This report forms part of a study on blockchain technology conducted by the Foundation for Technology Assessment (TA-SWISS). Its intention is to supplement other technical descriptions and case studies by providing background information. In it, we take a close look at blockchain from both social and historical perspectives. We analyse the circumstances in which it appeared and how it came to be institutionalised, then pose questions regarding the sociological challenges it engenders and the new circumstances it has prompted.
We have taken the approach that blockchain is still in its experimental phase, and that it would therefore be premature to look at any specific repercussions of its development at this stage. We advocate an exploratory investigation of the field. We conducted an extensive analysis of other academic studies and reports published by consulting firms such as McKinsey, Deloitte, KPMG, and PwC as well as studies conducted at the government level in the US, France, the UK, and the EU as well as by international organisations such as the UN. We explored aspects relating to national legal systems and the recommendations made by financial institutions such as the Bank of England and other supervisory authorities such as FINMA. We investigated social behaviours and the cultural aspects of communities as well as internet resources including press archives, email lists, blogs, code repositories such as GitHub, social networks like Reddit and Medium, Wikipedia, and messaging apps such as Telegram. We studied the profiles of leading figures and contributors as well as communication and financing methods and the economic models involved.
We carried out various types of transactions on the public blockchains of Bitcoin and Ethereum in order to gain practical experience. In other cases, such as Libra, we studied the technical systems through existing documentation (i.e., whitepapers, developer documentation, product presentations).
Finally, we spoke to about 20 people1 involved in the field, both in Switzerland and abroad. These interviews lasted between one and three hours. Some interviews took place over the phone or by videoconference, while others were conducted in person. Interviews were decidedly unstructured in order to maintain a situational overview within this dynamic approach. Therefore, interviews with subject-matter experts did not utilize pre-defined questions; instead, the interviewees were provided a list of topics we wished to address. Specific challenges included adopting a balanced outlook while staying up to date on a subject that is rapidly and continuously changing.
This report is divided into five sections. The first introduces blockchain as a historical construct, a concept that gradually developed through the course of computing history. We describe the evolution of the reasoning behind it and the achievements that gradually led to the consolidation of blockchain, with a special focus on cryptography and distributed systems.
In the second section we examine the creation and proliferation of Bitcoin as the first large-scale application of blockchain technology. In this exercise we not only trace the biography of bitcoin, but also present the constituent elements of blockchain in order to consolidate our analytical framework.
The third section introduces the way in which the technical concept enabling the operation and administration of Bitcoin -- the blockchain -- has become an object of study in itself. We describe how the Bitcoin protocol represents other assets, and how the concept of a distributed ledger was developed to meet the requirements of major industrial and financial players.
In the fourth section, we describe how blockchain has been socialized, i.e., how it interacts with social structures. We study two types of socialisation models: an exogenous model, which considers how terminology developed and normalisation strategies; and an endogenous model, based on blockchain's technological capabilities, such as financing methods, distribution rules, fork possibilities2, and incentive mechanisms that enables blockchain to be assimilated into social structures.
In the last section, we describe how blockchain has found a niche in the collective imagination and how it has changed the ways in which certain problems are approached. We call this movement 'designing through blockchain. We explain this phenomenon by analysing the emergence of an entirely new industrial sector centred around blockchain technology. We look at the ways in which regulation and identity recognition techniques have undergone both concrete and conceptual upheavals because of blockchain.
The report's conclusions pave the way for further discussion on the growing connections between blockchain and the administration of public affairs. They describe how blockchain has exposed the ways in which national legal systems can and have been bypassed, and address new normalisation regimes enshrined in global law. Lastly, we raise wider questions about the democratic methods for managing information in the public space.
See list of contributors, p. 333.
A fork happens when developers take a copy of source code from one software and start independent development on it, creating a new and separate project.