Why Jeremy Corbyn Could Do With an Education in Blockchain

in Editor's Picks/Politics by

“Truth can stand by itself,” Thomas Jefferson once said. We suspect Jeremy Corbyn disagrees.

With a free market press in the UK monopolised by billionaire tax exiles, much of the British media has undertaken what even many of his opponents admit to be an unbridled orgy of unfounded smear against the most uncompromisingly left-wing leader the Labour Party has likely ever known.

Painted as a rabid anti-semite and ex-Communist spy, amongst other things, Corbyn – clearly exasperated – has decided to put forward a series of proposals to reform the media, most notably one which would see the BBC’s board of directors appointed by a combination of its own staff and the general public as opposed to appointment by government under the current arrangement.

His proposals have – predictably – provoked cries of outrage from many of the same publications that were responsible for pushing Corbyn into the move in the first place. But whatever else we might conclude from the affair, one thing is clear – the Labour Party simply isn’t au fait with the potential of Blockchain technology to help address their concerns.

Game Theory, Anonymity and Wisdom of the Crowds

Whilst the blockchain might not be able to resolve the oldest philosophical question of them all – What is Truth? – it can, nonetheless, be configured to offer up a pretty decent alternative: a mechanism for eliminating dishonesty.

To understand why, it might help to have a look at Augur – a new betting platform which we discussed in a previous post, albeit in a slightly different context.

Augur is entirely decentralised – meaning no-one is in control. Its smart contracts gather in the stakes for a given bet and re-distribute the winnings upon the reported outcome of the bet.

The platform’s major challenge was to find a mechanism which ensured that the reported outcome of a bet corresponds with reality as opposed to vested interests which want the outcome to align with their own stake in the bet.

In other words, the creators of Augur needed to find a way for betting outcomes to be reported truthfully – not an easy task if no-one is in charge. But since no-one can really define – in any kind of definitive sense – what truth is, they went for the next best thing.

Using a combination of simple game theory, anonymity, reputation scores and Wisdom of the Crowds – all of which is underpinned by the security, transparency and trust provided by blockchain technology – they realised they could build a solution which aims to eliminate dishonest behaviour. So how did they achieve this exactly?

Since no-one can really define – in any kind of definitive sense – what truth is, they went for the next best thing

Conditions

The solution makes a number of assumptions and requires a number of conditions to be met, including the following:

  1. If each individual act of dishonesty carries a cost, the masses as a collective will not lie. Conversely, if an individual behaves honestly and is rewarded for doing so, once again the law of large numbers will – under most circumstances – ensure that honest behaviour will be the outcome.
  2. Any platform which relies on the reporting of outcomes, and which requires those outcomes to be reported in a manner that aligns with the truth, will need to ensure that there is no mechanism which allows any one individual to know the identities of all other individuals.
  3. Large groups of people are collectively smarter than even individual experts (Wisdom of the Crowds).

To ensure the first item on that list, the Augur platform makes use of Oracles and some simple game theory. Oracles are anonymous participants who step forward to report their observation on the outcome of an event (e.g. Who won the 2018 World Cup?).

Anyone who submits their observation will also need to commit some asset of value in doing so. They will lose that asset if their observation does not coincide with that of the majority of other Oracles, but they will enjoy a share in the stakes – in proportion to the size of their own staked assets – taken from losing bettors when their observation aligns with the majority.

To ensure the second requirement, Augur’s users – both bettors and Oracles – remain anonymous. Enterprise-grade cryptographic methods ensure that users cannot be traced, nor their betting history examined.

For the last item on the list, the number of individuals who act as Oracles on any given bet is also masked. However, should any given market be dominated by bad faith actors, the reported outcome can then be challenged  by anyone who disagrees with the reported consensus.

The stakes are raised in a new round for re-evaluating the same outcome. The idea is that other Oracles will rally to the recall – and will submit stakes to ensure that any dishonest manipulation is reversed in order to restore confidence in the outcomes reported by the platform. Confidence is what underpins, after all, the platform’s inherent value.

Wider application

The Augur solution has since been adopted by other blockchain start-ups. Naturally, there are other betting platforms such as meVu who have essentially decided to imitate the model, but there are also blockchain start-ups operating in industries as diverse as dispute resolution and scientific publishing who are now adopting the same model.

And if the Labour Party in Britain – or anyone else for that matter – wants to examine real and uncontroversial solutions for tackling media dishonesty, they could do no worse than explore the possibilities offered up by blockchain technology.

In practice, however, it will likely be a decentralised platform offered by start-up media ventures such as DNN and Media Protocol who will provide a robust answer to the emerging theme of fake news (which, as it happens, is as old as news itself).

On the other hand, we appear to be living in an era now where there is a critical mass of people who simply prefer to see something as true because they want it to be true. And there is, as far as we are aware, no blockchain solution as of yet for self-entitlement.