I wrote a piece last September titled ‘Why Our Economic Liberty Depends on the Blockchain’, providing an analysis on why I am certain distributed ledger technology is important to securing our rights under the law in the digital age.
In an ever-increasing realm of technology that is meant to improve (in positive ways) facets of our lives, the imperfection of humanity still exists while felonious behaviour heavily plagues the banking world.
As a firm advocate for the rule of law, I find revelations by CBC’s Go Public last week, that highlighted rampant fraudulent activity occurring amongst Canada’s largest financial institutions (TD, BMO, RBC, CIBC, and Scotiabank) disturbing to say the least.
‘This is why the only solution really is to have government step in and look after the Canadian people.’ says lobbyist Stan Buell as quoted in the CBC article.
Ultimately directives from above led to not only immoral, but also illegal tactics that chased their bottoms lines.
Blockchain is the answer, not government.
Adding more bureaucracy at a government level will only exacerbate the status quo. In my previous article I had given several broad examples of current institutions that could improve themselves, one being quasi-relevant to the financial fraud currently being exposed in Canada financial sector.
The example involved an auditing scheme for tax purposes. To elaborate further, imagine that all of a company’s financial transactions were logged through an accountable and transparent ledger framework. This framework would allow external entities, shareholders, and government institutions, to maintain an accurate record of accounts and what has occurred historically.
This is achieved by codifying the requirements as ‘law’ into the ledger framework. Furthermore, the framework may include higher levels of control aimed a preventing fraudulent activity and deception by implementing key controls at all levels of the frameworks functionality.
This train of thought is not dissimilar in many respects, to another use case for blockchain tech that applies to last week’s discovery of abuse and corruption by the big banks.
A contract-based ledger framework could prevent bank employees and management from engaging in these types of activities, as pre-determined ‘unacceptable’ or ‘unallowable’ rules are enforced at a programmatic level. The framework of such a ledger essentially has a ‘Constitution’ that enforces the rules, which is pre-determined and mutually agreed upon implementation and development of such a framework.
The ‘Constitution’ is the equivalent of your ‘smart-contract’, best conceptualized and initially implemented in technologies like Ethereum.
Tying back into protecting our economic liberties, I find reactive opines for band-aid solutions will ultimately usher in more government to ‘protect’ us against these types of activities.
The truth is that more government will erode our liberties, not protect us, and the key point here is to leverage these new elegant and robust technologies to solve current problems inherent in an old and outdated system.
These technologies were developed by the private sector and we must avoid submission to increasing the size of the nanny state.
Thus as I have always maintained, our economic liberty depends on the blockchain.