Shaping a DCent.Society: Assessing Societal Implications of Bitcoin, Blockchains & Smart Contracts

Abstract

The course investigates the long-term implications of decentralizing our societies through distributed ledger tech. Students critically reflect economic, political, ecological, and ethical implications of the Bitcoin cryptocurrency and the Ethereum smart contract platform including decentralized finance seen from economics, political science, psychology, sociology, and philosophy.

Objective

Explain the paradigm shift from Web 2.0 to Web 3.0 Describe the design and emergent properties of decentralized systems Hypothesize about the economic, political, ecological, and ethical implications of Bitcoin, Ethereum, and decentralized finance Integrate ethical and governance considerations into the design of cryptoeconomic systems Justify own position about societal implications of the decentralization of society

Content

What if ... what if Bitcoin, Ethereum, and related distributed ledger technology will be wildly successful and flourish long-term? Which parts of our economies and societies would they affect? Could we indeed redesign our societies towards more sustainable action, more democratic governance, and more equitable finance by envisioning new ways of organizing, coordinating, and acting collectively? Or is this all make-belief because, after all, the Internet also under-delivered in important aspects of its huge promises? How can we critically reflect on the long-term implications of decentralizing technologies on our societies? Bitcoin is dividing the world. Due to its erratic price movements, some view Bitcoin as a useless Ponzi scheme at best and a complex, state-interfering “thing” at worst. Others, however herald it as the most important invention since the Internet or the printing press. In any case, the questions raised by Bitcoin are not only of academic interest: What is money? Is today’s fiat money system fair? Should people or the state create money? Is global anonymous transfer of digital value a good thing or not? Will Bitcoin supercharge renewable energy or do we need to switch it off to save the planet? Could it even bring peace by preventing states from financing wars or is this a preposterous claim? Ethereum, blockchain technology, smart contracts, and decentralized applications (dApps) seem to be less contentious and have caught the interest of companies and government for their specific technical characteristics. However, where is the evidence that decentralized technology is beneficial inside a hierarchical, “trusted” setting? Will unstoppable dApps empower us or create rigid machines steering our behavior? What to make of this extremely polarized debate and how to come to reasonable own conclusions when imagining the decentralization of society? The course aims to connect the cultural and historical preconditions to the long-term societal implications of Bitcoin, Ethereum, blockchains, smart contracts, and dApps. We will research and critically reflect economic, political, ecological and ethical consequences with the aim to formulate our own informed opinions about what is currently happening and what might happen in the future. To achieve this multi-disciplinary goal, we establish a common understanding of the technologies and inner workings of Bitcoin, Ethereum & Co. in the first part. We discuss selected aspects such as open source software, cryptography, cryptoeconomics, incentives, and complex systems. Why and how is Bitcoin a “trustless” system – or is it not? Why is an absolute scarce digital asset a big deal – or is it not? Why and how is Ethereum a “world computer” – or is it not? Why is an unstoppable system of dApps and decentralized autonomous organizations (DAOs) a big deal – or is it not? For a full picture, we will also examine other developments such as Decentralized Finance (DeFi), stablecoins, and Central Bank Digital Currencies (CBDC). This introduction will provide the technical background to move to the main part of the course, in which we go into depth on the potential societal implications of Bitcoin, Ethereum & Co. We will be covering various domains such as sound and fair money & its value, free trade & prosperity, incentive design & social behavior, sustainability & energy production, individual sovereignty & state control, democracy & geopolitics. We will thus be exploring connections between information technology and economics, political science, psychology, sociology, and philosophy. Throughout the course, students are regularly invited to debate in ad-hoc interventions. They will work in teams to build their own critical analysis and arguments about a specific issue chosen from the course material. They will summarize their conclusions in a brief report and defend them in class in the final part of the course.

Resources