Tag Archives: blockchain

Blockchain and Elections

Recently Donald Trump stated he lost the popular vote in the USA 2016 presidential elections due to the enormous scale of fraud with unregistered voters and multiple registered voters. He proposed improvements that would make the voting process more reliable. By introducing a voter identification (a means to prove that the person is rightfully eligible to vote) and additional measures the process of the allowance of voters should become more trustworthy.

In the 2018 local municipal elections in Amsterdam, one of the  participating political parties, Forum Voor Democratie, raised  questions about the accuracy in which the citizens votes were counted. As they went to inspect a site where the voting of counts was in progress, they were shocked by what they witnessed.

These stories of voter/ voting irregularities and fraud regularly appear in the media. As the examples above illustrate, they are not limited to countries with a questionable reputation in respect to the democratic and election process. A potential improvement could be introducing a blockchain ledger as part of the election process. A blockchain public ledger should contribute to a more fair, transparant way of voting and casting electronic ballots and this would strengthen the democratic process. There is no centralised authority responsible for determining what is true or what is false because multiple distributed parties come to consensus. The result of this consensus (in our case verified and approved votes)  is added to the ledger and is immutable (there is no way of modifying the data once it has been recorded).

In this article I will go shortly how such a voter/voting blockchain ecosystem would look like, without going too deep into the technical details.

The working of the blockchain ledger

The transactions (digital representations of cast ballots from voters) are being recorded on a blockchain ledger. The advantage of such a ledger is that the information of the recorded data is transparant (for everyone to be viewed) yet the votes are securely recorded, non-editable, verified and anonymous (not retraceable to the identity of the voter).

As described earlier the differenties parties come to consensus about the votes and therefor need intensive -decentralised- computer processing power enabling the election process. They should be financially rewarded as an incentive to supply the necessary processing power.

With many cryptocurrencies like Bitcoin and Ethereum these financial rewards come from a process called mining. The situation with an election is rather different than with a system based on payment transfers or smart contracts. Elections only happen once in a while but when they run they cause heavy network load and therefor need intensive computer processing power. The costs associated with network traffic and computer processing power are the digital variant of the organising costs of conventional elections with paper cast ballots.

Because of the special character of elections a mining construction as used by crypto currencies does seem  less useful and not applicable: the ledger will be hit with sudden, incidental ‘spikes’ in time because  the voting process takes time in a limited amount of time (typically a 12-24 hour time frame) and has irregular -long- intervals, depending on a nation’s constitution regarding when the elections take place. Another question who would be the most appropriate party to deliver the blockchain infrastructure. If the government does it is another step to centralisation (we will go deeper into this later). Other (commercial) parties look like a better alternative as they are much more capable of delivering the needed services in a timely and secure manner.

Voters

The voter population varies over time. New voters are added because of citizens that gain legal voting rights (because of age, residence permit after immigration). On the other hand voters die or lose their legal rights to vote (emigration, imprisonment). The only institution that can determine the correct voter base is a -national or local- government. So like conventional voting there has to be a process in place that a/ attends the rightful voters for an upcoming election, b/ gives instructions on the election process and c/ informs the voter about access to the electronic election system in order to use their electronic cast ballot. A/ and b/ will depend on the ways the government communicates with its citizens and are outside the scope of this article. I will concentrate here on c/, the access to the election system.

In the Netherlands the DigiD system acts as the government’s identity management system. It is my estimate that by now every developed nation has a similar identity system. I see no way that an independent source, related to the blockchain ledger will be capable of delivering something comparable. Therefor DigiD could operate as a gateway to the electronic election environment (just like it functions now as a gateway to the Tax and Custom Administration or healthcare institutions). So this is gateway needs to be there in any situation, whether there is a blockchain in place or whether the data is being recorded in a centralised database system.

As described earlier the voters should have access to cast their vote for a limited period of time for a certain election. This is rather critical from a point of processing power. Even within this limited period there will be spikes noticeable within this limited period. Most voters for example will enter the system and cat their vote before or after working hours.

Election, voting and votes

For example we have election X. There is a blockchain ledger in place. The government has provided its citizens the rightful communication about the election X’s rules. Through its identity management system it will grant access to the rightful, granted voters. An election can come into a variety of forms: it could be a simple referendum style, where the voter only has to choose between ‘yes’ or ‘no’ or ‘A’ and ‘B’, it could be a more complex form where one or more candidates has to be chosen from a list or even a combination of referendum and candidate choosing. There will be the need for an application with data and interface specifically designed to support an election event.

As these prerequisites are in place the election X can start. Within the given timeframe the voter logs in to the application and casts his vote/ votes for the election X. This vote takes the technical shape of a transaction where the choice or choices are being recorded to the public ledger taking into account the security and privacy of the voter.

When using a blockchain with a public ledger another effect occurs. Because the transaction information is online and real time available, the need for exit polls is no longer there. The benefit is that when reaching the time limit of the election (the possibility to vote has come to a close), the result of the election is immediately available. However this also means that voters might be influenced by preliminary ranking and adjust their votes accordingly as the information of the voter data is available in real time. This is very different from conventional voting where only a rough indication is available during the election time interval through exit polls.

A blockchain based election can be organised, yet it will difficult to directly abolish the conventional, paper ballot casts directly. There will have to a transition period to let the voters get used to the new system. This transition means however that another issue will arise: how to avoid double voting (one vote electronically, one vote the conventional way). There are different methods to deal with such scenarios but it is something that has to be taken into account.  

Conclusions

Elections using a voting system on the blockchain does little about Trump’s problem. If the government does not have its administration in order than the voter base will remain unreliable. Within the reality of a nation state the government is the only institution able to provide a correct voter data administration. A special ID does more look like introducing a symptom than take away the root cause, but a deeper discussion is outside the scope of this article

A general challenge as we look into the possibilities using a blockchain for elections: a blockchain fares best when there is the smallest need for centralisation or a central institution, the so called principle of MVC (Minimal Viable Centralisation). Decentralisation  is difficult to realise within the setting of a government based election system: the government manages the identities, manages the election procedures and the consequences of the results of elections. So there is little room for decentralisation.

The blockchain itself could be set up and maintained by the government, but that would be another stepping stone towards centralisation. The specific characteristics of using the blockchain (long intervals, but with intensive spikes) would make it more attractive to host such a blockchain with a commercial organisation that can spread the use of the blockchain more efficiently and economically (compare it to commercial parties who deliver cloud based solutions).

An electronic voting system in general (with or without a blockchain) obviously has tremendous benefits over conventional ballot casts. The need for manual counting ballots disappears, although other concerns about security and hacking will become manifest (in which the blockchain could play a favourable role compared to centralised database solutions). The organisation of elections will become so much easier. New forms of elections and voting come into reach and could be the start of a democratic reform process. The old paradigm of representatives of the people deciding for the citizens would become superfluous to a certain extend. The opinion of the citizens could be monitored interactively and immediately.

It looks almost certain that disruptive changes in the election process will be imminent. At least  these changes will allow the voters to vote electronically. The election process however will largely remain centralised because of the enormous influence of the government in almost every part of the process. The use of a blockchain is therefor less obvious within an electronic election system. Yet the strength of using a blockchain would be the accuracy, security and reliability of the registration of votes versus a centralised solution. The manual counting of votes (with all its perks and potential mistakes) disappears, yet the immediate precise publishing and availability of voting results on a blockchain might lead to side effects that were not present in a conventional system, like the immediate availability of voting results.

The_Rise_and_Rise_of_Bitcoin

Review ‘The rise and rise of Bitcoin’

The rise and rise of Bitcoin (TRARB) follows the path from the invention of Bitcoin and its the rise in the early years (until 2014) through the eyes of documentary maker Nicholas Mross. His brother Dan Mross is a Bitcoin enthousiast and computer scientist. He is the main person in the documentary, interviewing important names in the Bitcoin world and participating in events like Bitcoin conventions. The double ‘Rise’ title can be explained due to the volatile nature of Bitcoin, where more than once Bitcoin seemed to go definitely down, only to re-emerge with a higher price and bigger importance.

In 2012 Dan understands that the developments around Bitcoin could become important enough to start documenting them. Dan is followed through his personal involvement: mining Bitcoins. Mining is the process of earning a Bitcoin reward by offering computer processing power enabling the Bitcoin transactions. By the end of the documentary it is becoming clear that the days for mining are over for the ‘hobbyist geeks’. The market has become highly competitive and Dan decides to stop mining and sell his mining rig.

Throughout the actual developments and interviews the documentary is very useful to watch for people who are new to Bitcoin because with clear visuals its roots and the technology behind Bitcoin are being explained. A counter in the lower side of the screen reminds the viewer of the US dollar price of the Bitcoin of that moment in time during the documentary. Usually it fluctuates in the range of $1 to $250. It is not until the latest shots of the documentary that it passes the $ 1.000 landmark.

Bitcoin was invented as an alternative to the banking system and especially its 2008 collapse when worldwide banks needed to be bailed out at the expense of the taxpayer. The idea behind Bitcoin was that it couldn’t be manipulated by a central authority. Only a fixed amount of coins are issued, following a fixed set of rule.This is structurally different from how the fiat system works, where printing takes place in accordance to policies from a central bank. Satoshi Nakamoto was the mysterious person behind the Bitcoin principles and until now his identity is unknown. His 2008 white paper was a brilliant vision on bringing together technologies (like cryptography, peer-to-peer networking and proof of work) that would lead to the design and implementation to the world’s first cryptocurrency.

The Cyprus crisis in 2013, where consumers were cut off from their bank deposits gave Bitcoin for the first time an excellent use case: if the consumers had deposited their money in Bitcoin then it would have stayed out of reach from authorities, instead of being deprived from their deposits. Also in later cases (Zimbabwe, Venezuela) and in countries where there is no tradition of private banking, Bitcoin would prove to be an excellent reason for consumers to turn to Bitcoin.

An interview with Gavin Andresen is one of the interesting pieces in this documentary. Andresen kept a close (business) relationship with Nakamoto. Nakamoto gradually disappeared from the Bitcoin community around 2010-2011. In one of his last postings he regrets that his invention is now being used by the likes of Wikileaks to accept anonymous contributions. Andresen would be become the most influential developer until 2016 (when Andresen himself stepped down).

One aspect about Bitcoin would be a constant factor through the years: the very tense relationship with authorities. Mt. Gox, originally a trading card platform before it was transformed to become the world’s largest exchange would be subpoenaed by American authorities. A hack of the exchange in early 2014 send Mt. Gox into insolvency prematurely. The Mt. Gox episode is a very crucial element in early Bitcoin history and the documentary is probably the only filmed material from inside the company. The ‘dark web’ website ‘Silk Road’ would be very early on the radar of authorities. Silk Road made it possible to buy  drugs and medicines online. Payment could be settled only by transferring Bitcoin. In 2014 the website was dismantled by authorities and leading engineer Ross Ulbricht was arrested and send to jail.

Charlie Shrem (CEO of BitInstant) can be seen explaining his fear of going to jail or becoming a martyr. His company needs to spend large sums on lawyers to stay legally compliant. Besides these legal trouble it becomes clear that due to the popularity of Bitcoin his company has increasingly difficulties in handling the client transactions in a properly manner. Ultimately Shrem would also be arrested in 2014 and sent to jail on charges of money laundering.

Consumers would have their own struggles to keep their investment safe because of the many attempts of hacking exchanges, the worst example being the already mentioned Mt. Gox exchange. Throughout the documentary it becomes clear that after the wild first years the Bitcoin was becoming a more professional, streamlined industry. Many companies from the early years would be forced to stop (BitInstant, Tradehill) and be replaced by companies backed by large investment parties (like BitPay and Coinbase).

After the documentary was released there would be another development in the Bitcoin industry: the rise of alternative coins and hard forks from Bitcoin (like Litecoin and Bitcoin Cash). Vitalik Buterin appears as the lead writer for the Bitcoin Magazine. He would later become the founder of Ethereum, the largest competitor of Bitcoin. Roger Ver is portrayed in the documentary trying to convert Japanese retailers to use Bitcoin for client payments. Ver would become the man behind the Bitcoin Cash hard fork.

TRARB is a must see documentary for anyone who is interested in the short and turbulent history of Bitcoin and wants to know more of its origins. It will give a good insight to the big names in crypto. Throughout the documentary I felt an often returning feeling how fast all developments have gone in just a few years. This documentary will remain an important document on how a technological development revolutionised the financial-economic world. Maybe in 10 years we will look back at it as a fad that faded in oblivion or as a starting point of a technological development like the rise of internet in the mid 90’s.

Nootdorp, March 2018