Blockchain for Brexit: a wonderfully terrible idea

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She can't see them accepting it. Nor can we. (Screenshot from the prime minister's Facebook page)

We've been here before. Blockchain, the antidote to all the world's greatest ills, is once again being trotted out as a solution to Brexit.

The last time, you might remember, it was our dear Chancellor of the Exchequer, Spreadsheet Phil himself, who decided that the distributed and supposedly immutable version of the humble spreadsheet was “the most obvious technology” to tackle... oh just the incredibly complex and sensitive Irish border question.

And amazingly (although also somewhat predictably), our Phil wasn't the first to suggest such a thing. There have been whole papers written about a blockchain for Brexit; countless column inches dedicated to the fanciful idea.

This time, it's the turn of an “internet pioneer” and CoinDesk advisory board member Pindar Wong, who penned an op-ed entitled “Is it time for a blockchain Brexit?” (cc Betteridge, Ian) that was published on CoinDesk, a crypto news site, on Monday.

But where our Phil lacked detail (admitting that he was no “expert” on the matter), Wong has us covered.

He starts powerfully; passionately; provocatively:

There is a crisis in governance. I’m not talking about bitcoin, but Brexit.

Wow, yeah. He totally caught us out there. Clever.

He carries on:

Where blockchain can help is that its ‘cryptographic certainty’ avoids the need for bordered thinking in the borderless world created by the internet, a world where laws are difficult to enforce and collaboration difficult to incentivise. Could thinking harder about what we mean by a ‘border’ be the key to unlocking the current political deadlock?

With less than four days to go until we (maybe) leave the European Union, the idea that we might be able to break the current deadlock by having a quick rethink of the very things that separate each of the world's polities from one another seems a bit of a stretch, but maybe the cryptographic certainty thing can help?

No. Really very much no. Cryptographic certainty is the idea that by hashing down a set of data (like, for example, bitcoin transactions) and sticking that on to a block that is part of a chain of other blocks (blockchain!), thereby encrypting it, we get mathematical certainty that this hash represents that particular set of data and the order the blocks are in is the correct one. So it gives us a kind of finality about the records of that data. But the problem is not finality of the records of data. Unlike bitcoin transactions, which are just strings of numbers moving around the internet, actual matter needs to cross borders. People. Stuff. With lives. Homes. And hugely varied perspectives on political matters.

There were some nice takes on Monday that derided Wong's op-ed, like from Jessica Klein in Breaker Mag who rightly pointed out the dangers of just throwing tech at problems without considering the real ethical dilemmas underlying them:

Ignoring not just the historical context but the present-day logistics of this border (about 30,000 people cross the Irish border daily) is not just frankly insensitive, but also indicative of a wider problem with the tech world prescribing digital solutions to physical, human, and historically rich problems. These “solutions” lack context in favour of efficiency, rendering them ethically impractical and, at times, dangerous.

Look no further than everyone’s favourite example(s) of irresponsible tech — Facebook and the 2016 election, or Facebook and the human moderators of traumatic content, or Facebook and the arbitration of white supremacist content. Facebook and large tech companies like it cause problems because the people making important decisions at those companies are focused on progress and profit margins, creating innovative tech without deeply considering the ethical dilemmas inherent in those creations.

And Yessi Bello-Perez in The Next Web, who wrote:

With so much at stake, it’s incredibly frustrating that technologists are taking the opportunity to tout blockchain as a solution to a problem that’s so far has proved difficult, painful, and expensive.

They're both absolutely right in showing contempt for such ridiculous, excessive techno-solutionism. But where they don't go quite far enough is that they that don't point out that blockchain, as we and others have said before, is a particularly crappy and incoherent technology (and this is understandable; they are after all writing for pro-tech, pro-blockchain news sites). If a mistake (whether deliberate or not) is made at the point that data representing real-world stuff is put on to a blockchain, there is no going back, because blockchain is an append-only database. If the person creating the code (which in Wong's vision would automate the payment of tariffs) makes an error in that bit of code (easy to do), we have ourselves a big problem. And if we're talking about blockchain in the context of a centralised system where data can be overwritten and changes can be made, so that these problems could be overcome, what's the point of it in the first place?

Blockchain throws up all sorts of new questions and problems and it's therefore a particularly crappy idea to be throwing it at such a particularly crap-strewn spectacle as Brexit.

The thing is though, the more this idea gets bandied about, the more the blockchainers expose the ridiculousness of their other ideas. Where an open-minded and uninformed reader might have (wrongly) bought into the idea that a blockchain can help combat the illegal fishing of tuna or ensure clinical trial integrity, they are likely to draw a line at the idea that blockchain can in any way solve a problem as intractable as Brexit. Or for that matter, solve the utter lack of any form of consensus in Parliament.

And that, for nocoiners/blockshamers like us, is the beauty of the blockchain for Brexit idea. It's so obviously not a technology problem, but rather a political, societal, historical, cultural, ethical and economic one, that the idea that a flimsy bit of tech can come in and solve it seems, frankly, preposterous. And that means that the credibility of the blockchain for other things gets chipped away at. (The blockchain for Brexit idea also reminds us of the delightful “blockchain for Bloxwich” report put forward last year by Tory backbencher Eddie Hughes, which we felt served a similar purpose.)

As for Wong, though, it's all quite simple. The obvious answer to all of this is not only the blockchain, but also the chainers' favourite new partner-in-crime, the stablecoin (a cryptocurrency pegged to a central-bank issued currency):

The key would be to use a government recognised stablecoin to lock/unlock product delivery, to incentivise deployment and to complement existing solutions for digitising international trade from firms like the UK’s Provenance, Denmark’s Maersk and France’s Carrefour...

Initially, only a Euro/Pound stablecoin would be used with nominal or zero tariffs enforced. This would result in a ‘Customs network,’ not a ‘Customs Union’, though initially, it would behave like one.

Someone is painfully wrong on the internet. And it's not Nouriel.

Related links:
Chancellor's blockchain idea is a desperate scrape of the Brexit barrel — FT Alphaville
Building a blockchain Britain in Bloxwich, because ...? — FT Alphaville
Sell all crypto and abandon all blockchain — FT Alphaville Blockchain insiders tell us why we don't need blockchain — FT Alphaville
Occam's blockchain shaver — FT Alphaville

  1. WeWrite-down
  2. No deal Brexit is not a hedge fund conspiracy
  3. Europe’s digital infrastructure issue
  4. Let’s give a helping hand to Andrew Yang
  5. Anatomy of a malware scam
  6. ARK Invest’s Tesla model gathers dust
  7. A delirious defence of Uber
  8. WeLiquid: Adam Neumann pockets $700m
  9. Yesterday, in efficient markets
  10. The warm fuzzy feeling of indirectly owning Tencent
  11. The best of Morgan Stanley's Adam Jonas
  12. Apple/Tesla: M&A and heartbreak
  13. Did Beyonce make $300m from Uber's IPO?
  14. Bitcoin is the 10-year Treasury of our time
  15. High resolution music is a solution looking for a problem
  16. Amazon is furious about this negative review
  17. Missing: $500bn of American savings
  18. The Bank of Hodlers [sic] (sigh)
  19. Behind the curtain at China Ding Yi Feng
  20. An answer to Mark Cuban's question
  21. Crumbs! It's CRYPTO: the movie!
  22. National Beverage Corp loses its fizz, and its mind
  23. Amazon won't spin-off Amazon Web Services
  24. Mensch! Dan McCrum is innocent, ok?
  25. Europe's $1 trillion tax gap
  26. Why online propaganda mobs are an investment red flag
  27. Davos has produced an amazing new guide on precisely how not to think about risk
  28. When the public relations industry does PR for itself
  29. Who wants to be crippled by student debt?
  30. The bitcoin price is wrong
  31. The warm fuzzy feeling of Goldman debt
  32. “Cryptoassets” are crashing again. Is it time to start calling them cryptoliabilities instead?
  33. Puff the tragic cryptowagon smokes out the Mumsnet demographic
  34. Don't write off the public sector
  35. Initiative Q: an elementary pyramid scheme with grandiose ideas [Update]
  36. Moral investments aren't outperforming
  37. No one is killing it in crypto (not even Woz)
  38. Too smooth: the red flag at Patisserie Valerie which was missed
  39. No, the housing crisis will not be solved by building more homes
  40. Sorry Civil, 'crypto-economics' and 'constitutions' won't save journalism
  41. 'Short-termism' isn't a thing, say Fed economists
  42. Coinbase wants to be “too big to fail”, lol
  43. Regulation and innovation don't have to be enemies
  44. Retailers get so lonely around the holidays
  45. Folli Follie: $1bn of fake sales, and what to learn from the debacle
  46. The new green evangelism
  47. Tilray, how low can it go?
  48. The ICO behind the tragic Everest stunt is now “airdropping” tokens from rockets
  49. Beware the Hindenburg Omen?
  50. The broken conversation about financial regulation
  51. The improbably profitable, loss-making Blue Prism
  52. The EM rout is not made in America
  53. Wages and growth and honestly we just give up
  54. Britain's first blockchain-enabled co-working space isn't blockchain-enabled
  55. There is a FIRE that never goes out
  56. The WeWork Garden of Eden
  57. IQE: lumpy 'Apple' sauce at the pricey Cardiff chip shop
  58. There's only so much a central bank can do alone
  59. Eight questions every first-time buyer should ask
  60. MiFID II: not all doom and gloom
  61. Tesla: getting to Q3 profitability
  62. Turkey contagion fears are overblown [Update]
  63. The chance of an inflation shock may be higher than you think
  64. Sorry Tim, the humanity is not being drained out of music
  65. Digital crop circles
  66. What could go wrong here?
  67. Sirius Minerals: money for a hole in the ground
  68. The Bank of England has a strange idea of what QE achieved
  69. One for the ladies...
  70. 'Of course, many ridiculous papers appeared'
  71. Is a change goin' to come?
  72. The capacity's not there yet (and probably never will be)
  73. Musk and Tesla are not inseparable
  74. Libraries, from Carnegie to Bezos
  75. Crypto & government: from anarchy to amity in the USA
  76. 'I'm sorry Dave, I'm afraid I cannot sanction this Series B round'
  77. RBC, through the FANG barrier
  78. Self-help to buy
  79. CFA: Chartered crypto analysts -- updated
  80. The Netflix dilemma -- updated
  81. Fujitsu's new blockchain offering: really cheap or really expensive?
  82. Nothing But the Shirt on Your Back
  83. Universities of Britain: cosying up to crypto is a bad look
  84. How to make a living in the cult of meritocracy
  85. Spotify: Drake-oil salesmen
  86. Oh, the digital humanity
  87. Sports are not markets, predictions ain't investment
  88. Spot the difference, Steinhoff edition
  89. Larry Robbins, a cautionary tale
  90. The node to serfdom
  91. Carney is down with the crypto kids
  92. Samsonite: inventory, excess baggage, and unresolved questions
  93. It might be a long wait for “the equivalent alternative to ICOs”
  94. Don't blame it on the sunshine
  95. In corporate America, brands develop you
  96. One in ten dollars of US housing were anonymous
  97. Should AT&T worry more about its debt?
  98. Who cares if Elon is incinerating capital?
  99. Let’s not try make 'crypto chicks' a thing
  100. Tokens all the way down
  101. Eight-dimensional chess with Elon Musk
  102. A lopsided trade is a good trade, Italian inflation edition
  103. How to buy Italian fire insurance
  104. Atlas bugged
  105. Inflating inflation
  106. Crypto's most devout believers are suffering a crisis of faith
  107. Plus500: past performance is no guide to the future
  108. Noble rot in a shrinking Harbour
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  114. At a crypto conference in New York, it feels like 2017 all over again
  115. Egregious expectations - Intelsat edition
  116. Bitcoin cash is expanding into the void
  117. Stop getting The Flintstones wrong
  118. Bond investors do not care if Argentina is solvent in 100 years
  119. Ubiquiti Networks: of cash and borrowed time
  120. “We're very disappointed in you, Spotify”
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  122. Tesla probably needs to raise capital this year
  123. No entitlement crisis in America
  124. Free cash flow to whom?
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  126. Human capital and the jobs guarantee
  127. This is a tech bubble, when's the crash?
  128. The magic of adjustments: ebitla-dee-da
  129. FUD, inglorious FUD
  130. A complex analysis reaches same conclusion as simple one: hedge funds suck
  131. The jobs guarantee and human-capital “nationalisation”
  132. These hedge fund numbers can't be right
  133. The Vomiting Camel has escaped from Bitcoin zoo
  134. Lies, damn lies, and charticles
  135. The world doesn't need more Elon Musks
  136. No, Facebook should not become a nonprofit
  137. Sell all crypto and abandon all blockchain
  138. Immutable ledgers meet European data protection
  139. Amazon is not a bubble
  140. Japan's economic miracle
  141. Have you ever meta crypto joke you didn't like?
  142. Delaware should change its rules to let the light in
  143. Who needs the labels anyway?
  144. Baby Boomers want your family to finance a larger share of their retirement
  145. No, America would not benefit from authoritarian central planning
  146. No one needs to buy Tesla
  147. How to win a debate in the cult of meritocracy
  148. Steinhoff International and the case of Pepkor Global Sourcing
  149. Sorry Jack, Bitcoin will not become the global currency
  150. The “academic’s cryptocurrency” is an elegant waste of time
  151. Cigarettes are the vice America needs
  152. Well that’s one reason to buy yen…
  153. Musicians, don't just blame the labels for your lack of dough
  154. Giving stock away to staff doesn't absolve share buybacks
  155. A penny for Macpherson’s thoughts on the nominal anchor
  156. Monopoly and its discontents
  157. A State of Mind
  158. America is not the least protectionist country in the world
  159. This is nuts, when does Netflix crash?
  160. No Bloomberg, the world's richest people did not lose $114bn...
  161. Someone is wrong on the internet, government employee pensions and passive investing edition
  162. Someone is wrong on the internet, possibly fragile
  163. Someone is wrong on the internet, consumer financial regulation edition
  164. Someone is wrong on the internet: tontine tokens [Update]
  165. Someone is wrong on the internet, road economics edition
  166. Someone is wrong on the internet, wages and the stock market edition
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