Does Blockchain Aid ‘Crypto-Colonialism?’

Does Blockchain Aid ‘Crypto-Colonialism?’
When ‘Tech For Good’ Goes Bad.


In their article Blockchain for Good?, Kewell, Adams, and Parry differentiate between the intended use of an artefact (one which is built into its design), and the properties which it assumes, that ultimately allow for a different use of the very same artefact.

According to Kewell and co, when it comes to the distributed ledger technology, “to focus on a single application or specific use of the Blockchain is to overlook its significance for ethical impacts at the global level.” In fact, “Blockchain affordances” relate to the “discernment of what the software can do for sustainable development and environmental protection in parallel with an appreciation of what novel development could realise for vulnerable and impoverished communities.”

Blockchain “may be a boon in developing or politically unstable economies” when paired with nuanced values. It appears, however, that Blockchain technology is less to blame for its political instrumentalisation – as it is with every technology, it reproduces current political situations and might thus become yet another tool to reinforce particular values.

Dr. Olivier Jutel is a communications lecturer at the University of Otago whose research has been concerned with digital media and politics. His ongoing work examines the role of techno-utopian and cyber-war discourses in the geopolitics of platforms. Jutel’s work is highly interdisciplinary, bringing together political economy, critical theory, and psychoanalytic political theory to examine the rise of online political movements.

He argues that the ability of blockchain enthusiasts to experiment with governance and payment platforms in the developing world is a result of the ascendant private-public partnership (PPP) model in the non-governmental organisation (NGO) sector, which has increasingly aligned itself with Silicon Valley’s cultural values. This overview of flagship blockchain projects finds end-user solutions and outcomes that principally serve a public-relations (PR) function for the broader crypto-economy and extend colonial legacies of experimentation in the developing world.

Jutel’s most recent research seeks to contextualise the emergence of blockchain technology within the humanitarian sector as a product of the broader political economy of cryptocurrencies and blockchain platforms. The significance of this is that the people and economies of the developing world have become testing grounds for technologies that undermine the independence of developing world countries, continue colonial legacies of value extraction, and contribute to the PR hype that is central to inflating cryptocurrencies. Blockchain white papers and project reports consistently skirt the questions of risk, technological and political suitability, and notions of end-user empowerment that are context specific.


Tokenizing Tech For Good

An exciting application of blockchain would be forecast-based financing coupled with smart contracts between funding organisations and implementing partners – for example, the use of Big Data to forecast the onset of natural and man-made crises, leveraging indicators that trigger smart contract transactions to implement engagement in disaster risk reduction and conflict management preventively. This might not only increase the efficiency of funding instruments but also reduce the degree to which crisis funding is often dependent on political will and bargaining positions of donor countries.

‘Qualified money,’ i.e. task and purpose specific funding, might increase accountability to donors and beneficiaries and reduce corruption. This does come with the potential pitfall that NGOs, which often need to rely on bribes and bargains to gain access to the most vulnerable, might be more restricted in their operational freedom. At the same time, a completely transparent chain of transactions, end-to-end from donor to beneficiary, would be a milestone to ensure that no diversion, abuse or misallocation of funds could happen or that unethical funds end up in the financial supply chain.

The important question remains whether this new technology complies with established humanitarian principles and professional codes of conduct. The issue of data privacy for example would need to be addressed before the technology could be used within complex, volatile contexts. The stakes are high, and any use of this potentially transformative technology must uphold the principle ‘do no harm.’

While certain features of Blockchain technology are often considered to be absolute and intrinsic, it is critical to realise that characteristics such as decentralisation, transparency, and immutability should be understood as outcomes of intentional choices in developing these technological architectures. These features are by no means necessary or intrinsically good. Such an understanding allows stakeholders to recognise that intentional design choices have to be made around the design of Blockchain-enabled systems in order to ensure the product fully realises its designer’s objectives.


Smart Contracting Crypto-Colonialism

Figures such as Dr. Jutel claim that the socio-political aspects of many humanitarian blockchain projects are inextricably linked to the politics of the crypto-economy, proprietary platforms, and a class of ‘solutionists’ championing Silicon Valley’s cultural values.

This is because blockchain humanitarianism has emerged through a private-public partnership (PPP) model in the non-governmental organisation (NGO) sector that embraces tech disruption and innovation. Ethically sound blockchain humanitarian projects are precluded by the inherent obscurantism of the technology, the inability to transpose blockchain’s governance logic in the social realm, and inextricable ties to the political economy of cryptocurrencies. Projects in the developing world have thus embodied a colonial logic of techno-experimentation for platform developers and imbricate the NGO sector into the PR logic of blockchain solutionism.

In Jutel’s analysis, blockchain humanitarianism is inseparable from crypto-colonialism as the developers, platforms, and rhetoric are interchangeable. A minimal requirement for an ethically sound blockchain humanitarian project would involve acknowledging the risk and ideological extremism of crypto, the importance of developing world sovereignty, and the legacies of colonialism through technological abstraction. The ethical failings of the PPP model in this case should be read alongside the scholarship of Madianou and Nothias and point to the need for developing world platform self-determination analogous to the Non-Aligned Movement’s call for a New World Information and Communication Order.

Robert Herian describes this as “the psycho-politics of blockchain” in which a fear of the social and pathological distrust of the other is overcome through this universal technological metaphor. He writes that this technological faith is “replete with types of religiosity and crytophoric symbolisation that were once the preserve of spiritual authorities but now intermingle economic and political power.” It is in this vein that Joe Lubin, founder of the blockchain startup incubator ConsenSys, has described figures such as Vitalik Buterin as “a genius alien that [has] arrived on this planet to deliver the sacrosanct gift of decentralisation.”

The presence of blockchain in the humanitarian sector today is mostly a result of the neoliberal emphasis on public-private partnerships, audit and procurement efficiencies, and the diminished role of the developing world state in social provision. Neoliberalism is a contested concept but can be broadly understood as the privileging of the market and price signals over the public sector.

Blockchain advocates tend to claim both the perfection of this market logic through the tokenisation of all value and a transcendence of the state with concepts such as web3 or the metaverse. What is characteristic of projects such as the World Food Program’s Building Blocks and efforts in self-sovereign identity (SSI) is a hedging on future use cases and the assumption that more services will be absorbed by blockchain.

While blockchain humanitarian use cases might be modest in scale, rhetorically they are essential in promoting the cultural values of Silicon Valley. Experiments in disaster relief, digital identity, and governance may burnish the innovation credibility of aid agencies or generate media hype for a particular blockchain. In this way, humanitarian projects are inextricably linked to the grandiose pronouncements and speculation of the broader crypto-economy from El Salvador to Facebook’s Libra.

In the case of Vanuatu, Oxfam’s flagship blockchain project operates alongside the most dubious elements of crypto and against government attempts to regulate in the public interest. Beyond experimentation in the humanitarian sector, this technology has enabled neocolonial land grabs and forms of platform control that seek to impose blockchain as law in the developing world. Blockchain can be thought of as an obscurantist paradigm in which a purity of purpose overrides the necessity for design grounded in an understanding of existing human systems.

Blockchain humanitarian projects and partnerships with aid agencies have been a critical means of conferring legitimacy upon the claims of blockchain boosters. The technology’s emergence in this space is symptomatic of a neoliberal aid model that embraces PPPs, touts digital technologies under the rubric of efficiency, and creates competition incentives for project funding.

Conceptions of ethical best practices for blockchain and other emerging technologies operate within these core principles of competitive procurement, audit culture, and transparency. In addition to these governance principles, digital technologies are also synonymous with the rhetoric of individual empowerment and the ability to “correct the asymmetries on which humanitarianism is based.”

Blockchain advocates have positioned their projects as responsive to these imperatives and the humanitarian ethical best practices of “humanity, neutrality, impartiality, independence … [and] dignity.” Furthermore, blockchain’s transformational power is seen going beyond moribund and unresponsive bureaucracies, whether for the developing world state or traditional aid.

A report from the Overseas Development Institute, a European tech-humanitarian advocacy group, claims that the problems with inequities in aid lie in too limited an application of blockchain. This is a problem of blockchain projects “adopt[ing] a reformative, rather than transformative, approach … reproducing many of the underlying power dynamics, hierarchical structures, funding flows, and deployment strategies that already exist in traditional humanitarianism.” Blockchain thus represents the height of the market-led neoliberal approach to the development sector, while presenting itself as a transcendent technology of empowerment.

The most high-profile application of blockchain in this manner is the World Food Program’s (WFP) Building Blocks. It is a project hatched in the WFP’s Innovation Accelerator that embraces the PPP model and Silicon Valley mantras in its branding: “Innovation to #DisruptHunger.” The program centres on an Ethereum software platform for cash aid developed inside a Syrian refugee camp and is the “largest implementation of blockchain technology for humanitarian aid in the world.”

Recipients submit to a retinal scan, which functions as a unique digital identity analogous to a bitcoin wallet from which they can access a balance and make and receive payments. Aside from the ethical questions of biometrics and digital identity, the contours of the blockchain are notable – as a private and permissioned system, this is the epitome of a database masquerading as a blockchain. There is no mining or consensus algorithm, and by the WFP’s own admission, scaling into an actual blockchain remains a speculative horizon dependent on the participation of other institutions.

UN Women has launched a pilot on Building Blocks and concludes the unrealised potential of blockchain serves “as a stepping-stone towards broader collaboration within the humanitarian cash ecosystem.” In this way, aid recipients are not the liberated subjects of blockchain so much as the test subjects for enterprise software that fits the innovation rubric.

The watchword of innovation pushes the ethical premises of tech-humanitarianism and PPPs to absurdity in the case of the WFP’s partnership with the CIA-funded American national security contractor Palantir, notorious for its lack of transparency. Thus, blockchain’s governance ideal of immutable data creates technological affordances to entrenched geopolitical interests, bureaucratic intermediaries, and the shadowy world of private intelligence to survey and intervene in conflict zones and the developing world.


Tracking Techtopia

While the ethical issues between capital, technology, and philanthropy are not exclusive to blockchain, it is a platform uniquely suited to the self-reinforcing cycles of solutionist hype regardless of project suitability. The impetus may well be genuine but can only serve to cast problems and solutions in terms venture capitalists, tech developers, and crypto-billionaires understand.

These imperial class politics become undeniable in the form of the Global Blockchain Business Council, which boasts having been conceived on Richard Branson’s Necker Island and launched at Davos. In short, Blockchain technology has great potential. However, it is still in such an early stage of development that its advantages and disadvantages remain unclear, and while they are frequently touted as revolutionary, they are still subject to the prevailing paradigm.

Only with 1) Well-selected implementation choices, 2) Clear ethical guidelines, and 3) Common monitoring and evaluation frameworks can Blockchain move reasonably and reliably beyond its current hype and become a standard of implementation for the future of aid, action and development more generally, as well as meeting Sustainable Development Goals.