Hello everyone.
My name is Nazli, and on behalf of my co-authors,
I’m here to present our paper called “The Blockchain and the commons: Dilemmas in the Design of Local Platforms”.
Now I’d like to start the presentation by explaining how these two concepts,
the blockchain and the commons, come together.
In the recent years, we get to see more and more projects like this:
For example, urban gardens where residents produce food collectively.
Or, independent peer-to-peer economy services such as bike sharing,
Or hackerspaces and Fab Labs.
All these are examples of urban commons which are self-organized social practices that enable communities to manage resources for their collective benefit.
They have minimal or no reliance on the market or the state in these cases.
But as these commons grow increasingly complex, it becomes more difficult to understand each participants’ contributions and consumption of the commons.
And this is a problem because clear rules and boundaries are needed for a commons to function in fair and sustainable ways.
Blockchain technology is considered to have some affordances to overcome this problem.
Blockchain is a distributed database with a growing list of data records that are confirmed by the nodes participating in a network.
These characteristics have initially supported cryptocurrencies, but actually the significance of blockchain goes beyond this.
Blockchain is better understood as a new general purpose technology in the form of a transparent, resilient and efficient public record keeping.
So this makes blockchain applicable to a wide variety of situations where a community wants reliable systems to manage their relationships.
We definitely acknowledge the valuable affordances of blockchain to maintain this ideal, however,
we also think that there is a lack of a critical analysis of the implications of applying blockchain for managing the commons.
We are concerned about the social consequences of an uncritical application of these technologies.
And it is for this reason in this presentation we aim to make the affordances, as well as limitations, of blockchain tangible
for the HCI community in the form of design dilemmas.
In order to categorize these dilemmas, we would like to present three mechanisms of blockchain that we think are crucial for governance.
The first one of these is tracking.
Blockchain-based systems are particularly suited for monitoring the resource use and how participants contribute to a shared initiative.
Second, blockchain-based systems are also well suited to managing the day-to-day upkeep of a shared system.
They enable the delegation of decision-making and evaluating achievements according to the rules encoded in algorithms.
In other words “smart contracts”.
And lastly, the negotiate mechanism is about overriding the encoded rules when necessary.
In order to see these mechanisms at work we would like to present a use case, which is about an urban energy community.
And this community is actually one of our project partners, and it is called “de Ceuvel”.
It is situated at the north of Amsterdam and aims to be a circular community in its energy use.
They achieve this by installing solar panels on the roof tops.
They have a very sophisticated waste disposal system that sends the household waste to a biodigester boat that produces gas.
They have a greenhouse where they produce their own food.
There is a café that functions as a community center.
And there is a community currency at place, called “the Juliette”.
This community wants to create a blockchain-based digital platform to manage their energy-related internal relationships.
We are working with them to realize this aim.
So here is how the blockchain mechanisms could work in this community.
For tracking, each household has a smart meter that monitors the produced and the consumed energy.
And the smart meter data of one’s own and the other house’s are represented to the residents on a local platform.
For managing, the energy is provided to a common-pool.
Smart contracts are used for determining how power can best be distributed, especially during the peak-shaving hours.
Smart contracts are also used for automating the payments, and rewarding commoners with the community currency.
And this currency can then be spent on the opportunities offered by the local businesses,
or on trading assets among residents such as labor, material goods, knowledge, skills, and so on.
And finally, the system offers flexibility on how much autonomy they would like to ascribe to the smart contract algorithms and provides opportunities to change the rules.
So all of these may seem as a coherent story that makes sense on paper.
But the more we aimed to make these work in real life, the more we realized there are many dilemmas that re operative in each mechanism.
A designer would be facing many decisions that may affect the community drastically.
So we summarized these challenging decisions under six dilemmas.
We really have to emphasize that these dilemmas are not so much binary options, but rather ends of continua.
There is really no one “right” answer, but it really depends on the preferences of a community
and also on the types of resources they have.
So we really see these dilemmas like as a canvas for designers to make sure that
they give them enough thought in their application of blockchain technology when managing the commons.
So in the remainder of this presentation, I will go through these dilemmas very briefly.
So I would really like to refer the listener to our paper for an in-depth discussion of each dilemma.
The first dilemma is about the tracking mechanism.
And it is about transparency versus privacy, which is a quite obvious one.
So blockchain infrastructures provides full transparency of data and transactions.
This makes the organizational processes and the associated data visible to everyone.
It also helps to identify who contributes the most to the commons or who uses more resources,
so that the community can choose to reward the contributors and penalize the excessive users.
This visibility also provides an accountability for the governance rules:
Each member can assess if they are actually treated fairly according to their contribution level.
However, all of these scenarios make it relatively easy for individual concerns to become visible to everyone;
and this obviously threatens the privacy of the commoners.
For example, let’s assume that there is a peak demand for energy
and the capacity of the microgrid is not sufficient to handle it.
So the energy distribution algorithm needs to reduce the amount of energy consumed by taking decisions on which households to prioritize.
So, if a member has a date after three years of solitude and he wants to get ready for it,
and if another member is suffering from sleep apnea which requires him to wear CPAP mask when sleeping,
to what extent would they be willing to share this very personal information with the whole community?
So this is an important question to ask.
As the HCI community we really need to understand how well people are able to understand or predict the implications of sharing their data,
and formulate rules for smart contracts about their preferences.
Then we come to the second mechanism, which is about managing.
The first dilemma here is about the value sets operative in a community.
In a market economy, the value of anything is assessed by a supply and demand mechanism and money is the primary commodity acquiring exchange value.
The exchanges within a commons, however, are mostly based on the agreements that the members make with each other.
So, without the traditional system of pricing, how one assess and compare value is an important question to ask.
So for example, let’s assume that a commoner watered the plants in the common areas,
another commoner fixed the solar panel on his neighbour’s roof,
and another has been negotiating with the municipality to get a permission for setting up a dock.
So, who determines which tasks cost what number of community currency tokens?
And maybe an even more important question is to what extent should the community currency be applied to
social or economic services that residents offer to each other?
Then we come to the third dilemma, which is about quantified versus qualified values.
The blockchain as a system favors things that can be quantified.
The tokens represent a generic and measurable unit of value.
So, creating countable representations of contributions within a commons through tokens makes social relations explicit and standardized
where they were before fluid, personal, and implicit.
So using only this kind of accountable transactions can be really de-valuing the forms of contributions
based on altruism or idealism or social responsibilities.
For example, buying groceries for your elderly neighbor normally might be really… give you reputation in your community.
But if it is not counted by this system, it will not be visible in its hierarchies.
This makes other types of activities, however socially relevant they might be, less favorable.
It may result in people conforming their participation to the already existing categories in order to be legible to the system.
So, we must really wonder as the HCI community which role the quantifying plays in the reproduction of social relations
that facilitate the sharing of the commons in the first place.
We come to the fourth dilemma, which is about incentives versus manipulation.
Datafied systems will most likely introduce mechanisms to encourage users to temporarily use
or refrain a resource from using it in order to optimize the system in realtime.
Again, in our energy community, incentives may be given out by lowering the price of energy during off-peak hours.
Or, the commoner who decreased his energy consumption during the peak hours may receive a “master energy saver” badge in his online profile,
or be recognized as such on a public screen in the community.
Or some competitions might be run
and the winners may get priority when reserving a vehicle in a car sharing system, or getting the first harvest from the greenhouse, etc.
There is almost no limit to encoding various incentives around collectively defined values into the system.
So we can reward commoners either symbolically, economically, or with particular privileges.
However, there may be a downside to this.
Earning badges or achievement may become a duty at a certain point.
People can be coerced by these systems into particular behavior.
Furthermore, rewards may also cause the efforts to shift towards the things that will be the most highly rewarded.
There is a real need to further understand this affordance of rewards.
Then we come to the fifth dilemma, which is still about the managing mechanism.
A commons generally involves a group of people working together to achieve some shared objective.
A frequent problem that can hinder collective action stems from the fact that group members may also have individual interests,
which may be in conflict with the group’s shared objective.
So, if we go back to our energy community,
And let’s assume that an unexpected heat wave has arrived.
Some commoners would like to turn their air conditioner on, but at the same time, the alpacas need to be shaven at the local petting zoo.
As the petting zoo was the a collective goal, could the algorithms force the power to go out in that household?
Or would this situation actually lead to a paternalistic system that limits the individual liberties?
This is quite an important and interesting question to ask.
So we really need to understand when and how to trade away personal gains for the greater good of community, and we need to explore this further.
And this last example brings us to the last mechanism of negotiation.
If indeed the collective interest trumps private ones, how could one argue for a temporary exception?
let’s assume that the community set a collective goal of making a monthly energy donation to a local petting zoo.
So, let’s say that household with the air conditioner on had an elderly person visiting who suffers severely from the heat wave?
So, this negotiation mechanism is about creating room for such exceptions.
And then there is still a dilemma existing there.
In smart contracts, code is written in advance of real situations happening,
and therefore, can only regulate what can be expected.
Then how do we define exceptions?
The visit of a fragile elderly family member during a heat wave may not have been foreseen by the designers.
So how can commoners rewrite the rules, rewards or their privileges?
Smart contracts can also be designed to be interrupted for human voting on set times or in specific cases,
which is called “off-chain governance”.
But again, there are limits to this shift of agency to humans.
So how many of these emergency calls would you like to handle on an everyday basis?
This situation is also problematic from the perspective of the commoners who ask for an exception.
It requires a disclosure of the reason for exclusion, which may violate their right of privacy.
So, these are the six dilemmas we identified for using blockchain for the governance of the commons.
But we are really need to emphasize: These are not a conclusion of our investigation by any means, but rather a starting point.
So we want to contribute our dilemmas with the objective of supporting further critical analyses,
and we invite more attention from the HCI community to this emerging application domain.
Thank you very much.