Lecture 6: Digital Revolution or Digital Disconnect?

Summary

  • A blockchain is essentially a transaction that occurs between two parties. The transaction is transparent and available within the given database
  • Do blockchains offer a revolutionary power to re-shape the global economy?
  • What are the strengths / limitations to this technology?

Trusting the Internet?

  • Most online transactions still require third-party validation
  • Intermediaries (third parties that are involved in the online transactions) collect personal data, invade privacy for profit and /or national security
  • This results to the issue of immense power for online criminal activity, such as holding data hostage, hacking, identity theft, and scammers

Enter BitCoin

  • Circa 2008: There was a global financial industry crash
  • In response, there was the creation of a cryptocurrency called bitcoin developed by group called Nakamoto. Cryptocurrency is not attached to a specific nation such as the US dollar to America or CAD to Canada
  • BitCoin allows trusted transactions without third parties’ involvement
  • Furthermore, bitcoin was powered by collective self-interests rather than large corporations
  • However, Bitcoin is less interesting than the technology behind it. They rely on blockchain (in other words a global spreadsheet that tracks where the money is processed and how transactions take place). Thus, transactions are recorded in blockchain or global ledger / spreadsheet
  • After all, there are many alternatives to national currency that have not disrupted or threatened the nation

What is Blockchain?

  • Distributed on multiple computers and there is no particular database
  • Public accessibility network and there is no specific organization who has control of blockchain
  • Encrypted every ten minutes based on transactions, resulting to a blockchain for each
  • Furthermore, with blockchain, Bitcoin is limited to a certain amount in the world

Limitations

  • The authors in the reading celebrate the emergence of blockchain / bitcoin technology, however, they fall short of identifying the technology’s limitations
  • Is blockchain just another part of neoliberal logic? Potentially because blockchain is a decentralized system.
  • Is it politics masquerading as technology?
  • Do we really want a permanent record where data cannot be changed or removed?

The fact that blockchain is promoted by investors, venture capitalists and banks should raise some eyebrows

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