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Blockchain, sustainability and decentralization. Blockchain in the ‘Dutch polder’
Community Community BlockChain

Society embraces 'blockchain', the disruptive technology behind money alternatives such as bitcoin. But do we also embrace the radical ideals and assumptions behind them?

Broadly smiling and rattling with enthusiasm, 33-year-old Rylana Doesburg shows a QR code on her telephone: an angular pattern of white and black squares. "Thanks to this picture, I have been able to buy rompers, a winter coat and Christmas gifts for my daughter last month." For three months now, the single support mothers from Zuidhorn have been using the 'child package' of the municipality.
Former municipal buidling Zuidhorn
It is one of the many pots that she can use, although this is administratively the easiest. As soon as something changes to her income situation she has to go into the papers for all her other allowances to see if she does not suddenly receive too much or too little. 'A few weeks ago I had some work in a factory nearby, but I have already got my resignation', she sighs. The work was done. "Now I have to recalculate what I am entitled to and fill out forms." She is grateful for the jungle of subsidy schemes that the Netherlands knows for people in financial need - although she is also afraid of getting lost when she makes a mistake. 'If I make one mistake there is the chance that I have to pay everything back.'
The bright spot in that paper mountain is the QR code on her phone. When she scans that image at one of the twelve affiliated stores in Zuidhorn she can buy things for her three-year-old daughter. Every time such a scan takes place, an anonymous request is sent to a blockchaind database that immediately checks whether all conditions are met: does it still have sufficient credit? Is the store right? Under an agreement, 'ethers' (cryptocurrencies) are transferred from the municipal cash to the retailer, a transaction that is converted directly into euros via a special bank.

'I used to have trouble with municipal coupons, now the money is in my account within a day', says a bicycle mechanic who has sold three children's bicycles to poor-minded villagers since the introduction of the new system.
As far as blockchain is concerned Doesburg and the bicycle repairer do not know exactly what 'ethers' are involved. Nevertheless, the system runs on the innovative technology that is not received by the least as 'the biggest information revolution since the Internet'.

Blockchain is in the spotlight worldwide. In Radical Technologies, urban designer and designer Adam Greenfield describes it as one of the first contemporary technologies that are so radically different that intelligent people can barely contain them. For those who want to make an attempt a short explanation: blockchain is a mass-controlled administration. Nobody is the owner and a network of connected computers ensures correctness through an algorithm.
Blockchain diagram

That has big advantages. At this moment people exchange data online by sending copies. This article was written on a laptop, then mailed to the chief editor and then sent to the final editing. These were all copies of the original. That works fine, but for more complex data exchanges it can be downright awkward. For example, if you transfer 100 euros, you must ensure that the recipient receives that money and the giver no longer owns it. If that one hundred euros continues to exist in multiple accounts, there will be errors, if that is done will we even call it fraud.
Now banks, notaries, governments or other intermediaries are responsible for this control. Blockchain promises to put those people out of the game. Not a central party, but all users together check with their joint computer power the correctness of information. Who transfers ownership to someone else via the blockchain sends an order into the system. These orders end up in so-called 'blocks'. Every ten minutes a network of computers checks blocks and after approval they are added to the chain. From that moment on the order is irreversible. Blockchain thus creates a long chain in which individuals who do not know each other can transfer ownership without the intervention of a third party. 'Blockchain makes trust in digital form available', summarizes the Ministry of Economic Affairs.

Not only in Zuidhorn does this appeal to the imagination. 'Netherlands innovation country' is fully dedicated to this development. For example, there is the Dutch Blockchain Coalition, in which the government, industry and universities explore the possibilities. In addition, there are thirty experiments in municipalities and ministries under the flag Blockchain Pilots, a hip platform set up by the national government. The Association of Dutch Municipalities (vng) has also been running such a pilot program for a year and a half.

In Zaandam they test out whether marriages and segregation can take place via the blockchain, in Eindhoven they want to record land ownership and in Drechtsteden the parking permits for invalids now go into a decentralized database.
'What I see here I have not seen anywhere else in the world. The Netherlands is further than well-known blockchain hubs such as Dubai and Singapore ', says Vinay Gupta, who works at blockhouse application Ethereum, with whom people can enter into binding contracts without the intervention of third parties. He spoke those words in the Ridderzaal, where in September last year a big blockchain conference took place. Former minister Stef Blok did a word and Prince Constantijn opened the event. According to the prince, the promising technology is still bursting with bubbles, hypes and mistakes. 'But eventually it will work!"

A group of Dutch municipalities experimenting with blockchain shows that almost all of them are still in the 'conceptual phase' or 'still brainstorming'. Who really wants to see how blockchain can be applied locally, says everyone, must travel to the green rural municipality of Zuidhorn, in the shadow of Groningen. 'Barely a year ago we wanted to do something with blockchain here as well,' says Erwin Van der Maesen de Sombreff, the official who suggested the idea internally. What it was supposed to be or what they could do with it, no one really knew. 'What we did know is that it comes to us and is disruptive, especially for the government itself. We could wait and see whether the flight would be ahead, 'says Van der Maesen de Sombreff. That flight was an internship vacancy for students specializing in technology.
From that moment on it went fast. After two students were hired and given the budget to work out pilots and take part in an important blockchain competition - which they won - Zuidhorn was suddenly on the digital card.
Entrance sign municipal Zuidhorn
Two months ago it became the first municipality to decentralize a serious care task of the government, the child packages. Actually again. After a lot of care tasks from the national government went to the municipalities, even a care task is now being decentralized to the citizens. What used to be complex and required the efforts of many civil servants now takes place between citizens, entrepreneurs and care providers with minimal intervention from the municipality. In Zuidhorn, an algorithm now takes over a large part of the control of child parcels and citizens themselves have become managers of their own piece of the 'chain'. And thus owner of their own data. "The ideal of the sovereign individual is an important motive for many people in the blockchain movement," says Maarten Velthuijs, the 24-year-old student who started as a trainee but now accompanies Zuidhorn with the blockchain project. He now does so from his own foundation Forus, a contraction of for and us. Six predominantly young programmers and consultants work together with a wide range of freelancers for the foundation. The telephone is red-hot: other municipalities and organizations like the Vluchtelingenwerk Foundation also want blockchain solutions.

The fact that Zuidhorn is winning small blockchain competitions as a result of the fact that we have really embraced the radical ideal of change, they say at the town hall. Many parties are still in the way, according to Velthuijs: 'Rabobank would never develop the bitcoin. Why would a bank invent a coin that aims to sidestep the banks? "Alderman of Economy and Innovation Fred Stol agrees:" You must be prepared to revise your own position. We see the world changing very quickly and the government is no longer leading. We gradually become part of a network instead of looking down on it from an ivory tower. '

Worldwide, the caring of Blockchain applications is the fact. Nobody disputes the revolutionary power of the decentralized administration technology, but the intentions of developers at the cradle of it. The United Nations, the ecb and the imf warn in various reports or through minds of administrators for the ideological views that are hidden in the code of blockchain applications. This is not entirely surprising, since they are themselves under attack from the blockchain movement.

The removal of powerful intermediaries, such as the government or banks, is a long-cherished wish of online activists. 'Since the arrival of the internet, hacker ethic has been punctuated with anarchist ideals,' says Tsjalling Swierstra, professor of technology philosophy and ethics in Maastricht. It is striking that the blockchain movement mainly attracts anarchists of particular cut: anarcho capitalists. In academic literature earmarked as 'cyber libertarians', technically clever leaders who believe that the internet must be a free and unregulated market in which individuality and ownership are leading.
"When the first blockchain technologies came up, I immediately recognized the far-right economic ideas of my time on Wall Street, where conspiracy theories about gold and the role of the Federal Reserve were very dominant," writes David Golumbia in an e-mail. For years he was a software developer in the financial sector, now he works as a media professor at Virginia Commonwealth University. About the parallels between right-wing economic ideas on Wall Street and new blockhouse applications, he wrote the book The Politics of Bitcoin: Software as Right-Wing Extremism, which mainly reads as a warning to enthusiasts who are now behind the hype while adhering to other ideas.
'Blockchain is home to a number of intrinsic right-wing principles such as striving to remove' the middleman '. Proponents call this an unnecessary link and annoying bureaucracy, I call that legitimate control and regulation. "According to Golumbia, the broad embracing of blockchain fits in with decades of striving to reduce the government. 'The danger is that the rapid spread of blockchain technology will also spread the underlying philosophy, and that is strongly opposed to democratic control over economic inequality.'

As an example he mentions the blockchain application Ethereum, which is currently very much in the spotlight. This allows people worldwide to close 'smart contracts' without obstacles. The agreements are programmed and are binding because the contracts are always linked to cryptocurrency that is part of the system. An example of such a smart contract is, for example, a will: if my nephew turns eighteen and I have died, then a certain amount of ether (internet money) goes to his account. This can be programmed across national borders and without the help of a civil-law notary or interference from the government. "This type of contracts between people, without the intervention of others, is the kind of system that cryptolibertarians have been searching for for a long time," Golumbia says. 'It facilitates the free market but puts the government and external control aside.'

When last year's news website asked the thinkers where Ethereum founder Vitalik Buterin was inspired by, he immediately drew the names Ludwig von Mises, Friedrich Hayek, Milton Friedman, Thomas Sowell, Murray Rothbard and Ayn Rand.
Those names are rampant on blockchain forums and cryptocurrency websites. Especially Von Mises, Rothbard and Hayek seem to be in vogue there. Not the least thinkers, but they are certainly not undisputed. They are part of the Austrian Economic School, where at the end of the nineteenth century and during the twentieth century the neoclassical theories were formulated that later planted the seed for what we now call neoliberalism.

According to technology philosopher Tsjalling Swierstra, there are big similarities between the blockchain supporters and the views of the Austrian School. Both have a strong belief in cybernetics, the system theory that describes how biological and mechanical systems work best if they feed constantly through internal feedback. The many separate parts would work best if they were free of external interventions that could disrupt that process. Call it the scientific foundation of the invisible hand of Adam Smith.

'Hayek has been strongly influenced by cybernetics, it fits in perfectly with the core of his free market defense: the idea that the state is always more stupid because all the scattered knowledge in a society can not be easily centralized', says Swierstra. The blockchain has the same conviction that central management and control always make it against a web of individuals who pursue their own needs from behind their computers. 'In technology philosophy you should consider the free market ideal as the precursor of blockchain.'
It is no coincidence that this technology emerged strongly during crisis years, says René Penning de Vries, appointed by the Ministry of Economic Affairs as' figurehead ICT ':' A trust problem has arisen between the central power and citizens. By giving blockchain people more control over their own data, you can come to new relationships and confidence can be restored. "He also sees risks:" This technology stems from a free-spirited nerdy environment that is strongly libertarian oriented. Many ministries and companies saw it a few years ago as a dark cloud above their heads. In the meantime they also see the benefits and it is our task to investigate with these authorities how we can ensure that this can be done in a responsible way in society. '
According to him, the specter is the monopoly position of the big five from Silicon Valley: the companies Facebook, Apple, Amazon, Microsoft and Alphabet (the parent company of Google). "They are currently dominating the internet. While if you had asked 25 years ago if we wanted that now, we had never chosen it. We now have to ask the same ethical and political questions in blockchain.'

Blockchain embracing is accompanied by a decrease in power from the government, confirm the aldermen in Zuidhorn. According to them, the big question is not whether that is the case, but where that power will lie. 'When it comes to the traffic lights, we will continue to deliver them as government. And if someone drives red, the person must be stopped immediately, 'says Stol. "But when it comes to organizing or keeping open a nursing home or a new football field, you can also give that back to the citizens." People are already dreaming about what else could be arranged via the blockchain after the child package: obviously other social jars, but also lot registration and sustainability loans for solar panels.

Admittedly, says the CDA minister sitting next to his ChristenUnie colleague, this environment is ideal for a blockchaine experiment. "Numeracy (neighborliness) and Christian values ​​ensure that the community likes to solve matters themselves and take the initiative." The aldermen like to show through the window, where the end of the village can be seen and long meadows extend up to the next village. 'We used to be tempted by the ideal of the market, and we also leaned heavily on the government. Both have not turned out to be blissful. People want to do it together here. Without central power."

In politico-philosophical terms: the power must return to the commons, to the community. 'In a place like Zuidhorn where the population is fairly homogeneous and there are strong connections, it is easier to do so', also agrees Maïka De Keyzer, researcher on 'the commons' at the University of Antwerp. It is unique, she says. 'History teaches that the removal of central authority does not automatically lead to power for the collective. A small elite group or a few individuals often know how to monopolize this power.'

According to her, blockchain is not inherently left or right but new tools that take the form of the most dominant ideology that is currently in our society, is according to her now individualistic free market thinking. 'If we want to use blockchain for the management of collective property, then that thinking must first be more broadly developed.'
Code is never neutral. The people who embrace technology project their own world view on what they are tinkering with. The first and best-known blockchain applications are cryptocurrency, online money with which citizens can trade with each other outside their official state currency. An idea that Friedrick Hayek described in The Denationalization of Money in 1976, in which he opposed central banks and stated that the state should not have a monopoly on currencies. Today, libertarian think tanks are eager to revert to this 41-year-old argument to praise new tech initiatives.

Does blockchain become a facilitator of communities or wild-world cowboys?

The best known 'crypto coin' bitcoin does not hide its ideological views. The anonymous inventor - the pseudonym Satoshi Nakamoto - wrote in November 2008, one month after he published the blueprint for his crypto coin, in no uncertain terms that his invention would be 'very attractive to people with a libertarian world view, if only we explain it correctly. But I am better with code than with words."
If you look at that code better, you will see that the coin is programmed so that it only has 21 million of it, which means that just like gold, the total quantity is finite. A technological choice is not. It is a purely economic and ideological decision to protect scarcity. And that strongly reflects the strong sentiment among libertarians that the ever-abolished gold standard - which linked the value of the dollar to gold - should come back. Despite broad consensus among economists that the abolition of that standard was a good idea, it turns out that the choices made by a small group of advocates from the right-wing perspective are decisive for how new blockhouse applications take shape. The manifesto of the Bitcoin Foundation is peppered with criticism of our current 'fiat money' and contains a hymn of praise on the abolished gold standard.
That analogy with gold is constant. Who wants to obtain bitcoins can simply buy them but also mines. Delving in Dutch and a reference to the digging up of gold. Bitcoin is constructed in such a way that all transactions in the joint ledger have to be checked. This is done via an algorithm and costs a lot of computer power. Those who make available computer power receive compensation: the chance to extract bitcoins. As with real gold, finding it becomes increasingly difficult.
With this, the cyber activists fall back on the kind of romance that is widespread in the United States among conservative libertarians: a deep-seated longing for the time when America was still an open space where people escaped the yoke of European monarchies could build their own existence. 'The nice thing about libertarianism is that it has a very egalitarian rhetoric,' says Swierstra. "Everyone has a chance. But we know from history that communities can start very egally, but without collective mechanisms you quickly get big power and income differences. There you have to come up with compelling rules for solving that, but libertarians do not want that.'

Strikingly, just like the real Californian gold rush in the nineteenth century, there are people from the very first hour who have built up millions of euros in property, while those who now report the wallet or have to hope that they can dig a clump by turning in the bitcoin system. The greater the computer power, the greater the chance that you 'dig up' something. In practice, this means that a handful of gigantic companies, mostly in China, now control and earn almost all transactions. There is no question of equal opportunities anymore. Those with money or knowledge dominate the software where in principle users should have had equal influence.

Does blockchain become a facilitator for communities or cowboys in a wild-west environment? This dichotomy is indicative of how political organizations worldwide look desperately at blockchain. It is revolutionary technology many of whom want the technology, but not the revolution. The solution is often to choose a 'closed blockchain'. The initially critical United Nations currently use blockchain to implement emergency food programs in Jordan in a smarter and more transparent manner. They use smart technology in a closed context. The system and the data remain the property of the organization and they can decide who can participate and who can not. Blockchain is nothing more than an optimization technology.
Banks now embrace the cryptomunt ripple, which benefits from blockchain technology but is managed by a centrally managed organization. And therefore does not know the disruptive nature that characterizes bitcoin and other popular money alternatives. A thorn in the eye for cyber libertarians from the very beginning. They fear that their libertarian upheaval will be nipped in the bud; that in the end governments will keep on turning the buttons and not a public algorithm.
The aldermen Bert Nederveen and Fred Stol at the town hall in Zuidhorn consciously - and unlike many government bodies - opted for a public blockchain. 'We believe in this technology and therefore wanted to set up a public blockchain. So that the power really comes to lie with the community. "However, it was of decisive importance that the students who developed it would do so from a foundation. 'We wanted to pay them cleanly, of course, but prevent money and commercial interests from becoming the target', says Bert Nederveen. 'What is made here is for the community and must remain so.'
From behind the door of the office in which the aldermen tell their story, the festivities of a New Year's party slowly dawn. The 150-man town hall celebrates a large party each year, including quiz, performances and drinks. The question is how long that will happen at this location. The municipality wants to abolish stepwise "the town hall" and to work independently from each other via digital systems.
'Our employees must be using laptops in the community centers as of 1 January 2019 to serve the public directly', says Stol. 'As equal and as part of a community. Without hierarchy, without hassle. That fits a community where the government is no longer leading.'

By Coen van de Ven, De Groene Amsterdammer