The theoretical promise of blockchain technology is truly extraordinary: a peer-to-peer distributed immutable ledger that could revolutionize economies, societies, and even our daily lives. But what if blockchain technology is not as decentralized as people think? What are the ramifications if, in reality, a blockchain’s core decisions are actually influenced by small groups of people or corporations?
This short article seeks to answer that question, by demonstrating that decentralized public blockchains are only as immutable as the decentralization of their governance. Moreover, the announcement of Libra, Facebook’s new permissioned blockchain, shows a growing trend of centralized control around decentralized technologies. Libra is intended to run on highly distributed technology, but will be governed by, and therefore could be arguably controlled by, a highly centralized group of billion-dollar corporations.
Accordingly, this article exposes the ways in which blockchain centralization is leaving important decisions to small groups of people or corporations. These blockchain “agents of influence” have more power than many blockchain proponents acknowledge. Whenever human decision-making processes are in effect, the possibility of bias, conflicts of interest, and other ethical concerns will arise. Ironically, it is exactly this type of flawed human process that the blockchain was designed to solve.
This article therefore argues that as states design laws to regulate blockchain technology, they should consider adding ethical obligations to combat the problems inherent whenever small groups of people make influential decisions. By adopting ethical guidelines at this early stage, while the technology is still evolving, states and blockchain enthusiasts may abate public fears of blockchain technology and prevent larger ethical crises from developing down the road.
21 N.C.J.L & Tech 1 (2019).