of value and information, the tracking and identification of vast numbers of people, data and goods, and the coordination of efforts and resources between the public, private and civil sectors, all of which requires trust, transparency and accountability. What’s more, these efforts are chronically understaffed and underfunded when compared to the magnitude of the problems they are designed to address.

In addition, lasting development requires many affordances of institutions and infrastructure which we take for granted, but are often lacking where they are needed most. They include access to financial services, land and title deeds, effective legal systems and documents such as birth and marriage certificates, health records and proof of identity.

In this context, the potential of blockchain technologies to enable secure, fast, reliable and traceable data and value transaction is enormously helpful.  

For example, the UN World Food Programme, which feeds more than 100 million people across 80 countries, has already saved millions of dollars in bank transfers. Platforms such as BitSpark and BitPesa significantly increase the efficiency of remittances, which form a vital part of the economy in countries suffering from political instability or runaway inflation. And in the world of conservation, the International Union for Conservation of Nature is planning to use blockchain technologies to reduce overhead costs, improve transparency and enable direct donations to individual projects (Fair Finance for Effective Conservation).

Other projects use the blockchain to trace the supply chain and origins of products. Everledger follows the progress of diamonds from the mines to the end customer, helping to prevent the exploitation inherent in the blood diamond trade. Provenance tracks the propagation of fish and other products through the supply chain, enabling scrutiny of sustainability claims and public health surveillance of contamination. Wal-Mart (Walmart implements IBM's blockchain for food traceability) and Maersk (Walmart implements IBM's blockchain for food traceability) are looking to establish similar programs.

The UN and ID2020 aim to provide digital identities to refugees and others in need, a fundamental prerequisite for many societal functions. In Ghana, Bitland has teamed up with the government to provide digital records of land and title deeds, ensuring a permanent, auditable record. In partnership with the South African government, Project Amply has built a digital identity and subsidy management system on the blockchain for schoolchildren. 

Increasingly, science and medicine are looking towards blockchain-enabled solutions (for example, Blockchain technology for improving clinical research quality). The sharing of sensitive, valuable and identifiable medical and scientific data has always been problematic. Blockchain technologies could enable the secure data sharing and aggregation at a level never before seen, thus facilitating the progress of medicine. The same is true of possibilities in post-market surveillance of new drugs and medical devices. Initiatives such as SolarCoin look to incentivize the production of social goods, in this case solar energy. 

Although the technology is still less than a decade old, these examples give a taste of the potential impact blockchain technologies could have in making the world a better place. But like all technologies, its impact depends on how it is used. Therefore, the time is ripe to begin reflection and discussion of the best ways to ensure that its potential for good is realized. 

About the Authors

Sebastian Porsdam Mann is a bioethicist at the Universities of Oxford and Copenhagen. He has a bachelor’s and a PhD in philosophy, neuroscience and neuroethics from the University of Cambridge and has previously worked as a researcher at Harvard Medical School. 

Max Schmid holds undergraduate and graduate degrees from Munich and IE Business Schools. He currently runs A&BC Consulting (anbc.live), which he and Mann set up together.