Internet of Value, Social Credit and Rewinding Time

Part 8 of 12 — Blockchain: Decentralization of Money, Power and the State Originally written as a History BA thesis, academic year 2021–2022. Published online August 2026. Series index → · References & bibliography →

Physical desecration

Historians work on primary sources and these, when they are documents belonging to the contemporary state, are desecreted after several decades. State archives open each year to bring to light 'new' documents, and historical research progresses thanks to the strenuous efforts of scholars. Cryptography possesses a curious parallel to the desecreting of documents: this is generated by a paradox that has not yet occurred, and will probably be witnessed in several decades. The data that are sent over the Internet, starting with the username and password that are entered to consult, for example, the email box, are encrypted. This means that only those who hold the decryption key can read the data. Without it, nothing would be readable, but, mind you, everything would be downloadable and savable. When a device is surfing the Internet, for example within the university, those with access to the network infrastructure can see the data being sent and received over the Internet. However, because there is an encryption and decryption process, as long as an HTTPS connection is established and not HTTP (the S stands for 'secure'), anyone trying to intercept them would only read gibberish symbols. The same thing happens with cell phones that connect to the Internet via the data network: providers can see the data, but they cannot read it because it is indecipherable. Yes, they are theoretically indecipherable, since it would be absolutely too expensive to find a key that could decrypt them. However, experts in the field of quantum computing predict that, with a very good chance, in about 2050, we will have quantum computers so powerful that they can solve the cryptographic keys used in the present¹ . This is not an insurmountable problem for blockchain or for cryptography in general, since new, more complex algorithms have been produced, and, with quantum computers, it will be possible to create new cryptographic keys, which will again be secure. That is until new technology, or new mathematical algorithms, emerge that simplify decryption. Clearly, even with blockchains, should they be used widely and completely, the development of a supercomputer capable of breaking today's cryptography would be a serious problem, especially if this new technology were in the hands of just one government or at any rate a few people.

Returning to physical desecration, it is important to know that data belonging to people, even the most secret data right now, if collected and saved, could become readable within a generation when they are-hopefully-still alive. If it is true what Assange said, that "the universe believes in encryption," it is also true that it is never possible to know what will happen in the future. Before the invention of the hot air balloon or the airplane, it was not possible for human beings to fly. This was because of physical reasons; in fact, the human body is not suitable for flight. Although our body has remained the same, and the laws of physics also, it is now possible to fly with the help of technology. Indeed, there may be new scientific/technical breakthroughs that make cryptography unnecessary. It should be clear what analogy there may be between policy-driven desecration, i.e., that which occurs with classified documents in state archives, and desecration due to technological advancement. Both bring to light new sources that can be analyzed to reconstruct the past. About the fact that our personal data, habits, etc., are collected and processed by the web giants now there is no longer any doubt, but it is the people who give it to them more or less voluntarily, frequenting the virtual places that are offered to them in a 'free' manner. As for encrypted communications, which in theory are unreadable even for the most powerful people on the planet, the question remains whether or not they are saved, perhaps selectively, for future use. Various systems of mass surveillance have been shown to exist. Also in Internet is the Enemy is reported as "all Internet traffic passing through the United States is recorded and stored indefinitely."35 We know how in the past the data has not always been explicit, and the use that is made of it can vary over time, in ways and for purposes that are difficult to predict.

Internet of Value

An interesting theory sees in the near future a change, conceptual in nature, that will involve the current Internet. According to this theory there will be a shift from the Internet of Information to the Internet of Value, that is, toward an ordered, collaborative and qualitative Internet. In the Internet of Value there is a technical need to measure the value of information and to write it immutably on a ledger. A banking transaction will evolve into a transaction on blockchain. What will change radically, however, is that even what is not called a 'transaction' in the present may become one. Currently, when your home burglar alarm is turned on or off, when you log onto a website, or when you send an email to a friend, you are not making transactions. With blockchains, every movement can be a 'transaction' and, as such, is susceptible to the assignment of an economic value: a value dictated by the effort in communicating, the energy expended, or the result achieved. This value is written on the log, freely available for consultation but difficult to analyze because of the quantity of transactions. It may be anonymous or pseudo-anonymous, that is, without a call sign, but recognizable by a code. Every action could become a transaction, every page viewed on the Internet, every heartbeat recorded by sensors, every noise recorded by the microphone. One will pay to get the web page, one will pay to get a diagnosis of the heart, one will pay for the analysis of the voice, which will become a command and, later, another transaction. Or one will sell attention in exchange for the content of a page, give up the heartbeat in exchange for a diagnosis, convert our voice into actions. A very large amount of transactions could be accumulated in a day, just as a large amount of data is now being sent and received. The analysis of this data could be done through artificial intelligence systems, which would amalgamate, clean and finally evaluate the trans-actions. An artificial intelligence that adopts the methods of historical materialism, which sees every action or thought as an economic structure, in which in the face of individual utilitarianism, collective good results. Heart rate, as well as eating habits, will flow into huge data pools, where they can be analyzed and associated with healthy or unhealthy lifestyles. The more people move, physically or intellectually, and the more transactions there are, the more data will be collected: in a hypothetical decentralized blockchain this data would be anonymized, preventing anyone in the world from being able to trace it back to who produced it (as long as there are no new inventions). The resulting scientific discoveries would be in the public domain, usable to improve humanity. Quite different is a virtual pool, into which human beings pour their data for the purpose of fueling scientific, social, cultural and human research, from a centralized, private pool, in which data is taken away from users, in which there is very invasive individual profiling, and, to top it off, profits go exclusively to those who obtain this data without users' permission.

Social credit

The authors of contractualist political doctrines, among whom we may recall Hobbes, Rousseau and Locke, envisioned a human entry into society through a contract made between the individual and society: physical differences in strength and talent would thus be softened by an equality established through contract. Each person would have to accept it, sign it, and without it would be a person outside of society, thus unprotected by social rules. In the social contract, although expressed in various forms and in different ways by different authors, the right to kill is given up on the condition that other people do the same thing. Part of freedom is given up in exchange for security: those who do not accept the pact are out of society. In the connected society, which will make use of blockchain, smart contracts, etc., the use of contracts, social contracts, will be the basis of daily life. Without a contract, one will not be part of society. ² The fate seems sealed, either you sign a contract with a private key or there will be no room to live. An interesting thought that could be made, however, is this: who will write the social contract? Can multiple social contracts coexist? If in the old society the acceptance of the contract was implicit at birth, and living together within society was a tacit confirmation of this, it is not certain that things will remain the same in the society of the future. The performance of our activities, and possible activities within society itself (studying, working, etc.) could be subject to the acceptance of the social covenant in written form, and, therefore, compliance with each of its rules. Unlike the contracts theorized by the thinkers mentioned earlier, smart contracts would be used to control what is possible to do from what is not. The social contract could be written and executed in a centralized manner, or allow people to contribute to it in a decentralized manner: we could be ourselves contributing to a contract, or multiple contracts, written collaboratively and cooperatively, to which, upon drafting, a consensus on adoption for regulation of society results. Laws could cease to be the rules of the ruling class the moment a decision is made not to sign an inconvenient contract. But woe betide to be left without a contract, for that would mean nonexistence: other contracts might be more suitable, and, in case there is no suitable one, it is always possible to write one from scratch and found a new society.

With the digitization in all its forms of society, we are witnessing pervasive knowledge of individuals and their behavior, as individuals and as sets of people. The widespread control exercised asymmetrically by the holders of power over the population is not a new thing: a historical example is the renewal of the ecclesiastical structure after the Council of Trent, which established and reorganized the ways in which the Church was to relate to the faithful. The sacrament of confession was certainly a powerful tool of moral control, allowing members of the clergy to know deep down the habits and fears of the people. Today, confession is no longer necessary; everything about habits is already written down, often overseas, and the data is there, and it is being used to influence us.

Information is power and it is through data, which when contextualized acquires the power of information, that people's lives will be regulated. ³ The consequences of such a social system are not predictable, but it may be interesting to take a look at what is happening in China, where experiments are being conducted with the E-CNY⁴ , a centralized, programmable digital currency issued by the People's Bank of Of China (PBOC). Social credit systems that punish those who do not abide by the rules or reward virtuous behavior have already gone into operation in several states. Who gets to decide whether a behavior is reprehensible or virtuous is quite a dilemma.

It is now demonstrated how morality is not an exact science, and that on Christian, Kantian or utilitarian grounds one can from time to time justify or condemn a wide variety of actions. The ruling class strikes again, imposing one morality over another.

For those who disobey, today as in the past, there will be sanctio, programmed and written on a digital contract, which will be activated automatically when certain conditions (or parameters) are met.

Rewinding time

Blockchains remember time and events as well as generations. In a sequence of blocks called A, B and C, if B were changed, C would cease to exist: the logical link connecting B with C would cease to exist and the chain would dissolve. The same thing happens with people: grandfather, father, grandson. The same thing happens with events, which also suffer from the ticking clock, the passing of time.

                                          A->B->C

What is written on the blockchain is immutable and is forever, somewhat like what happened in the past. However, there are cases where with blockchains it is possible to travel back in time, to go back to the desired point to undo some unwanted recent events. This has happened several times in blockchain history, the most famous cases being the Ethereum blockchain case of 2016 (called DAO fork⁵ ) and the Binance (BNB) case⁶ of 2022. Both times it all stemmed from an attempt, successful in both cases, to steal digital coins. These thefts amounted to the equivalent of several million euros at the time, but more importantly they undermined the credibility of the two blockchain ecosystems.

In the case of the DAO fork, after discovering the flaw in the system, there were two options: to accept that the ecosystem had a flaw, to be taken by the nose, and to leave the thief a large amount of money; or to go back in time to a few days earlier. Such a decision cannot be made individually in a decentralized system, so there has to be some sort of consensus on what to do, otherwise we split (fork). What came out of this is a political division. On one side were those who saw going back in time as a very dangerous precedent, since at that point the fact that blockchains were unmodifiable would only be of value as long as there was an agreement on keeping them that way; on the other side were those who argued that, in the face of all that stolen money and various complications, it was better to go back in time, otherwise the whole project would come to a bad end. He won, at the majority level, the second option, which was to go back in time. In actuality, however, a fork was created, on one side Ethereum Classic, the purists, that is, those who did not want to go back in time, and on the other side Ethereum. The development team was in favor of going back in time-that is why the project kept the original name, while the fork had to be called classic.

One interesting thing to note is how the 'stuff' has really doubled. In fact, those who had Ether (the monetization used on Ethereum) before the fork, it is as if they doubled it. Eg. Caius has 10 Ether in his wallet, the blockchain undergoes a fork, Caius finds himself with 10 Ether on the Ethereum blockchain and 10 Ether on Ethereum Classic. Obviously these Ethers, while on paper the same, now belong to two different ecosystems, which have taken different political and philosophical directions and, therefore, also have different economic value. In both cases, the feeling is that there is currently a lack of mature digital tools that can help resolve conflicts between human beings.

It is no secret that some people are very influential within the crypto landscape, and thus a kind of informal hierarchy has formed related to information. In an environment where even those who own cryptocurrencies are often not well versed in the intricacies of these systems, it is easy to rely on those who know more , thus placing trust, and therefore faith, in certain people.

The philosophical implication related to these precedents is quite great. Those who do not want to go back in time have the belief that the code should be law, in English code is law. This phrase sums up the desire to move from a legal system such as the one we know and use, which has its roots in Roman law, to a new kind of law in which everything the code allows is legal and permitted, and what the code does not allow is not only illegal, but just cannot be performed. Following this reasoning, stealing a sum of money, being allowed by the code, turns out to be permitted and lawful. Beyond that, how can we be sure that we are not instrumentalizing a possible turn back in time, just because this choice turns out to be more convenient for some people? Open questions remain, but which see the fork mechanism as a solution to conflicts between parties. It is likely that as this technology progresses, when blockchains become more widespread and mature, incidents of this kind will stop occurring on a regular basis, or, at any rate, procedures will come to be established to resolve similar issues.

It is also possible that all these people, who would like the code as law, will come together under the same blockchain: fork freedom is always possible in the digital world.

← Previous: Centralization, CBDCs, Data and the Four Horsemen · Series index · References · Next: Decentralized Violence, Mass Adoption and Revolution →