Building Decentralized Trust

Blockchain and distributed ledger technology is being advanced as a possible solution to the global crisis of trust, but in practice, this technology is still under theorized and not well understood. In 2019, the University of British Columbia hosted the Peter Wall Institute for Advanced Studies’ International Research Roundtable on blockchain and distributed ledger technologies. Taking the theme “The Truth Machine: Exploring the Social, Records and Technical Potential and Pitfalls of Blockchain and Distributed Ledger Technologies”, the roundtable applied a multidisciplinary and interdisciplinary strategic design-led approach, creating a collaborative environment for the attendant global thought leaders to co-generate knowledge, and to explore and capture the interrelationships among three identified layers—social, data/records, and technical—in the design of blockchain and distributed ledger technologies. The strategic design-led pedagogical process provided a useful and novel mechanism to engage participants, balancing critical thinking and creative approaches that facilitated multidisciplinary collaboration. Lessons were learned about the need to carefully roadmap the design journey and the importance of thoughtful event preparation and facilitation. Despite the challenges of the endeavour, the roundtable confirmed that applying a strategic design approach can overcome the systemic barriers that may prevent successful cooperation and collaboration during multidisciplinary work in academia.

Governance of blockchain technologies has not been historically prioritized beyond technological dimensions, and relatively little literature exists on the prescriptive governance of blockchain platforms. Existing governance frameworks, such as IT governance, may not be suitable or easily applied to the novel context of blockchain; instead, the authors of this chapter argue it may be more appropriate to adopt a grounded approach to the development of governance theory for blockchains. Situating their discussion of blockchain governance within existing, external power structures—legal, political, economic, environmental, and social—the authors outline an internal governance framework for the blockchain system itself. Taking an inclusive, question-led approach, this internal governance framework aims to ensure that areas of risk are identified, and determine how conflict and crisis related to blockchain technology—and blockchain-enabled forms of organization and interactions—can be handled.

Incentives are stimuli that motivate or influence behaviour. This chapter considers how incentives may influence the adoption of emerging technologies such as blockchain, by focusing on the value or relative advantage of the technology, as well as blockchain system design and consensus mechanisms. The impact of incentives is considered in two distinct but connected ecosystems—that of the developer and administrator, and that of the enterprise user—with the conclusion that both aspects of incentives and both ecosystems need to be considered when designing successful and trusted blockchain ecosystems that are adopted by users. Changing behaviour and securing stakeholders’ trust requires incentives and business models that support resource sharing (including information sharing), and those incentives and models need to be adaptable to changes in each ecosystem, given their interrelation.

Although blockchain systems are technical in nature, they are also socio-informational systems. Incentive design in blockchain-based systems is still an understudied research area given its significance, but there are indications that system design must be adaptable and agile, addressing the needs and concerns of different customers and users. Making the system relevant to stakeholders in each ecosystem, and communicating that relevance, can act as a powerful incentive to successfully assimilate blockchain technology.

Blockchain technology has come a long way since its inception in the form of Bitcoin in 2009. With a growing interest from industry and academia came an influx of new application areas and domains that make use of this technology on a daily basis. This technology, while having unique security properties, also presented new security challenges and previously unexplored attack vectors that became the target of malicious actors in the domain.

This chapter presents an overview of security challenges that arise when using, developing, and designing blockchain technology. Firstly, common attack vectors and pitfalls are presented that have to be considered when working with blockchains. Next, weak points in all layers, i.e., technical, data/records, and social layers, are thoroughly discussed and countermeasures with the potential of alleviating some concerns are suggested. Lastly, an outlook on the technology’s future is given and suggestions are provided on how to design usable, secure systems that could withstand the test of time.

Discussions of decentralization with respect to blockchain have tended to focus on the architecture of decentralization, its influence, and potential technical hurdles. Furthermore, decentralization is often conflated with distribution in these discussions. The authors argue, instead, for a relational definition of decentralization that considers blockchain within a data-social-technical framework. By considering conceptual ambiguities and the influence of decentralization on each of the data, technical, and social layers of blockchain, the authors analyze the disruptive power of decentralization. Shifting to a decentralized organization of activity necessarily requires a transition that threatens existing power structures and dynamics, requiring actors to consider how such changes in power might interplay with, and be mitigated by changes in, trust dynamics. These institutional barriers to adoption must be understood as part of the design of the technology to help realize its ultimate societal success. As the process of decentralization evolves, further research will be needed to expose and mitigate associated challenges to data preservation and security, and to consider how societal resistance and related pitfalls might impact and restrict adoption of the democratization process.

Provenance and trust can be seen as closely related concepts. This chapter explores the use of blockchain technology to trace provenance, taking as a framework the “taxonomy of trust” derived from the discipline of archival science. After considering the taxonomy’s three major requirements for trustworthy records—accuracy, reliability, and authenticity—the authors argue that tracing and documenting the provenance of data and records are at the nexus of how blockchains can be used to transform social trust, and that blockchain offers the potential to authenticate digital records. But if the provenance of digital objects is to be authenticated and trusted over time, blockchain systems must be designed with a view to the long-term preservation of the provenance information that such systems convey. The chapter concludes with a review of two “real world” use cases: the tracing of health data provenance using blockchain, and the authentication of assets in the world of banking and finance.