People Centered Blockchains

By Noah Thorp
August 10, 2016

Many technologies are designed with people in mind. But a new generation of technologies aren’t just used by people: At their core, they are shaped by the intentions and decisions of the people that use them. Chief among these are blockchains.

Blockchains may be as transformative as the Internet. In the same way that Internet protocols allowed us to democratize media production, blockchain protocols allow us to democratize financial networks. They enable ordinary citizens to create currency without central banks, and securely verify financial transactions for each other without trusted third party institutions.

After a few years of operation, Bitcoin, Ripple, Ethereum, and hundreds of other blockchain based cryptocurrencies have a collective market capitalization equivalent to billions of dollars. But who benefits from them, and how can we use blockchains to progress people centered values?


Blockchains like Bitcoin, Ethereum, Ripple, Hyperledger, and Stellar are open source distributed databases. They have protocols for network operators to send and confirm transactions. These protocols use cryptography to ensure that transactions are processed correctly, so the network can reach consensus about which transactions are valid.

At their simplest, blockchains track the transfer of tokens in a collectively-administered ledger of accounts. Cryptocurrency tokens can represent payment for processing transactions, or can be backed by assets like gold, smart grid energy, car titles, or stock. But this is just the beginning: Some blockchains, such as Ethereum, can also implement the rules of legal agreements in software code, called smart contracts. This code can securely automate elements like voting protocols, escrow, insurance and legal agreements.

There are several variants of blockchain systems that each have strong socio-political ramifications. Some of the most important spectrums of variation are transparency, who can issue transactions, and the immutability of past transactions. For example, Zcash optimizes for personal sovereignty through unregulated access to completely-encrypted transactions with zero transparency. On the other end of the spectrum, Hyperledger verifies the legal identities of account owners, and has the power to block access to transacting. Permissioned systems like Hyperledger are more favorable to banks, which need to comply with anti-money laundering regulations.


Cryptocurrency has earned network operators (called “miners”) hundreds of millions of dollars in “magic Internet money” during the Bitcoin, Ripple, and Ethereum gold rushes. These gold rushes built a new financial network without funding from the financial industry by printing money and giving it value through algorithmic scarcity. Once mined, these tokens have been traded on exchanges like Kraken and Poloniex by a new breed of cryptocurrency traders. Banks and FinTech startups are vying to be the third wave of beneficiaries in the new rise of permissioned blockchains.

Meanwhile, at the application layer, social capitalist organizations like Stellar are leading the way in using blockchains for increasing financial trust in transactions for the underbanked and low-cost cross border money transfers. The potential for supply chain transparency is also being explored by companies like Everledger, which uses the blockchain to thwart diamond insurance fraud. Also, despite Bitcoin’s crypto-anarchist cypherpunk origins, transparent permissioned blockchains are a regulator’s dream; they are now proving valuable to the growing industry referred to as RegTech.


In the wake of the financial crisis of 2008, Bitcoin creator Satoshi Nakamoto released a whitepaper specifying “…a purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution.” This decentralized system has inspired people to paths of economic resilience and opportunity in a time of global financial crisis.

However, Satoshi’s vision of decentralization has been regularly challenged by server farm operators that control network consensus, banks that wish to control access, tax authorities who want a share of capital gains, and regulators who wish to eliminate black market trafficking. As these forces attempt to put blockchains under more centralized control, alternative efforts like Ethereum seek to promote a decentralized autonomous society of personal sovereignty through a Bitcoin-like protocol with a decentralized legal contract layer. Ethereum now has more network nodes than Bitcoin, and over 62,000 meetup members worldwide. Last winter, Microsoft began hosting Ethereum on their Azure cloud computing offering.

One of the biggest debates in the community concerns interpretation of contracts by network operators, versus code as law. This debate was brought to the forefront recently when a “bug” in the code for a smart contract allowed the funneling of approximately $50 million dollars of the Ethereum cryptocurrency into a hacker’s account. The operators of peer to peer nodes responded by changing the interpretation of the code, rather than by abiding by the interpretation of code as law. The implications of the code as law debate are far reaching, for both Ethereum and other blockchains.


Blockchains are at the heart of some of the most polarized conversations of our time. Blockchains, or related decentralized financial technology, are sure to have implications for our future. Blockchain implementation details force us to reconcile transparency versus privacy, human versus machine decision making, universal access versus encrypted money laundering, and government regulation versus personal sovereignty. By their peer to peer nature block chains are intrinsically people centered. It is the regulation of relations between peers, degree of transparency, and the accessibility of operating networks that is currently for us to decide.

About the author: Noah Thorp is the Founder of CoMakery, a startup focused on tracking and trading crypto-equity for peer produced products. His interest in crypto-equity was sparked during his role as VP of Engineering at SharesPost and Nasdaq Private Market. He lives near Berkeley with his wife and two tea pots.

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