Advocating for Ethics-Driven Regulation for Blockchain Technologies

Blockchain technology can serve as a shared database ledger that tracks assets and transactions with little to no oversight but, in theory, unlimited users. Its potential applications, spanning smart contracts to blockchaining intellectual property, indicate promise for fluid collaborations, efficient remuneration and thorough intellectual property management. However, there are still crucial issues, including privacy, compatibility, liability and jurisdiction that remain undefined. Moreover, because all fields necessitate specialized codes of conduct and ethics, if blockchain technology is expected to make a significant difference in society, then it too, deserves its own field of ethics, like artificial intelligence (AI), nuclear technology, biotechnology, and space exploration. Leading minds across disciplines need to contemplate how this technology can be shaped to have a positive impact, first by examining what this field is capable of doing and its potential consequences. For example, central to the idea of blockchain is the creation of decentralized, leaderless organizations. This begs the question of who is responsible when something goes wrong? Who determines what behavior is allowed? When thinking macroscopically, and into the future, if blockchain technology is anticipated to change the nature of money, how could this affect power dynamics, economies and politics?

From Dolly to Digital Ledgers

In 1996, when Dolly the sheep was successfully cloned, ethical quandaries and slippery slope arguments exploded. Does the prohibition of human cloning, however far in the distant future, comport with human rights in interfering with the right to reproductive privacy and autonomy? Although this is an admittedly extreme comparison, shouldn’t the blockchain field also work toward standardizing guidelines for ethical research? For example, should we consider probing and disclosing security vulnerabilities in a live blockchain smart contract ethical? The Twitter poll prompted by Cornell University researcher Philip Daian found that two-thirds of the respondents answered yes; however, we must remember, such an act could put the life savings of the participants in the blockchain at risk.

Moreover, Blockchain technology is extremely flexible and has evolved rapidly in its various applications. In the healthcare industry alone, the blockchain market was valued at USD 2.12 billion in 2020. In healthcare, the potential to access the input and consultation of specialists across the globe would embody the dream of democratized healthcare and electronic medical records. The architectural concept of a shared digital ledger to disintermediate the sharing of information across ecosystems demands, however, information accuracy, minimized manual breaks in the process and a resolution on the tension between the need for transparency and the desire for privacy. Although the transparency of the shared ledger brings with it the promise of greater integrity and accountability across an ecosystem, with increased trust amongst the participants (in part, based in the immutable nature of the ledgers), and a reduction in counterparty risk, there are still many legitimate reasons why participants may not want to have full visibility across the network, so tailored transparency may need further development.

Be Wary

Given the complexity of technologies emerging on blockchain, one should carefully consider the moral issues that have or could emerge when determining use cases. Moreover, we should not be blinded by the hype of this technology’s potential, namely, the promotion of greater efficiency, security, privacy, integrity and its somewhat anti-authoritarian character, but rather be realistic about exactly what it can deliver. The more gullible among us should be wary of the real potential for harm. The scope of blockchain, which should be regulated to some measure, should ensure a distributed architecture that can maintain the necessary communications and processing power to manage and process all the transacted data. There should be regulating agencies and institutions, insulated from conflict, that provide some degree of supervision in order to prevent, deter, and penalize misuse. While such oversight is arguably directly in breach of the libertarian freedom aimed for by this technology, functionality indisputably requires facilitation of function with rules and regulations, not only based in ethics but also the idealized principles of fluid transactions enabled by this platform technology.

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